The U.S. housing market has been in serious trouble for quite some time. To be exact, the housing market has faced serious decreases in sales for over a year. Similarly, the credit card industry is facing extinction.

U.S. homeowners simply can’t afford the homes in which they live. How did this happen?

Before you buy a home, you have to submit paper after paper. You have to show pay stubs, your tax returns, etc. How were people able to get into homes that they couldn’t afford?

It’s simple…mortgage companies, banks and other lenders became too greedy and selfish. They didn’t care about the financial well-being of their customers. Instead, these companies changed or altered their policies and procedures in order to “qualify” people for homes that were way out of their league.

Credit card companies pursued similar practices. Credit card companies gave people limits that were too high and signed people up for too many credit cards. What was the result? People started getting too far into debt.

Now, consumers who used their credit wisely and who know how to handle their finances responsibly can’t even qualify for low credit limits. Mortgage lenders have quickly changed their policies. Credit card companies have done the same.

So, how are consumers able to buy homes now with credit cards? Consumers who couldn’t qualify for homes through a traditional mortgage are now looking to put their home debt on credit cards.

Could you imagine putting that much debt on your credit card with only one transaction? Not to mention the fact that credit card interest is upwards of five times higher than traditional mortgage rates.

No wonder our economy is seriously distressed. No wonder our people can’t pay their bills. Although the economy is unraveling before our eyes, shady business practices are still being used. What will it take to turn the tide?

For years, companies have offered raises to their employees. These raises have come throughout different times of the year. Raises are often offered as job incentives. Employees around the country can kiss those raises goodbye this year.

Many companies are tossing annual raises out the window. Millions of employees will be making less this year than they did last year. “Stingy” raises used to be considered any raise 3% or under. It is a completely different story this year. Employees will be lucky if their salary doesn’t go down.

John Dooney, the manager of employment and HR strategy for The Society for Human Resource Management, said, “Companies are looking for ways to keep their business intact without hurting customer service or quality. This is a potential option.”

Five percent of companies nationwide have reduced salaries at some point throughout the past twelve months. However, companies are stopping there. In effort to reduce cost further, companies have also reduced benefits, cut work hours, implemented salary freezes and reduced early retirement options.

Companies are expected to cut salaries anywhere from 10% to 20% during the coming months. Jo Prabhu, CEO of International Services Group said, “Companies have to cut costs. If they don’t do that, they’ll go out of business. Both the employer and the employee have to accept it as a fact of life.”

Many Americans are grateful to take a pay cut and are even more grateful to still have a job. However, taking a pay cut for many others is still hard to accept. Only 17 percent of American workers would be willing to take a pay cut to keep their job. Sixty-nine percent of American workers admit that their number 1 concern is keeping their job.

Bernadette Kenny, chief career officer of Adecco Group North America shares her thoughts, “This kind of approach of attempting to retain employees as opposed to layoffs is a new phenomenon. Organizations appreciate the talent that they have and are doing everything they can to retain the talent.”

What are your feelings towards this new “phenomenon? Do you agree or disagree with these tactics used by so many companies?

No one is perfect when it comes to handling money. In fact, everyone messes up at least once. 2008 seemed to see more money mess ups than we have seen for decades. If you want to be sure to gain financial freedom eventually, you need to make sure you don’t make these money mistakes. There are the five biggest money mistakes ever made.

Mistake #1: You neglected your credit score
Your credit score matters more these days than ever before. Lenders are scared out of their minds, especially when they see the number of defaults, charge-offs and when they take a look at the credit crunch. Lenders aren’t looking to lend to medium-high risk customers anymore. Only low-risk people will be able to take advantage of loans these days. Lenders aren’t the only ones who take a look at your credit scores. Insurance companies and potential landlords look at these as well.

If you want to boost your credit score and keep it high, follow these steps:

• Pay everything on time. Set up automatic payments if you have to.
• Keep all of your balances low. You should try to use less than 30 percent of available credit.
• Try using an older card. Keep all of your credit cards active.
• If you don’t have great credit, borrow someones that goes. Add them as an authorized user on your account.
• Take care of and dispute all errors and old mistakes. Clearing up your credit report can go a long way in boost your credit score.

