I was listening to National Public Radio this morning and caught a few tidbits of news.  I purposely have been avoiding listening to the news recently because the economic data is so bad.  This morning I was shocked to hear that the rapid rise in unemployment in yesterdays news was more than epic.  It was the worse set of statistics ever released on unemployment in the 125 year history of the Bureau of labor Statistics history.  That says a lot.  We lost over 533,000 jobs alone this November.

When you consider the average unemployment check is not large enough to pay your mortgage, taxes, or car payments...that is beyond scary.  Today a mortgage payment can be several thousands of dollars a month.  There are student loans to be considered, and payments on charge cards.  Car payments, SEP IRA contributions, college tuition's and medical coverage all have a price tag attached to them.

When we think of where the price of housing has risen in the last few years, the price tag does not allow for a lot of expendable money at the end of the day.  Were we foolish to beleive this was sustainable?  When we qualified buyers years ago into income and debt ratios that ended at about 28-32%  there was at least some breathing room for the borrower.  Today there isn't.  Debt was pushed to the max. When you think about it that is a point of no return for many.  What about when life happens?  Sickness, job loss, health problems, divorce.  Where do we turn next?  That is why so many have walked away from their homes. 

Personal savings, a free and clear mortgages, equity in the home, and an emergency reserve fund  are needed to ride out the storms of life.  Perhaps this current economic storm is going to reacquaint us with the more important values in life.  We must always be prepared for the unexpected turns in life.