The federal government now reports that we have had 13 consecutive months of budget deficit. It's clear that we can't control federal spending. We can't even control state spending all that effectively.

What we can control is how we handle money in our own lives.

For example, Clark used a disposable 17-cent razor to shave for eight months. He dried it after each use to stretch his budget. Never once did he cut himself.

The razor may be trivial to some people, but it's really symbolic of a whole mentality about saving money. In another example, Clark won't pay for parking; he'll walk as far as he has to in order to find free parking. He picks up money he finds on the ground. That's simply who he is.

Of course, just worrying about low-cost things alone will not change your overall financial picture. But it's part of a process of changing what you spend money on and how willingly you spend it.

Consider this: You can brew a cup of coffee at home for about six cents a cup or you can pay more for it at a Starbucks or elsewhere.

Think about all you spend money on in your life. Where can you stretch a buck? Look at all your monthly bills and see what you can trim down.

In the big picture, are you buying more house than your budget allows? Are you cycling through cars too quickly? Owning a new car for 10 years is optimal. Buying used is even better. In fact, driving a used car for four years is the financial equivalent of owning a new car for 10 years.

This recession has been more painful than past ones not because we've had more unemployment. We haven't. It's been more painful because people went into this recession with a higher average level of debt vs. income than at anytime in the past.

When you have less debt and fewer obligations, you can save more money. So it doesn't start with making a 17-cent razor last and last, but it is symbolic of an overall reset that Clark wants you to do in your life.

Be careful, however, not to take the fun out of life. But do realize that possessions, debt and obligations don't equal fun. Experiences, family and friends do.

Economic researchers have found that being bombarded with text messages about saving money actually works, according to a recent Dow Jones report.

It didn't matter whether the texts were positive affirmations or threats about the dangers of not saving money. Either way people saved when prompted to do so!

The experiment was conducted in Peru, Bolivia and the Philippines.

Clark often talks about setting up automatic withdrawals from your check each pay period to a 401(k) or Roth IRA. The beauty of this approach is that you never miss the money because you never see it in the first place.

Remember, it's never how much you make, it's what you don't spend that is the key for financial security. Get in a mode where you just put money aside first. Clark thinks of David Chilton's book The Wealthy Barber, which details how a simple barber developed saving habits that outpaced all his wealthy clients.

What can you do in life to generate automatic savings habits? Sometimes simple reminders are all you need, as the researchers found.

We've got changes coming concerning your relationship with your bank. But no matter what happens in Washington, the most important changes are the ones you make in your own life.

There had been in the past a very popular publication with bankers called Fee Income Report. This publication was like a venue for them to swap tips on new fees and other ways to stick it to the customer.

That mentality in banking is going to go away. One change you'll see will be how you're assessed when you overdraw your account. It won't be the gouge it once was.

Let's face it, it's much harder now to keep track of balances with the ATM, checks, auto-drafts, debit cards and more. Banking has gone from being linear to us losing control! But you have to get it back under control.

Remember, they can only take advantage of you if you let them by overdrawing your account. Forget about the changes in D.C. We need changes from you!

You need a system, whether it's using something like Mint.com for free budgeting software so you know you won't overdraw, or instead just using an old-fashioned bank ledger.

If you know you can't keep accurate records, cut up that debit card even though it means sacrificing convenience! Whatever causes the gotchas, attack it and get back to simplicity in your finances.

The National Foundation for Credit Counseling reports that half of all people up to age 34 have absolutely zero savings. They can not lay their hands on a single penny they've stashed away!

There are a million reasons not to save. In some cases, unique circumstances actually make it so that you truly can't save. But that's unusual. Most young people just miss out on learning important lessons about saving because their parents haven't set the best example.

Perhaps it's also harder for those under 40 to save money today because this is the first generation that has had to adapt to money being plastic.

Some 15 years ago, when you wanted to buy something, you looked in your wallet or purse. Either you had the cash and made the purchase or you didn't and you walked out of the store. Your spending was controlled by your absolute supply of money.

But today, so many young people have never had to live based on a finite supply of money. It seems as if there's always the unlimited possibilities of credit lines and in-store financing.

Just look at the pitches that retailers get about why they should take credit cards. The big rationale is that people will spend more if they use plastic. That's just human nature.

So half the battle is unlearning what you're already learned about spending and saving. The best way to do that is to set up automatic withdrawals to a separate savings account when you get paid every week. Making it a habit that you don't have to think about is the key.

Or maybe you need to go Neanderthal and only buy things when you have the actual cash. Remember, it's often the small expenses that eat you up because you don't feel them accumulating. Try going cash-only for your daily pocket money.

The Los Angeles Times reports an event called the Frugal Festival recently drew 300 people looking for coupons, freebies and the chance to trade money-saving advice with fellow cheapskates in the L.A. area.

The consumer champ definitely would have been at home at this event. Except if he had his druthers, it would have been called the Cheap Festival!

The Frugal Festival was the brainchild of Julia Scott, a former newspaper reporter who now blogs about ways to save money at BargainBabe.com.

Some economists are terrified of a permanent cultural shift as people get more comfortable to the idea of saving money. Yet we are the most over-stored nation on Earth, with a conservative estimate of 20 sq. ft. of retail space for every person in the United States.

You don't, however, build long-term prosperity by spending, spending, spending. If you're a business, you create it by investing in plant equipment, research and development and new technology.

So, yes, Clark's longtime message of save more and spend less will slow down the nation's economic recovery in the short term. But long term, it sets the foundation for a much stronger America and higher economic growth.

We've all heard Clark encouraging people to adopt saving money as a lifestyle choice, but not everyone can easily heed the message. In fact, Americans spent almost $100 billion on gambling in 2007, but only saved just a little more than $50 billion, according to Jason Zweig of The Wall Street Journal.

So we are twice as likely to blow money in a casino or on lottery tickets than to save for our future! In fact, Clark calls the lotto "the ultimate tax on people who are choosing to reduce their wealth" so that the rare person can win.

Several years ago, the consumer champ was intrigued by a Forbes article that advocated for a combo savings/lottery ticket. The idea was that 50 cents out of every dollar spent on a lottery ticket would go into a personal savings account and the other 50 cents would pay for the jackpot.

Now, a Harvard professor has convinced a group of credit unions in Michigan to experiment with a similar approach. With the "Save To Win program," you buy a CD and are automatically entered into a raffle to win anywhere from several hundred dollars up to $100,000.

This is behavioral economics at work. You can harangue people all day long to get them to do what they know they should already be doing. But they may only start saving when you incentivize them.

If this is what it takes, then so be it. Clark hopes this becomes a national phenomenon and state lotteries consider implementing the Save To Win program.

Have you heard of the voluntary simplicity movement? This began as a small movement of people who were revolted by consumption and encouraged others to really analyze their needs vs. their wants.

Years ago, Clark interviewed two proponents of the idea on the show -- Amy Dacyczyn of The Tightwad Gazette and Marc Eisenson of Good Advice Press.

Today, the idea of voluntary simplicity is really gaining a lot of traction in our down economy. USA TODAY reports that people are beginning to understand that taking on more debt just to have more belongings only increases the complexity of your life and the level of stress.

