Wednesday, December 17, 2008

You don't have to participate in recession

Five years ago I listened to Dave Ramsey for the first time, and since then I have at least made a gallant effort to participate in the Dave Ramsey get out of debt program. Of course my wife and I have always been frugal, so we didn't have to make too many cut backs.

Now we are in a recession, and you see all these people who have been living above their means in a tizzy because they all of a sudden are "forced" to make cut-backs in their style of living. You see a perfect example of this in the way so many people were living above their means and bought houses they could not possibly afford.

Nothing like that would ever happen to me, even if I did lose my job. My wife and I have a plan and money in savings just in case, and we do not in any way live above our means.

We do not live paycheck to paycheck. We do not buy things that we want unless we can pay for them with cash. We are still in debt, and with a new baby and seasonal stress factors we have decided it will be several years before we are ever out of debt.

However, when the recession hit, we simply "do not participate," as Dave Ramsey says often on his program. "Do not participate."

Now someone is going to email me and say, "Well, what if someone loses his job?"

Then you live off the emergency fund you created when the economy was good until you get a new job. The emergency fund was created by you instead of purchasing that boat you wanted but didn't need. The emergency fund was created because you didn't buy that big screen TV you wanted but didn't need.

The problem with America is way too many people live above their means. And it's those people who will hurt the most during a recession. It's those people who will be forced to make changes in the way they live.

Not us Dave Ramsey or Susie Orman followers. Not us frugal Americans who live the way our grandparents did and live a parsimonious love while living rich in love as opposed to a material world.

That, my friends, is the thought of the day.

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