I realized I'm not the smartest person in the world when it comes to personal finances. But I know enough about what I "don't spend what you don't have" so not to incur debts way above my means. Of course, this concept did not come easy to understand especially at a young age, but it has been embedded to my brain, I use it as my moral common sense. The fact is, most of us rarely receive a "good financial advice". We act in impulse many times that gets us into trouble. When we do talked about personal finances, we mostly asked either a friend or a coworker. Their good but they are not the "expert" that we really need. Could this be why Americans are heavily in debt because we don't talked about personal finances at the very young age. Perhaps we learned from our own parents who were good providers but knows very little the intricacy of investments or the concept of diversification in creating a wealth of portfolios. My parents certainly qualify, as one that only knows typical savings, or CDs. That's it. But they were common sense people. They knew when not to get in trouble when it comes to debt, or the concept of "spending less than what you make". So why so many Americans are now in trouble; home being foreclosed. Is it because they were sold into buying thinking the market was simply going up and up and never to comeback down. Like millions of Americans who are now trapped in Interest Only Loan, they are now faced with the reality of "foreclosure" because they can't afford the higher rate.

My next door neighbor foreclosed on their house one half year ago. It was sold for "less than" what we paid on our house originally back in 2003. It's almost the same square footage and bedrooms. Yes, we are upside down about $40K according to Zillow.com It is scary to think that we'd lose value on our home, when three years ago, our house was worth was well over $400K. Compared to many homes in our area, our paper lose is minimal when others are faced with $100 to $200K lose in equity. Thank god we didn't use our home like an ATM machine.

Because our loan does not reset til December 2010, we feel TIME is on our side for the housing market to bounce back. At least, that's what we're hoping for. If not, we can still afford our house with our good income. In less than three years, we will paid off our Van. We should clear $700 a month extra adding that amount to our savings rate. We don't have any credit card debt now which puts icing on the cake. We don't intend to use it at all either. Our savings rate on the disposable income is $1000 a month on average, exclude our retirement savings aside. But I know we can do more by cutting back more on discretionary spending.


I'm sorry for rumbling on. It's already late. Ah! i have to work again tomorrow. At least I feel better now

Thanks for listening