In fact, 47% of consumers now report they already have what they need -- however they define that statement -- according to the 2009 MetLife Study of the American Dream. And 32% of consumers report that they're spending less now and expect to keep doing so, according to a recent Gallup Poll.

Too bad Clark didn't copyright his "save more, spend less and avoid rip-offs" slogan. It's popping up everywhere these days!

Americans at many income levels are wheezing with debt. The New York Post reports 20% to 25% of every dollar in lower and middle income families is devoted to dealing with credit card debt. That fact alone speaks to why the simpler life is better.

We're in the unique situation of living better than ever when it comes to having possessions, but at what price? Many of us have precious little financial peace of mind.

CLARKONOMICS: Executive producer Christa still remembers how dejected Clark was when Americans first started spending more than they made during the early 2000s.

Well, finally, we're seeing a reversal of that longstanding trend. In May, the average American saved 7 cents of every dollar earned. Heartening news, but still not enough for the long term. Americans typically saved a dime on a dollar before the early 1990s.

The May numbers may be something of a false positive. After all, withholding was recently adjusted and people had more in their paychecks.

But in general, the saving rate has been trending upward for months, which is good news.

Yet some people in Washington and on Wall Street are scared of our newfound zest for savings. Why? Historically, consumers accounted for close to 70% of economic activity. That means it will take longer for the economy to grow if we stop spending like chumps.

Be that as it may, the long term gains of developing a savings habit will put us all in better stead for the future. It all comes down to accountability. You must hold yourself accountable and do what you need to live on less than what you make.

How much can you save?

Late pop star Michael Jackson was said to be $400 million in debt at the time of his death. Like many celebrities, he lived beyond his means.

Talents as diverse as actor Stephen Baldwin, former baseball player Jose Canseco and former basketball player Latrell Sprewell all lost their homes to foreclosure recently for the same reason.

In fact, the late Ed McMahon was only rescued from foreclosure by an anonymous Northern California real estate investor, according to The Wall Street Journal!

Professional athletes can make incredible amounts of money, but their earning window tends to be for a relatively short period of time. Kathleen Pender of The San Francisco Chronicle shares a couple of disturbing trends courtesy of Sports Illustrated magazine:

• 78% of former National Football League players go bankrupt within 24 months after they stop playing.
• Some 60% of former National Basketball Association players go bankrupt within 5 years of retirement.

What's going on here? Economists talk about "marginal propensity to consume" (MPC), an economic theory that says as income rises, spending rises in tandem.

So if you're not saving anything at all, that's a recipe for disaster when the money stops coming in. The King of Pop's $400 million debt helps up see why we should all be paying ourselves first.

Americans are borrowing money at a decreasing rate, according to a new stat from the Federal Reserve. The amount of borrowing plunged in March 2009 by the fastest level since 18 years ago. In fact, that's the greatest reduction in borrowing dating back to World War II, if you go by real dollars and ignore inflation.

Americans are making individual decisions to not spend money they don't have. That's so unbelievably healthy for the long term. Cynics, of course, say this is a temporary phenomenon. But Clark begs to differ.

Back in 1976, the average American saved roughly 15 cents on every dollar. In recent years, however, most Americans saved zero or even negative $1.03 for every dollar they made. How do spend negative $1.03 on a dollar? By borrowing!

Today, thankfully, we're saving almost a nickel on a dollar!

Some people argue that saving more and spending less equates to a lower standard of living. Is not having closets full of clothes you never wear a lower standard of living? If the average car on the road is 6 months older than it used to be, does that equate to a lower standard of living? How about if you live in a smaller house?

Clark looks at your net worth, which is your assets minus your debts.

For too long, the double barn door metaphor could have described our spending. As one side of the barn opens wider, so too does the door on the other side. So we as a nation were always spending whatever extra we made over time. In economic terms, it's called marginal propensity to consume.

The alternative is to learn to be more careful with what you spend and pay yourself first.

Have you seen ads being run by the debt-settlement outfits on late-night TV? They promise to reduce your credit card debt to just pennies on the dollar without making you file for bankruptcy.

But that promise is an illusion. Here's the scoop: You usually pay an upfront fee to the debt-settlement firm, plus a monthly retainer. Their strategy is to get you to stop paying on your bills. They typically have you take the money you would have paid on monthly minimums and stash it in a savings account.

The basic idea is to make the credit card companies so desperate that they'll settle with you. The reality, however, is that you just wind up damaging your credit.

In fact, complaints about debt-settlement firms have doubled in North Carolina; tripled in Florida; and quadrupled in Oregon, according to The New York Times.

The reason these companies even exist goes back to 2005 when the bankruptcy laws changed in our nation. At that point, the banks stopped being cooperative with affiliates of the National Foundation for Credit Counseling (NFCC). They were cynically trying to force people into a position where they had no choice other than to pay up. The debt-settlement firms then popped up promising they knew how to defeat the banks.

The irony here is that the banks have now agreed to work with the NFCC again. A newly announced debt-management initiative offers reduced interest rates and the possibility to waive your late fees.

Bank United, the largest independent bank in Florida, failed this week. This is going to cost taxpayers roughly $5 billion. After the recent stress tests, it appears lots of smaller banks, ones that don't fall into the too-big-to-fail category, may not make it -- and we'll all be left holding the bill.

What if you are a depositor in a bank that ends up being seized this summer? The FDIC is extending the $250K insurance coverage for several more years, so while your deposit will be safe, the money you earn on that investment is subject to change. The acquirer of your bank may decide to change rates on your existing CDs, for example. While that may seem like a rip off, remember that it wasn't the acquirer who entered into a contract with you initially. The good news is you won't lose your seed money-- just the earning power that money may have originally had.

Britain is in danger of having its debt that the government sells (its version of Treasuries), downgraded to third world status. Like us, the British government has been spending money it doesn't have in an attempt to jumpstart its economy. And now, credit ratings agencies are calling into question their ability to honor these debts.

Why is this a scary thing for us? Britains' debt load by next year will be about 66% of their output of goods and services. America's debt load by next year, with all the deficit spending, will be almost 71%, a level of debt considered outrageous even in war time.

But forewarned is forearmed. We still have time to turn this around. The problem is that we're dependent on the kindness of strangers to keep our economy cooking these days. Communist China, for example, now holds over $1 trillion of our debt. But how do we really keep ourselves cooking? Simple. We don't spend money we don't have. Yes, it's complex with all the bailouts and promises flying around. So how do we come up with money? We could tax ourselves every which way -- or maybe, we conclude that government should be required to do less.

It's become normal in wealthy western culture to depend on government to "have your back." It previous times, we relied more on neighbors, relatives and charitable organizations to lend a hand. Maybe it's time to get back to that model. Executive producer Christa talks about a charity she saw on Oprah called Good News Garage that fixes cars for the needy to help enable their job search. Clark likes this. While it would be great if government was able to provide for all, right now it just can't afford that. So if you are doing reasonably well, now is a great time to give back and help out others. Clark supports a constitutional amendment that would require governments to balance their budgets. Sounds quaint, but it's a realistic step towards changing our relationship to government, and how much we expect from it. Clark thinks we as a country have gotten a little bit lazy. If we don't want to be downgraded to third world country status, we need to get it in gear.