Mistake #2: You carry (or carried) credit card debt
The majority of Americans seem to think that it is OK to carry a balance on their credit cards from month to month. Not only do they waste a lot of money paying for interest charges, but they lower their credit score this way. Get rid of every balance you have on every credit card you use. Interest rates have skyrocketed and will continue to do so. Now is the time to cut your expenses to get those cards paid off. Talk with your lenders and see if they can put you on a program. It will be much easier to pay off your credit card balances now before your credit is completely shot.

Mistake #3: You took too big of a home loan or auto loan

Your home costs should not exceed more than 25% of your gross monthly income. Sometimes, if you don’t have any other big expenses, you can stretch that number to 30%. Transportation expenses should be kept at about 10% of your gross income. These expenses include insurance, payments, maintenance and fuel costs. Carefully set limits to the amount you can borrow for your home and/or car. Some general rules are:

• You can’t afford the house if you can’t afford a 30-year, fixed-rate mortgage.
• You can’t afford the car if you can’t put at least 20% down and get a four year loan.

Mistake #4: You used your emergency fund
It may seem like every time you try to build a savings account, you end up using it for some unexpected expense. Or, maybe you didn’t try to build an emergency fund because you had a great deal of credit available to you. Well, here is a news flash. Those days are long gone. Try to build an emergency fund that is equivalent to three months of living expenses. If you are living off of one-income, try to build a six-month emergency fund instead. In order to build that amount in your savings account, you need to start out small. You can’t expect to have a three month or six month supply by tomorrow. And, always keep your money at an insured institution.

Mistake #5: You are a sucker
You cannot be gullible when it comes to handling money. You cannot afford to:

• Agree on a loan that you can’t afford
• Take the financial advise of an investment salesperson (who are they really looking out for?)
• Fall into a get-rich-quick scheme
• Jump from one investment to another

You have to be smart and you can’t be a sucker. Set limits for yourself and for your family. Some ways to do that are:

• Live within your means
• Expect and plan for change
• Limit your borrowing (for a home, a car and for education)
• Only invest by using a long-term strategy

Make sure you don’t not every make any of these money mistakes. These mistakes are too common and can easily be avoided.

The most important thing your family can do is to get prepared. It is so helpful to be prepared financially and other ways. If there was a natural disaster that hit your area, wouldn’t it be nice to know that your family had enough food and water on hand.

It is just as important to prepare your family in the event of a financial crisis. Too many American families are not prepared with an adequate savings account, etc. You might have started thing more about getting financially prepared since the economic crisis hit our country several months ago. Instead of looking to government agencies to “bail” your family out, take a proactive role in bailing yourself and your family out.

Here are some great ways to get your family prepared.

1. Build a savings account. Ideally, you should have one year’s worth of income in savings. That number seems out of reach, but it isn’t. Don’t think that you need to have that much in savings by tomorrow. Your savings account will start off small. Start by putting a small amount into the account each week. Be consistent. You will be absolutely shocked at how fast your savings account will grow if you are consistent with your savings. Set small goals to help you achieve your larger one. Aim to have one month’s worth of income in the bank. Then, work on having three months. Then, six months. You will be building a secure savings account and setting fantastic habits for the future.

2. Get out of debt. You can get out of debt while you work on building your savings account. Sit down and look at all of your debt. Work on paying off the debt with the highest interest first. You will save yourself a lot of money by not paying interest payments. Create a payment schedule and stick to it.

3. Think about your credit. One of the biggest problems with American consumers right now is the fact that many of them could care less about their credit. What will your family do in a financial crisis if your credit has been damaged by carelessness? Your credit score and history can end up saving your family in a financial crisis.

4. Curb your spending. How many Americans would be just fine in this economic crisis had they worried more about saving instead of spending? How many Americans wouldn’t have to worry about losing their job if their savings account was worth more than the furniture in their home? Curb your spending in order to prepare for a financial crisis. Do you really need another $2,000 T.V. or could that money fit nicely into your savings account.

It certainly isn’t hard preparing your family for a financial crisis. Build a savings account, get out of debt, remember your credit score and curb your spending. It’s that simple. Stick to these easy steps to prepare your family financially for the uncertain future.