Your Money and the Government...

Along with my wife, I teach a money class ay my church. We (hopefully) help people grasp some basic principles:

• Spend less than you make.
• Have cash on hand for emergencies.
• Save and invest for the future.

Simple principles. Really simple. But not always easy to do.

My frustration with our government (both the federal government and the government of the great state of California) is that somehow they do not understand these simple principles.

If you have a "budget crisis" in your home or in the government you have two options: spend less or make more. Why do our legislators always choose the option to make more (by taxing us) but not spending less?

Government prints more money to bail out companies who have proven that they are not worth saving based on their gross mismanagement on their business, thus weakening the value of the dollar and further weakening our economy. They ask AIG to give back their bonuses (which they should) but do not offer to give back the raises they received.

Something is rotten in Denmark, people. And the men and women who have been elected to office are doing nothing about it. My friend JVo once said, "You can't polish a turd... but you can paint it silver." Our elected officials have their spray cans out and are painting like crazy.

The answer for our government in this economy is the same for us:

• Spend less than we make (ideally: live beneath or well beneath your means)
• Pay off our credit debt.
• Have liquidity in the form of an emergency fund.
• Save an invest for the future.

That is the best way for individuals to "recession-proof" themselves. It works for governments, too.