In economic times like these, we cycle between pessimism and optimism regarding the future. It's hard to wrap our head around the fact that we're in a multi-inning game, and it's just the early innings. It doesn't mean we'll be facing ultra-high unemployment for years to come, but it does mean that a full recovery is a long way off -- possibly until 2015.

We as a country have been living larger than our means for quite some time, living on borrowed money from the late 90's through 2006. Banks were loaning up to $30 for each dollar they put up. The difficulties in the stock and banking sectors were a direct result of this outlandish risk they were taking.

The latest estimates from the Fed say that unemployment will rise in 2010 to 9.6%, going down to the 7-8% the year after. So it appears that things will get a little worse at first, then a little better, but things probably won't return to previous levels for years to come. Why? Because we have too much of everything that was made, built, sold and borrowed during the comsumption years-- excess houses, office buidlings, manufactured goods, you name it. It will years to soak up this surplus and work itself out of the economy--possibly as long to unwind as it took to build up.

But it's not all gloom and doom. If your household didn't handle money as well as you like, and you decide to work off your debts, resolve to pay it off one step at a time. Make small adjustments, and just like the economy, your "fiscal fitness" will slowly work itself out. Don't worry so much about when will things get better-- rather, ask yourself whether you are taking the right steps to make yourself finacially healthy.

Need some news of a silver lining in the recession? Americans have reversed a two-decade buying binge with borrowed money in response to the slowing economy.

Earlier this decade, the average American became a "negative net saver" for three consecutive years. That simply means they spent more money than they brought in. At the time, the money and credit were flowing freely.

But there's a cost in anxiety and a loss in personal freedom when you owe money. Simply put, it is financial enslavement.

Depending on which economist you believe, we're now saving anywhere from 5 cents on the dollar to 8 cents on the dollar.

Remember, spending less than you make is the only way to create financial security over the long haul. Forget about winning the lottery!

Now, the cynics say that most Americans will go back to being spending fools when the economy picks up again. What do you think? Be sure to vote in our poll!

Meanwhile, one of our previous polls about the United States Postal Service asked what frequency of mail delivery you'd like to see. The runaway winning choice was 5 days a week.

Of course, Congress is opposed to any change in the current 6 day/week delivery schedule. Yet the USPS is ailing financially and having trouble keeping to that schedule.

The USPS should be self-supporting, but it seems the only way to keep them afloat to deliver 6 days/week is with taxpayer money -- and Clark is totally opposed to that.

Savers can breathe a temporary sigh of relief now that government coverage on money market funds has been extended through Sept. 18, 2009.

Money-market funds have long been considered just about the safest place to stash cash. During the nearly 30 years of their existence, no one had ever lost a single penny in a money market fund.

Until last September.

At that time, Clark took a number of gut-wrenching calls from listeners who had money in one particular fund called the Reserve Fund. The Reserve Fund made silly bets with people's money and lost big in the failure of Lehman Brothers.

As a result, the Reserve Fund was forced to do something that's anathema to money market funds -- they "broke the buck" by devaluing shares below $1.

Money market funds don't have FDIC insurance. So the federal government had to set up an emergency guarantee program to quell people's fears. Their goal was to prevent a run on money market funds. That initial guarantee had been scheduled to expire later this month.

The consumer champ vividly remembers one call that came in last September from a listener whose father had retired on the $270,000 he had in the Reserve Fund. Suddenly, that $270,000 was marked down to zero when the Reserve Fund started freezing people's accounts before the government stepped in.

Your money market funds remain completely safe with the extended government protection. The industry itself has proposed new guidelines that should prevent a similar calamity from happening again. Of course, it's very important that the procedures go in place by September 2009 when the government protection ends.

By the way, Clark never his took savings out of money markets. That wasn't necessarily the wisest choice, but he firmly believes this whole Reserve Fund episode was a freak occurrence and won't happen again.

We've all heard reports about how even those people who are financially secure are trimming down their spending. The economic tenor of our country is causing a lot of us to take a hard look at our wallets.

But is it possible to save too much and spend too little at a time like this? Clark thinks so. If you are financially secure, the risk here is that you'll miss some great deals on travel, vehicles, real estate and stocks.

Kiplinger's has a 4-point test that you can use to assess your financial situation. It should help you gauge if you should be loosening up your purse strings. Ask yourself these important questions:

• Do I have the same (or more) household income than in recent years?
• Is my job reasonably secure?
• Are my financial obligations still manageable and roughly where they were last year?
• Am I saving a minimum of a dime on each dollar?

If you pass the Kiplinger's test, get out there and look for the deals!

For example, Clark is obsessed with travel. The deals available right now are the best they've been since 2002. Fares to Europe from the East Coast are as low as $400 round-trip in some markets. And on the domestic front, there's a summer airfare war between Southwest Airlines and AirTrain Airways.

The only market with lousy airfares right now is Hawaii, but that's because of a unique set of market conditions.

Finally, remember, if you're under 40, you have absolutely got to consider the stock market. There's real money to be made in the long run. Don't be paralyzed with fear!

CLARKONOMICS: Over the last several years, we as Americans became "negative net savers" -- a pointy-headed term that simply means we spent more money than we made. It got to the point where the average family debt versus income had roughly doubled in less than 10 years.

Now, the trend seems to be reversing. We are now saving a nickel out of every dollar, according to preliminary January numbers from the federal government. That's the best we've done in a longtime. Of course, it's not the "dime on a dollar" formula that Clark raves about, but it's a start.

So where are we cutting back in order to sate our newfound hunger for thrift? The car category accounts for nearly two-thirds of it. Americans are simply sticking with their old vehicles instead of buying new ones. The second largest category where we've cut back on is eating out. After that, we're trimming the budget on clothing, jewelry and alcohol.

In most recessions, sales of alcohol do really well. But this time around, people are trading down. For example, fancy wine drinkers may be switching to Two Buck Chuck, while beer drinkers are avoiding expensive and exotic microbrews in favor of cheaper populist choices.

Clark has historically loved money-market accounts and recommended them to listeners as a great choice for savers. But right now, unusual market conditions mean that he's about to go down a different path with his advice.

At this time, money-market accounts are not a good deal because what you can earn has gone down to a nearly microscopic level. So today he's recommending CDs for the first time in about 7 or 8 years. At BankRate.com, you'll find 1-year CD rates around 3.75%; 2-year rates around 3.65%; and 5-year rates around 4%. (Editor's note: Rates are accurate as of 01/07/09.)

Normally you'd sneeze at these rates, but right now they're fairly competitive. The only drawback with CDs is that you don't have instant access to your money. You may face penalties or forfeit some of your interest if you need to dip into those funds early.

Should you absolutely need quicker access, try an online savings account with one of the "directs": ING Direct, HSBC Direct, Emigrant Direct and others. You'll earn around 2% or 3%.

Finally, you might want to consider a tax-free money market fund (aka a municipal money market fund) if you have a family income of more than $100,000.

A recent Wall Street Journal article announced that Americans are finally beginning to save more and spend less. That's great news, right? Not exactly. The article went on to explain how a nation of consumers tightening its purse-strings can actually prolong our current recession.

