We started out married life during the Ford recession.

[ginnyinWI]

Here are some practical tips that have helped us through the years:

1. Don't go into debt for anything other than a house.
2. If you must buy a car with a loan, put as much down as you can and pay off as soon as you can. It depreciates, so you are paying for something that will eventually be worth $0.00.
3. Don't buy new cars. The best value is a car that is three years old. And sell it before it gets too old and starts costing a lot to repair--say when it is about ten years old.
4. Live below your means. Buy less house than you can afford or rent an apartment less than you can afford and save the rest. Buy an old house and fix it up and live in it and hopefully sell it for more than you paid for it.
5. Learn to do it yourself when you can--don't automatically hire things done.
6. Keep a vegetable garden if you can. Freeze or can things for the winter.
7. Shop rummage sales, especially for kids' things. They outgrow clothes and toys so fast.
8. Buy food in bulk when you can. A small chest freezer will pay for itself if you can use it for bargains on bread and other things. And use it for those extra garden vegetables too.
9. Use a credit card, but always be able to pay it off at the end of the month. Be what the credit card companies consider deadbeats--people who never pay any interest for the use of their credit cards. There's nothing the credit card companies can do about it. When you buy on credit and pay interest on the item, you are paying so much more for the item.
10. Contribute to a 401K retirement fund. You'll be glad you did.
11. Turn off lights, turn off the water heater when you go on vacation, save and recycle stuff, keep the heat turned down at night. It all adds up to less energy use and lower bills. As Jimmy Carter used to say, "put on a sweater!"
12. Don't think of it as cheap; think of it as frugal. Think of it as saving where it is smart so you will have it for what matters the most.

After 37 years, we are living in our fourth house. Every time we sold a house and bought a new one, we put more equity down, until with the last one we needed so little that we had to get a credit union loan rather than a mortgage. It was paid off in two years and we own our house outright now.
With the kids grown we are able to save more and more for retirement. It is largely in stocks, unfortunately, which are down now, but we have some years left and it will probably go up in value by the time we need to sell them. We've had the extra money to do some traveling and do some extra things for the house with some of that, too.

I'd say the most important thing we learned early on was that first point: avoid debt on anything that won't go up in value. And since we weren't supporting the wealth of any bank, we had more money for real things.

[GoesTo11]

1. What's the point?

I did most of what you suggest, had extra money to save, put it in a 401k, and have lost more than I ever put in. Why bother?

[Dappleganger]

2. You're right, some of those old strategies need to change.

Even Stewart brought up his mother who had saved for the future but was nailed financially. All of us need to remember that some of those old tried and true methods need to be re-tooled for these economic times.

Two things stand out--the old 401k plans need to be reassessed. Many employers are halting contributions and you don't have as many choices in regards to investing. ROTH's are probably a better method of saving for the future because of the degree of choices you can make.

As for housing, we need to stop viewing our homes as a CASH COW. Real Estate doesn't appreciate like it used to do, and your home is a PLACE TO LIVE. There are many circumstances now that it makes more sense financially to rent than it is to own. We need to stop tying up our personal wealth in our homes. Buying fixer-uppers is good advice unless you don't have money to fix it up. Always get something which is livable over the long-term. It also makes sense to not buy anything which can't sustain itself as a rental (keep payments low).

[Warpy]

3. You're basing a lifetime on one six month period?

Contributing to a 401K makes a great deal of sense, especially for younger workers who have the potential to build up a sizable chunk of America by the time they get turned out to pasture. Investment should be done with an eye toward income producing stocks, not the next "sure thing" that will hyperinflate and yield fast money from paper value, alone. Paper value goes up and down and unless you're planning to use it to leverage debt, it's largely meaningless.

If you're working for a company that matches your contribution, TAKE IT. It makes sense in the long term, even if you think you're getting screwed in the short term.

Face it, the old pension system is gone. Pension funds invested in the same funny paper that is causing banks to skate near the edge of insolvency and they're just not going to be there. Their health relies on the stock market, too.

[GoesTo11]

4. That one six month period wiped out a lifetime of growth

Negative returns over basically the last 2 decades. If this was just due to the random ups and downs of a market with an upward trend, I'd agree with you, but I now think it was a rigged system meant to trick people into giving their money to CEOs and hedge funds to take home as bonuses. Fine, take the company match and put it all in money market, but the tax advantage is meaningless if you don't have any growth. Better to move somewhere that makes you happy, pay off the house as fast as possible, invest in yourself and be very, very skeptical about sinking your hard-saved money into rigged games.

[dkofos]

5. Good advice all.

If only half the country followed these rules for the past 30 years
we would not be where we are now.
As for the 401k, people need to keep a closer eye on their
investments and the markets and be ready to move the money
when the need arises.

I would also add a #13, use a small local bank or preferably a Credit Union whenever possible.

[dmr]

6. #13 is on target

My son goofed and bounced a check recently. The bank gave him a call one morning and said if he could come into the bank and make a deposit before the end of the next day they wouldn't charge him the $6.00 non-sufficient funds fee.

I called the bank back and asked if I could cover the deposit via the phone from my account. Because they know their customers (or most of them, I suppose), the bank manager did just that! No having to travel to the bank in a blinding lake effect snowstorm (another 12" that day!).

THAT's what I call old-fashion banking!

They could have easily charged my son a fee.
They could have easily charge an outrageous fee in lieu of a measly $6.00.
They could have easily put a negative mark on my son's banking history.
They could have easily refused my phone transfer to his account.
They could have easily told us both to pound sand.

When I thanked the bank manager she told me that everybody makes mistakes. They strive to be a family bank, and that family's take care of their own!

[truedelphi]

8. A six dollar NSF fee? Where in the world doyou live?

Maybe Oregon?

California has no financial institutions I know of that charge less than $ 22 a pop. And many banks here charge in the mid-thirties.

[GoesTo11]

7. Keep a closer eye on our investments?

How, pray tell, are we supposed to know that the market is about to drop in half? Anyone who could truly see that coming could have made an absolute fortune shorting the market. If the only way to avoid disaster with your 401k is to be smarter than the market professionals, we shouldn't be playing the game at all. Although a few people moved their money out of 401k stock investments, 401k investors generally kept their money in and took a large share of the losses. And if they had all "kept a closer eye" on their investments and moved out, they would have just dropped that much sooner, and the first out would still be ok and the last out would still be screwed.

By the way, unemployed should have looked harder for work or worked harder in the first place so they wouldn't lose their jobs.