With home equity evaporating like dry ice on a hot day, many Americans no longer can rely on their homes as a source of quick cash. Likewise, credit card issuers are lowering credit limits for many consumers, imposing constraints on spending.
Americans are realizing that the spending party is over and it's time to build wealth the old-fashioned way -- by saving money.
Some obstacles stand in the way. For instance, real median household income grew a sloth-like 1.3 percent between 2006 and 2007, to $50,223, according to the U.S. Census Bureau. And it's not likely to accelerate much in 2008.
For the average budget-challenged family, the escalating cost of living can be discouraging. But saving money involves a clever combination of cutting expenses and allocating any savings into a bank or investment account before the money disappears.
The goal is doable with stalwart financial discipline.
1. The budget workout: Know where money goes. If you're serious about reining in spending, you'll need to implement a budget. Only 39 percent of Americans say they use a budget to track household spending, according to a survey by the National Foundation for Credit Counseling.
Most consumers find it tough to save money because few families actually know the exact amount of money that's being allocated to a particular expense, says Gary Foreman, publisher of Stretcher.com.