Historically, if you wanted something, you actually paid for it. But then in the late 1980s, we saw a modified version of the American dream where banks handed out money like candy. Human nature being what it is, we took advantage of it.

The peak of the madness was probably the "no, no, no" plans -- no payment, no down-payment and no interest for a year. You could get furniture, a new car, a new TV, heck, even a new house in this way!

So should you heed The Wall Street Journal's warning and go back to spending more freely? As Clark would say, don't be a sap. You're not being patriotic by spending yourself into oblivion. Yes, in the short term, saving more and spending less could deepen the recession, but it also makes it possible for a real long-term recovery. That's just a fact.

So if you've newly discovered thrift, know that it benefits you. Your anxiety goes down as you extinguish debt.

Negotiating frivolous spending with your spouse or significant other is particularly important in a tight economy.

Take the example of Christa and her husband Mike. Mike is known as "Name Brand Man" on the show for his love of overpriced products -- particularly pricey shaving accessories. Mike feels comfortable spending $140 on a razor handle. That's a far cry from Clark's efforts to make a single 17-cent razor last for a year!

One of Mike's recent purchases was a bottle of NXT shaving gel that has a light-emitting diode packaged directly in the clear plastic bottle. Christa was about ready to call 911 when she first saw the glowing light coming from her shower late one night. She thought there was an intruder with a flashlight in her bathroom!

Name Brand Man paid around $5 for a 7-ounce bottle of NXT. Not too bad, says Clark. But that's still 9 times more than the penny pincher paid for a larger bottle of budget shaving cream at the dollar store.

With every couple, you have to choose your battles. Christa knows she probably can't change Mike's spending habits. Each person has to decide what to let slide and what needs to be negotiated.

One word of advice about negotiating spending in a relationship: Always open the conversation by volunteering what you spend on that can given up before pointing fingers at your significant other's spending.

And if you live alone, you've got to look in the mirror and have the conversation with yourself.

Clark has whined for years about how much we as a country have refused to save. In recent years, in fact, we had even ventured into the land of negative net savings rates for the first time ever -- even counting the Great Depression years!

But now we're in a process of "de-leveraging" and some people are beginning to save again. The chief economist for Moody's Economy.com now predicts the saving rate will be at 3 percent in a year and 8 percent after 2010.

A USA TODAY/Gallup poll finds that younger people are saving much better than those over age 50. According to the survey, 44% of those in the 18-29 age range are increasing their savings, while 40% of those in the 30-49 range are doing the same.

Could we be witnessing the end of the "when the going gets tough, the tough go shopping" mentality of the '90s?

In recent years, we as Americans were proud to have more stuff than anybody else in the world. Even the penny-pincher himself has a confession to make in this regard.

Clark has lost around 25 pounds over the last 8 months and finally decided to donate his old slacks to charity. He had 12 pairs of identical khakis -- and 2 had never been worn and still had the tags on them.

No doubt he saw them on sale and just couldn't resist a bargain. Clark is ashamed to admit it, but it's true. We as Americans need to rethink how we spend and consider our needs versus our wants.

In this new era of thrift, Clark is hearing his "save more, spend less" motto echoed just about everywhere you turn. Years ago, he was advised by lawyers to trademark the motto, but he ignored their counsel. Actually, he's glad he didn't do it -- the penny-pincher wants people to be able to trumpet this important message.

Clark recently happened upon a website called Spendster.org. Users go to this site to confess their monetary sins. There are even video accounts of people detailing how they waste money. It's not done in a boastful or braggart manner; rather, it's people publicly shaming themselves to teach others.

We as Americans need a hard restart about how we spend our money. Clark just worries that the only ones who will go to a site like Spendster are those with no problem at all or those who have already healed themselves.

The other side of the coin is a site like Mint.com, which offers free online budgeting tools. They'll help you track your spending and your investments as you start to take control. Another website called FeedthePig.org tries to encourage you in a lighthearted way to save.

Right now, we're currently in a reactionary, knee-jerk mode where consumers are expecting to drastically cut back on their holiday shopping. That's just a temporary phenomenon. But Clark wants you to think long-term about how to change your money habits.

If you are a small business or an individual, it should come as no surprise that it's difficult to borrow money. Even businesses trying to borrow through the SBA loan program are having difficulty. The reality is that credit is loosening for the big players, but not necessarily for individuals quite yet.

One consequence of the difficulty in borrowing is that GMAC has raised lending standards so that you must have a FICO score of 740 or above. That's only a little more than a third of Americans. Historically, that's a very different scenario than it has been in the past when they would lend to anyone with a pulse who wanted a car. Now the pendulum has swung the other way.

It's no surprise either that auto sales are the worst they've been in 25 years. But there's always a silver lining to be found somewhere. If you're in a position of economic strength, now is a great time to buy a large vehicle. There's a massive oversupply of SUVs, for example, that should hang around for another 3 to 6 months. With gas prices dropping, now may be the time to strike.

With all the fever surrounding Election '08, Clark wants to (jokingly) throw his hat in the ring with a presidential bid for 2012! His platform probably won't get him elected, but he still wants to lay it out for your perusal.

• Spend only what you make -- In a Howard administration, your president would pass a balance budget amendment to the Constitution. We'd become a pay-as-we-go country -- instead of doing the opposite as we have for years.

• A flat income tax policy -- The flat tax would be somewhere around 18%. There would be a high standard deduction so that those with lower incomes don't get pinched. A flat income tax would also eliminate the corruption in Washington and let you know what tax burden you have.

• No more employer-provided retirement plans -- Goodbye to the 401(k), 403(b) and any other form of employer-provided retirement. Your president would require that every dime on a dollar your earn goes into a personal retirement account with ultra-low management costs and simple investment choices.

• Just say no to socialized medicine -- In a Howard administration, there would be just 12 health plans offered: 3 HMOs, 3 PPOs, 3 HSAs and 3 of the traditional 80/20 splits.

Every insurer would have to sell identical plans. That way you could switch to another insurer's HMO plan No. 2 if your insurer's HMO plan No. 2 is too costly. You would pay your premium based on age, and there would be no redlining based on your past medical history. You wouldn't be required to have health insurance, but you wouldn't be allowed to buy it when you're sick; instead, you'd have to wait 18 months.

A word about Medicare: Seniors would buy healthcare from private insurers in one of the 12 plans, but the government would subsidize catastrophic care at ages 55 and older.

Is it possible to simultaneously achieve the first 2 platform points? Of course not. By 2028, the costs of Social Security, Medicare and Medicaid will exceed what is today the entire federal budget, according to Forbes. So we would either have to raise taxes to an unconscionable level or tell people the truth that we can not afford to be Santa Claus to everybody.

In a Howard administration, we would all need to do a hard reset about the issue of personal responsibility vs. what we expect from government. Santa's sack is getting less and less full, so you've got to be your own Santa. Clark will be running on the Ebenezer Scrooge platform for 2012!

CLARKONOMICS: 20 years ago, the average American saved a little more than a dime on a dollar of income. Today, that savings rate is around zero. Over the last few years, we had 3 consecutive years when we spent more than we made. In short, we’ve been spending fools.

