The Importance of Thrift

It's hard to listen to the news these days and not feel a certain sense of panic. Housing prices are falling. People are losing jobs. Banks fail everyday. I can't even bring myself to look at my retirement accounts. Billion dollar bailouts don't seem to make a dent in the financial bloodshed.

The economic situation is complex, and I don't understand all the pieces of it. What I do know is that over the past few decades Americans have gone from savers to spenders. My parents were born in the Great Depression and grew up during World War II. My mom still has the ration books to prove it, and my dad can tell you about collecting tin cans for the effort. Neither of their parents did anything on credit. It just wasn't an option, and it looks like we're heading back to those days.

There are certainly cons to having to pay cash, but there are pros too. That's why it was refreshing to log into my ING Direct account last week and be greeted with a manifesto for savers. You can find in online, but I also thought I'd share it here:

1. We will spend less than we earn. Saving a little out of every dollar we bring home is the foundation of independence. Without it, we can't build equity in our home, we can't invest for the future, and we can't be ready for challenging times. We promise to pay ourselves first, always.
2. We will use our home as a savings account. Besides shelter and comfort for our family, the role of a house in our financial life is to build equity. We will have a healthy down payment when we buy. We'll choose the mortgage that lets us pay down the principal fastest. And then we'll leave that equity safe where it is instead of spending it on things that don't last.
3. We will take care of our money. It's not enough to have money in a bank. We will put it where it will grow. We'll keep track of it. And we'll check every account we have every year to protect ourselves against fraud or escheatment.
4. We will defend our credit worthiness. Good credit is going to be precious in the years to come. We will pay our bills on time. We'll borrow only when we need to and in amounts we can comfortably pay back. And then we'll do just that.
5. We will ignore unsolicited credit card marketing. We decide when we need a credit card, not some marketer. And mostly, we probably don't need another one at all. We won't even open those solicitations. We'll shred them.
6. We will know the cost of borrowing. The interest lenders charge us is real money, too. When we buy a mortgage or finance a purchase, we'll figure out what that interest is really going to cost in dollars, add it to the purchase price, and ask ourselves if it's still worth it.
7. We will invest for the long term. Futures are built out of patience and prudence, not luck. We will not put off being a saver because we think there's a lottery win in our future, in Vegas or on Wall Street.
8. We will take care of the things we have. We work hard for our money, and it's disrespectful to waste it - or the planet - by treating our possessions as disposable.
9. We will remember what matters. We are not the things we own. If we have to spend and spend on bigger, more impressive things to keep up with our friends, then they are not our friends at all.
10. We will be heard. Our representatives in government and the corporations we deal with need to know that we are paying attention. If we're silent, we're accepting the status quo, and the business practices that got our country into this situation will continue. We are not going to accept that.

It's a welcome change from having credit card applications pushed down my throat. I have no idea what the future will bring, but this fall I'm enjoying the last tomatoes of summer and enjoying the little things. I have a feeling it's going to be a long winter.