My husband was in banking for 17+ years and we've owned our own business for over 12. We aren't Rockefellers or anything near that but here are a few principles that we live by that have gotten us through lay-offs, family illnesses, and deaths in the family. We both started from lower middle income families. We are both in our early 40's so we've still got a loooong way to go before we can retire. We also have five kids to raise and I haven't worked outside the house for nearly 12 years though I am full partner in our business. Hubby stopped working at the career he got his college degree in four years ago and so we are now completely dependent on our business as our sole source of income.
Your mileage may vary, but this is what has worked for us.
1. Not all debt is bad. You just need to keep your debt to income ratio under control. With debt you can leverage your assets to increase your worth. For example a home mortgage is a good debt so long as it does not cause you to struggle to take care of your other bills and responsibilities. But remember to buy at a discount and not at the top of the market just because you can.
2. Credit cards are not bad; however, you should never put more on your credit card than you can afford to pay off at the end of the month. Use it like a revolving account as opposed to adding more debt than you pay off of it each month.
3. Before you go off buying anything or taking vacations, etc. accrue and maintain a 3 to 6 month "safety net" for all of your monthly expenses. Then, lock this money away and don't touch it accept to add to it until you actually need it. NEED man ... not want. This isn't to pay for a jacked up new car, living room furniture or even a down payment on a house. This is money that is going to keep you going in the event of an emergency.
4. Always take care of all NEEDS before you spend a half-penny on WANTS. If you prioritize where the money goes, it will likely always go in the right places.
5. If you have kids, start planning for their future now. That means setting up an educational and/or savings plan for them now as opposed to trying to figure out how you are going to come up with the money when you really need to. Don't ever give your kids access to this money until they have fulfilled their obligations to get it (attending college and getting good grades or show you a written plan and budget of how the money is going to be spent, etc.) For instance, our oldest will be starting college in the fall but we aren't in a dither wondering how it is going to be paid for because we planned for this when she was still a toddler. Same with the remaining four ... scholarships are good, but they don't pay for everything that's for sure.
6. Don't buy your kid a car until they actually need one ... and make them work to get it. Cars are not rights, they are responsibilities. This will also keep your insurance premiums down. And no crap about ... well they worked for it. If they are under 18 and living at home they need your permission for any legal documentation ... car titles, insurance, etc. In most states minors still need their parents' permission to get a license. As for your own car, better to spend the money keeping it up now than have to having to jump into a higher monthly payment because it died and you've been forced to buy a new one; its cheaper than way.
7. Always have at least one month of food in the house at any given time, preferrably one month of shelf stable food and not just stuff in the frig and freezer. Same with water. Note: I shop monthly rather than weekly and I always go with a grocery list and planned menu. You'd be amazed how much money this will save you. At the same time though, be ready to take advantage of sales that will help you flesh out your pantry.
8. Shop the sales but don't get married to them. Just because something is on sale doesn't mean it is a good buy. Anytime you shop price compare. This goes for everything ... not just food, but cars, household future and appliances, etc.
9. Shop thrift stores if possible, or at least price comparison. The thrift stores in my area are really picked over all the time. The yard sales have also gotten pretty pathetic. However, there are some great flea markets and farmer's markets around here. But even then, you can still find better deals in regular stores on new or dicontinued items if you keep your eyes open.
10. Minimize the amount of money you spend on eating out. Man oh man, will that kill a budget fast. Which means learning to cook. And cooking from scratch would be even better if you have the time for it. Find the balance that fits your budget.
11. Make a budget and stick to it. Review it regularly to make sure that you are following it or if there are ways to save more money. Or if you have a budget item that requires more allowance ... but that means taking it away from other areas.
12. Put money in savings at least once a month, preferrably weekly or bi-weekly. And then don't touch the savings account. Don't use it to offset bad check writing habits (over draft protection). Just learn better habits.
13. If you get a bonus, put it in the bank, don't just go out and spend it. Or at the very least, put it away in savings until you've had a chance to think about the best way to spend it.
14. Don't pay your bills even a day late. Nowadays, companies are turning in those kinds of late transactions to credit scoring agencies as soon as they occur. A couple of late payments will kill your credit score right when you might need it.
15. Keep meticulous records. This is very important for a couple of different reasons. Taxes (in case you get audited), insurance proof (in case you need to submit a claim), personal budget review, etc.
I'm sure there are a ton of other good ideas out there. We all have common sense. But in a bad economic period, you want to be in the most favorable situation possible. Personal liquidity is a good thing, but debt isn't automatically bad. You just have to be in control of your particular situation rather than your situation controlling you.
A note here and not everyone will agree with me. Booze and cigs are wants, not needs. If you add up all the money spent on these every year by the average person there is no wonder people aren't saving any money. If you like really good booze then buy it at a discount by the case and then ration it out. And cigs ... well ... I ain't going there. My dad had his first heart attack at 48 and while he had genetic markers that probably didn't help, the primary reason for his early heart attack was smoking. 'Nuf said on that, we all pick our own poison.