However, the decision to spend and not save had some logic at the time. Money was available below its real cost for a few years. There was free financing on homes, furniture, electronics, cars, etc. The cost of funds was driven so low that economists say money was available “below actual cost or value.” So people made what seemed in isolation a very wise choice. But eventually you have to pay.

During Clark’s appearances, he’s fond of talking about the “no, no, no” plans. That’s when you hear or see a garish ad about “no down-payment, no interest and no payment until 2050!” The “no, no, no” plans psych you into thinking your purchase is cost-free -- but it’s not because you create an obligation. We as a culture have become a nation of payment buyers.

A new chart from McKinsey Global Institute shows that, using constant dollars, the average American in one generation increased debt obligations by 225%. That’s at the same time as we stopped saving money.

So you have a double-whammy -- we’re skating on thin ice and simultaneously eliminating our safety net. If you have ever had the experience of watching thin ice melt, Clark wants you to picture that image when you go to buy something on credit that you can’t afford.

Meanwhile, start small if you’re not saving. Don’t aspire to save a dime on a dollar all at once. If you have open enrollment at work and you’re not contributing to your 401(k), start with just a penny on a dollar. That’s 1% of your income and you won’t miss it. Nor will you miss a dime on a dollar if you go up incrementally in small steps from 1%.

No access to a retirement plan at work? Take a penny on a dollar and have it deposited in a savings account at a credit union. You’ve got to start somewhere.

Do you have money that hasn't been touched in a while in a bank account, brokerage house, insurance policy or company stock? After a period of time, the State eventually rules that account dormant, and that money gets sent to an unclaimed property office. The state office it gets sent to depends on where the company involved is based.

Recently, USA Today reports that certain states suffering from budgetary problems have decided it's ok to steal these leftover funds from you. Washington, Delaware, Alabama, Oregon, South Carolina, Louisiana and Kentucky changed their laws so that it would be legal to seize unclaimed money and not give it back.

But there's good news: there's a way to find out whether you have dormant money, so you can claim it before the state does. A website called Missingmoney.com allows you to pop in your name and see if you (or your relatives) are due a refund. Do a multi-state search to include the state you live in and the headquarter states of all your previous employers. Always search in Delaware and Connecticut too, as most stock and insurance companies are based there. Another website to check is unclaimed.org and if you've ever had an FHA loan, be sure to see if there are leftover assets waiting for you at hud.gov. You could be a hero to a loved one, or be the beneficiary of money you didn't even know you had!

The high-end business media has undergone a shift because of the economic downturn. You used to see stories on "How To Make More Money" or what kind of status symbol vehicle or watch you should have. But we're shifting to a new era of thrift.

Even a high-end publication like BusinessWeek recently ran a story called "25 Ways To Save More Each Month." Below are a few excerpts:

• No. 1 -- Track your expenses.

• No. 3 -- Cut out investment charges and fees.

• No. 4 -- Cut back on eating out.

How many of these tips are you doing??

CLARKONOMICS: The latest figures show that spending in June was not good. The economic stimulus payments did not work as hoped. When you look at the rate of inflation, spending actually went down.

So now is the time for surgery on your spending. The reality is that 80% of us could make nips and tucks in our budget. For example, buying store or generic brands can increase purchasing power by 20% or 40%.

You also need to monitor your needs vs. your wants. Nobody holds a gun to your head and forces you to buy Starbucks!

What can you do in your life? Can your cable or satellite bill be trimmed? Clark was recently making a deposit at a stock brokerage. The woman who took his money wanted to know what to do about her expensive phone bill. The answer is simple: Ask for the tariff rate from your monopoly phone company.

CLARKONOMICS: Wachovia, Washington Mutual and National City -- 3 of the nation's top banks -- have all had to go looking for more cash, but hundreds of smaller banks around the country won't be able to find an angel to avoid failing. If you have less than $100K in a failing bank, none of what Clark is about to say matters to you; you'll be protected up to the full FDIC limit of $100K. But many business owners, people with inheritances and local governments have deposits that exceed that limit.

What can they do to avoid getting burned in the event of a bank collapse? CDARS.com extends FDIC protection up to $50 million by spreading your money among a number of participating banks. That way you never have more than $100K at any one financial institution.

On a related note, many people are upset that savings rates are in the toilet. But there are deals to be found if you search around. Many of the deals come from unusual sources. For example, CapitalOne.com is looking for a quick cash infusion on the cheap. So they're offering a simple savings account that pays 3.50% APY (accurate as of 07/31/08) if you have a minimum of $10K. Clark likes to check BankRate.com for CD rates. Do you have reservations about the financial health of any of these banks? You'll be fine as long as you stay below the FDIC limit.

According to Business Week, you now have a 1 in 4 chance of experiencing a 50% decline in your income because of a job loss. That puts most of us in a very difficult spot as the average American family is not saving and continues to live on borrowed money.

The reality is that corporate America no longer has a lifelong compact with us. It used to be that you worked for one company for a lifetime; the company was good to you and you were good to them with your loyalty. But today, it's more like we rent each other. Employers are rewarded by Wall Street when they pink-slip you.

About two-thirds of us have little or nothing saved for retirement, which means that one-third of us are saving. Meanwhile, about 30% of Americans pay their credit card balances off in full each month. Hmmm. Clark often wonders if the net credit card payers are the same sector that's also saving for retirement.

But back to the topic at hand: If you're in dire financial straits, you've got to tackle your problems slowly. Remember, a starvation diet hardly ever works. But those who moderate their diet over time can make great progress.

The same thinking applies to your financial health. If you have a 401(k) at work, start by investing as little as 1% -- that's 1 penny out of every dollar. Then you can bump it up by another 1% every 6 months or so. You'll hardly notice the difference in your wallet and you'll be developing a great habit.

On the other hand, Clark's advice about spending money comes from the school of shock therapy. If you know that the Visa or MasterCard in your wallet makes you spend money, then don't carry it in your wallet anymore!

Clark's now been using Mint.com for several months and loves it. Here's how it works: You register all your accounts with them and they analyze your spending to tell you if you'll meet your financial goals.

After Clark's high praise for the free service, Christa finally checked out Mint and also loves it. She thinks it's even easier to use than Quicken or Microsoft Money.

In addition to tracking your spending, Mint will also send you simple reminders when your bills are due. One of Clark's credit card bills got lost in the mail, but Mint reminded him so he didn't have to get a late fee.

So the Internet just offers one more tool that can help you gain control over your spending. But don't overlook the old-fashioned envelope method or the notebook method of keeping track of your expenses.

CLARKONOMICS: There's a new report out about the difficulty that we're having handling everyday expenses. About 10% of baby boomers can't meet the most basic daily expenses. That translates to millions of people being so broke that they have to rely on family, friends or charities to make ends meet. The grown kids of baby boomers are having even more trouble. In 4 of 10 cases, the parents have to provide money for their children to pay bills.

Yet, overall, we're wealthier than we were a generation ago. The problem came when we started taking on too many obligations of every kind. We bought larger homes even though the average family size has been getting smaller. With cars, we've managed to snatch defeat from the jaws of victory by purchasing overly fancy vehicles. The average car purchase in the Unites States is just under $27K, and that's before interest on a loan and taxes. But you can buy a vehicle so much cheaper if you don't load it up with extras. And nowhere in the Constitution is it written that you need to get new wheels every 3 years!

So be realistic about your obligations. Are you stretched past the breaking point? Analyze every bill -- cable, satellite, Internet, cell phone, etc. -- and see where you can trim. For example, cable and satellite are not more essential than food on the table. Perhaps you can cut back on your programming package. Think about ways you can make little nips and tucks.

The ancient Greek philosopher Aristotle is credited with teaching the following: "We are what we repeatedly do. Excellence then, is not an act, but a habit."

Everyone has both good and bad habits. Clark used to eat ice cream nearly every single day of the year. Then he discovered his cholesterol was too high during a checkup. His doctor suggested cutting back on the frozen dairy treat; he didn't advise going completely cold turkey. Clark had to reprogram his brain to not have a pint of ice cream after dinner. Now he only indulges about once every 2 weeks. On the flip side, he has a good habit of exercising nearly every day.

You can actually will yourself to develop good financial habits. You can create a savings habit where there hasn't been one. Many people do this by setting up a 401(k) to automatically take money out of their check before they get paid. You can also do the same thing with T. Rowe Price's Automatic Asset Builder, which takes a minimum of $50/month from your paycheck and pops it in a Roth IRA.

But you've got to make that conscious, mechanical decision to make a change. Then over time, it will become automatic. One of the easiest ways to begin saving is to use a change jar at home and empty out the coins in your pocket every night. Other talk show hosts suggest saving your singles when you break a larger bill.

The key is to analyze yourself and see how you can make a change. You may fall off the wagon several times, but you need to keep at it.

It's no surprise that people are becoming more careful with their money. Research shows that folks are more interested in what people like Clark have to say. He's like a firefighter and the economic house is on fire -- they want him to put it out.

In an effort to scare up more cash, Christa recently had a garage sale. Unfortunately, she had 2 bikes stolen during the sale. Wow, times must be really tough; both bikes had flat tires and she was only asking about $10 each!

The San Francisco Chronicle recently ran a chart that detailed what's "in" and what's "out" when it come to your finances. These are classic examples and you may already be doing many of these. It's "in" to save, eat in, take a staycation, fix your old car, work past 65 (!), go to the library, drink tap water, take public transit and patch up your house. It's "out" to borrow, dine out, take an expensive foreign trip, buy a new car, retire early, go to the book store, drink bottled water, drive and remodel your home.

Clark recently read another story about a remodeling company that catered exclusively to wealthy clientele. This company is pink-slipping 25% of its workforce because even the rich folks are scaling back on remodeling. Likewise, the volume of laser eye surgery is declining because of cost. Maybe wearing glasses isn't so bad after all…

There's one area where Clark doesn't think you should cheap out. Waiters and waitresses are reporting that their tip income is down. The reason isn't only attributable to a decline in traffic. Rather, people are becoming stingy tippers. But you shouldn't take the tip income out of your server's pocket because you lived it up with fancy wine and lush desserts. Tip fairly based on service.

Have you ever felt down in the dumps and used shopping as a pick me up? Well, now a journal called Psychological Science confirms what we've long heard anecdotally. People do tend to spend more when they feel down. Are you prone to spend money when you're blue? Clark suggests trying to break the cycle by finding a new response. Go for a walk or go to the park if it's a nice day. Clark likes to exercise when he's feeling down. If you have a conditioned response that's bad for you, you've got to work to change it. This touchy feely kind of stuff is more something that Clark's friend Suze Orman would talk about. But you know what? She's 100% right about this stuff.

Budgeting is a topic that's front and center again for many Americans. Many people think of budgeting like being in prison, but Clark thinks it's freeing. Budgeting lets you reduce your financial insecurity and gain control back. There are great, free budgeting tools online like Mint.com and Wesabe.com.

A Journal of Consumer Research study shows that budgeting annually is better than doing it monthly. That's because there are expenses that pop up over the course of a year that you can't account for on a monthly budget. Data shows that people are far more accurate when they budget annually vs. monthly.

Clark doesn't usually carry any debt, but he still uses budgeting tools to see what happened with his money over the course of a year. Christa, meanwhile, likes to track her finances using a spiral notebook and some online monitoring. Others like to go back to basics using the envelope method. There's no one right answer, but you have to find what works best for you. Do you have a system? Are you doing anything at all to monitor your money? Give it a try.

People are always looking for good web-based budget tools so they can get control of their spending. Clark hears people telling him that their money disappears as they move up the pay scale. It doesn't matter whether they make $25,000, $50,000 or $100,000 a year! Where does the money go and how can you easily keep track of it? There are a number of websites that can assist you in this task. Clark has been talking about Wesabe.com for a couple of weeks. Now Mint.com is a new one he recently discovered. You register anonymously and give Mint access to monitor all of your accounts. They use artificial intelligence software to analyze where your money goes on a daily basis. Sometimes people aren't really ready to face up to where their money is going. That's a personal choice. Clark just wants to give you the tools you need to take control of your finances. Other options include Yodlee.com and ClearCheckbook.com. All these sites say they're safe for you to use. Are they really? Clark's willing to take the chance because a greater risk is posed by uncontrolled spending.

With Christmas fast approaching, Clark wants to tell you how to manage your holiday shopping list without going over budget. But first he has a dirty little secret to reveal: Half of all holiday shopping you do when they're supposedly shopping for others is actually for you! While this isn't true of everyone, this is a very typical pattern. So be honest with yourself and come up with a holiday shopping list that includes everyone you want to shop for and yourself. How much money can you afford to spend on yourself and others for Christmas? Decide what the total dollar amount is and stick to it. That way you'll avoid that January hangover effect when the credit card bills come due. Once you have your list and the grand total, you've got to put a dollar amount down for each person. When push comes to shove, you may have to drop people off the list or reduce the dollar amount by each name—including yours—until it fits within your intended budget. Bring this list with you when you shop. Consult it when you make a purchase. If you overspend one on person, cut somewhere else. If you spend less than you anticipate on someone, you have more money left to spend on somebody else. Clark loves it every season when people come up to him in the stores and show him their lists! One last hint: You may also want to purge the plastic from your purse or wallet and try paying for holiday shopping with cash only. When there's no cash left, there can be no more purchases. Clark recently spoke to a credit counselor who sees tons of clients by March because they can't handle their holiday bills. Don't let this be you!

Sometimes it seems like young people have a huge bull's eye on their backs for the banks. People who are between the ages of 18 and 24 are being killed with bank overdraft fees. The latest stats say they're paying more than one billion dollars in overdraft fees every year. Clark recently heard from someone who has a teen that overdrew a debit account by $15 and that generated $80 in fees. As a parent, it's getting more and more difficult to teach the young about money. But it must be done. When Clark was in school, you paid for things with cash. Today there's no equivalent in a credit-crazy world. While cash is finite, plastic is infinite. A parent's most important lesson to a son or daughter should involve a pen and a check register -- showing them how to take debit transactions seriously. Banks are only too happy to approve transactions that will result in overdrawn accounts and high fees.

There's a bill in Congress that's trying to make it so that a bank must contact you for approval before they overdraw your account. The banks, predictably, are incensed about this because they may lose profit. Clark loves it when people have more info to make smart (or dumb) choices. What happened to ethics and morality in the banking world? Why do bankers get up in the morning and try to figure out how to rip off fellow Americans? If a bank approves an overdrawn transaction that generates fees, how is that moral or ethical?? It's not. The bill will probably be killed because the bankers are so strong giving dirty money to politicians. So teach your children well and you'll save them from losing money in the school of hard knocks.

There's a new development in the banking world that Clark is excited about. For years, airlines have had great success buying customer loyalty through frequent flyer programs. Now Capital One has a new program that's built on the same idea. The company offers a Rewards Money Market Account that earns 4.66 percent -- slightly lower than Capital One's normal rate of five percent. But you can get travel rewards based on how much money you have in the account and how long you keep it there. The best part is that when you redeem your points, you're not locked into one level or rate of ticket. So if you can find a super cheap travel deal, you'll get the ticket and also get to keep the points you might otherwise have "spent" on a ticket of average price. It's like being rewarded for being a good airfare shopper. This is a potential win-win situation all the way around. Look for similar loyalty programs from banks and credit unions in the future. As Clark says, they're all about the "sticky," which means they're always trying to come up with new ways to retain you as a customer.

People often contact Clark asking about good free budgeting tools online. Clark recently discovered one free site that he really likes called Wesabe.com. If you're curious about that name, it apparently derives from saber, the Spanish word for "to know." So the name is a Spanglish-ism that roughly translates to "we know." Wesabe.com offers you the opportunity to assess your finances and make sure you're on the right track. It's a community-based site, so that means you'll find users of the site helping each other. Clark wants people to know that there's no one right way to save for the future. Some people like the envelope system, while other use the pay-yourself-first method. Wesabe.com is just another tool in the toolbox that you might be able to put to work. Another site Clark likes is FinancialEngines.com, which can help you plan your retirement. It uses the Monte Carlo analysis method, and tries to prepare you to meet your financial goals even when factoring in the odds of a market crash.

There are great rates on savings popping up all over the place. While the mega-banks are reducing their interest rates on CDs and savings, a lot of newfangled banks continue to offer good rates. Now there's a new player in the game: Mortgage lenders, which through their bank subsidiaries, are now offering CD rates as high as 5.5 percent. Yet with these new opportunities come hazards. Clark advises people not to sink more than $90,000 into a CD through a mortgage lender. Sure the CDs are FDIC insured up to $100,000 and your principal is always protected. But if you put in the full amount and the mortgage lender goes bust you'll lose your interest. By only putting in $90,000 you'll have your principal and interest safeguarded if the lender fails. You can find the various mortgage lenders' great CD rates through newspaper ads or online. Visit BankRate.com for more information. Clark also thinks people should ladder their CDs, which means having several CDs of different lengths going at the same time -- six months, one year, two years and five years, for example. This allows you to have access to your money every six months to a year, plus not have to guess where interest rates are headed. When your six-month CD matures, just put that money into one of your other CDs that has a good rate. That way you'll spread your money out and reduce your risk.

It's been several years since the last "Clarkonomics" segment, but today we have another installment for you. This may again become a regular feature on the show since we're in a time of economic uncertainty. Before coming to the studio today, Clark was talking to a man about the stock market. It got him thinking about how what happens on Wall Street affects Main Street America. If you're one of those people with leveraged investments (investments you've made with borrowed money) this is not a good time. You may be getting "margin calls" from the broker who lent you the money. That's when they call you up and basically ask for more dough or they'll sell out your position.

A lot of people are hurting financially; the very rich have gotten burned by hedge funds and those who are struggling to get ahead in the housing market are getting clobbered on their mortgages. Are the rest of us also going to get squeezed soon? There are so many unknowns. But Clark has a standard piece of advice he gives people when the economy is facing tough times: Reduce the amount of debt you carry. Get your life in a position so that regardless of larger economic trends you're not feeling squeezed. Clark himself is now doing something that he hasn't done in 26 years: He's putting cash into a tax-free money market fund. He wants to build reserves because he believes that next year there'll be good opportunities to buy distress real estate.

Salaries change much more these days than they used to. Think about how yours may have fluctuated. It's three times more likely you'll have up to a 50% swing in income year-to-year than it was a generation ago. Also, the debt rate per person is way up from last generation. This doesn’t correlate. We have more financial volatility, but less of a safety net than ever before. Clark wants you to think about how this could affect you. Do you buy furniture or electronics on instant credit, cars with long term loans, or houses with no money down? Clark wants you to ask yourself: if your paycheck stopped tomorrow, what's your back up plan? How long could you handle your bills and obligations? One hour? One day? A month? A year? If the answer is "not that long", Clark says dial back on your debt, and dial up on your savings.

The internet offers users the opportunity to get thing much cheaper than at physical stores. The Wall Street Journal's Personal Journal section reported that people have begun treating cyberspace like an old-fashioned bazaar, where they haggle for lower prices. Comparison shopping websites like ShopStyle.com and Glimpse.com have always been helpful in this regard, especially if you're in the market for a good deal on clothes. You can even find out about big savings at message boards like MakeUpAlley.com and StyleForum.net, where bargain hunters will post their finds from around the web.

To bargain for lower prices online, you should e-mail the website you're interested in and tell them about a better offer you found elsewhere on the web. Often the e-tailer will give you a comparable or lower price (and maybe even throw in free shipping) to get your business. One thing from the Personal Journal article that really struck Clark was that the writer mentioned getting a pair of blue jeans online for the bargain price of just a little above $100 -- some $50 cheaper than list price. That just goes to show that Clark really lives in a different orbit than most people. He says he doesn't do triple-digit clothing; in fact, he doesn't even really do double-digit duds. Single digit? Now that's more his style!

Clark says he needs to get better about talking in "shorthand" -- using specific industry terms without fully explaining them for the average listener. He sometimes forgets that most people just aren't as familiar with these words. This is especially true on the topic of investing. One example is the term "asset allocation"-- less than one in five people knows that it means to "diversify" your funds, or, not put all your eggs into one basket. Clark wants to define these things more clearly for listeners in the future. "Bonds" are another topic not fully understood. Here's how they work: A company or organization needs money and issues some bonds. People buy the bonds, get the interest promised, and ideally, hold onto them for the life of the term in order to get the purchase price back at the end. But let's say you have a bond that promises 5% interest, and now interest rates are at 6%. The issuing company would have to discount the initial price of the bond to get people to buy them. On the other hand, if a bond is paying higher interest than the current interest rate, it's worth more, and will therefore cost more to buy. So, as interest rates go up, the value of bonds go down, and vice versa. Another misunderstood topic is Roth IRAs, which are investments that allow you to save money tax-free. But if all these terms bore and confuse you, read Clark's online investment guide. He lists what he feels are the best companies and services that can help make retirement investing much, much easier for you.

Interest rates are moving up and it means very different things to savers versus borrowers. We’ve been in a great economic environment for years, with low inflation, prices of goods getting cheaper, and exceedingly low interest rates. However inflation is looming. Prices for clothing and consumer goods we’ve been getting inexpensively from China are rising as workers demand higher wages, oil prices increase, etc. It looks like the continuous drop in price is coming to an end. In the future, variable-rate credit card rates could run higher. Home equity lines of credit are not yet affected, as the Fed controls those, and there no hints that the feds will raise interest rates. In the short term, car loan rates might step up some. For savers, the direct result is that you’ll see better deals on savings and CDs in the next 90 days.

Have you heard of prosper.com? It’s an electronic marketplace, where people can take out loans from fellow consumers. It’s an amazing idea, and from the first day it launched Clark was psyched about it. But only for borrowers. It’s a great way to borrow money at low rates. But for lenders, it’s not such a solid idea. The pitch of the site is that users will earn more money than they normally would. But there is a problem with borrowers not paying the money back. In November alone, 300,000 people went there to either borrow or lend money, according to the Orlando Sentinel. The site is growing daily. But more and more higher-risk borrowers are entering the fray. The site grades people on credit grades of A,B,C and D. people will lower credit grades are willing to pay higher rates of interest because they can’t borrow anywhere else. So, lenders are essentially buying the equivalent of a junk bond. These people really don’t expect to pay you back. If you’re considering lending money, go to the site and assess the risk of the applicants. In the end, you must consider that the person will end up stiffing you.

Money Magazine has a way for you to save $400,000! You probably didn’t know you had that much money, but you do. Money says the No. 1 thing you can do is avoid buying fancy cars. Over a lifetime, buying average cars instead of fancy cars would save you $180,000. An average car would be a Honda Accord LS as opposed to an Acura TSX, for example. And buying used will always save you more dough down the road than buying new. What else? Sending you child to a state school rather than a private school will free up an extra $160,000 for your retirement. If you’re like Clark and have three kids, that’s half a million dollars right there. The average tuition at a state school is $12,000, whereas private schools cost an average of $30,000 a year. Another idea is to suggest that your child helps pay for his or her school. That may not be possible for your child, but students do much better when they have an investment in something. The third tenet from Money is to stop taking so many vacations. That one is hard for Clark to swallow because he loves traveling. But the magazine says that if you take $1,000 a year you’d normally spend on a vacation and put it in a Roth IRA instead, you’ll have an extra $120,000 at the time of retirement. So, try those things and see how much you save!

The Federal Reserve has increased interest rates for the 15th time this year. This is great news for people who have money in savings accounts, but not so great for people who owe money. Clark has noticed that he’s paying more for goods and services. Inflation is not out of control, but it’s a bit more worrisome. That’s why the Feds raise rates. It hurts people who owe money on a home equity line of credit or HELOC. And the Feds aren’t even done yet. So, it’s possible that those rates will move into the 9 percent range. Credit card rates are moving into the 15 percent range, so it’s in your best interest to keep that debt as low as possible. Car and home loan rates haven’t shot up as much, but they may be headed up over the next 6 months. As for savers, CD rates are well into the 5 percent range and could go higher. The same is true for money market accounts. So, shop the market and you can get great rates on your savings. Your mission is to reduce the amount of outstanding variable debt that you have. That includes HELOCs and credit card. We got spoiled by several years of very low interest rates, but those days are over.

The Federal Reserve has raised interest rates for the 12th time in a row. Rates are the highest level they’ve been since late 1999. The Feds are trying to apply the brakes on the situation with our economy as inflation gets more worrisome. So, even though you may not be feeling it in your own wallet, the economy is growing at a fast clip right now. So, the Feds are going to continue to push up interest rates. Home equity lines of credit will be at 7 percent, instead of 4 like last year. For people with questionable credit, rates will be in the 9 percent range. It’s a great time to be a saver, though. There are wide gaps between the lowest interest rates and the highest ones at banks. So you can’t just be a creature of habit and put the money where you’ve always had it If you’re not Internet oriented, you can find fantastic rates from smaller banks in the Sports and Business sections of newspapers. The best rate comes from emigrantbank.com, which is offering 4 percent on savings accounts right now. The worst rates are coming from the big monster mega banks. If you have home equity line debt, though, pay it off as quickly as you can.

Americans are the first people ever who save just so we can spend. When we see a “SALE” sign we feel compelled to buy, and we end up in the poor house. But American Express has a new credit card that saves money for people as they spend. When you use the card, you get 1 percent cash back and that money is automatically put into a savings account the earns 3 percent interest. So, if you spend $100, $1 goes into savings and starts earning interest. It’s called “The One,” and it’s geared toward young people. The idea is that people who’ve grown up in a spending culture will learn the value of saving. There is a $35 annual fee, which Clark isn’t that thrilled about. But it’s a good start. Another good deal is the Costco cash rewards card from American Express. You’re given a voucher for spending in Costco, but you can also cash it if you want.

Bank of America, one of the nation’s largest banks, has come up with an incredibly creative idea and Clark wants to commend the company. Clark has often trashed BOA, so when its execs think of something smart he wants to praise them. The new program is called “Keep the Change.” When you go into a store and purchase something with your debit card, the bank will round it up to the nearest dollar and put the remainder into a savings account. In addition, the bank will add an additional five percent to that amount. So, if you make a purchase for $3.12, the bank will round it up to $4 and put the 88 cents into a savings account for you. Those 88 cents then automatically becomes 92 cents because of the 5 percent addition. Your purchases can be matched up to $250 a year, which means you would have to use your debit card about 500 times in a year. That’s not likely, but it’s a great incentive to save money regardless. People are not saving nearly enough these days, so BOA has the foresight to help customers with that.

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Now, just as the banks give, they also taketh away. The FDIC reports that banks collected $38 billion in service charges on accounts. That is more than double what it was a few years ago. If you make one late payment on a typical credit card, you’ll be charged a $39 fee. If you make two late payments, your interest rate will shoot up. Another bank move that you should be aware of is something called a “courtesy overdraft.” That happens when a bank covers a bounced check for you but then charges you massive fees for doing so. Banks want people to bounce checks so they actually use software to find out what will cause someone to bounce the most checks. The scary part is that it’s absolutely legal. But you have the ability to avoid paying these fees. Pay your bills on time and don’t buy something when you think the money is not in your account. Clark doesn’t want you to ever pay bank fees that you don’t have to.

Consumer confidence has collapsed. Many people feel uncertain and quite pessimistic about the country’s situation, based mostly on family finances and energy prices. Typically, consumer confidence trends about the same regardless of income. But, today there is a huge gap between what people of low incomes feel versus those who have high incomes. The confidence of people in houses making $50,000 a year is 123. The confidence of those making half that amount is 76. Usually, those numbers would be about the same. As a result, Wal-Mart is having a hard time getting people in its stores, while Target is doing just fine. People who don’t make as much as their neighbors are feeling the pinch of high gas prices much more. Heating homes this winter is another concern. In some areas of the country it will be 50 to 60 percent more expensive. When you hear these reports about consumer confidence, people are moving into two camps.

Have you done an inventory recently on how much money you have in your savings & checking accounts and in your brokerage accounts? A few months ago Clark talked about brokerage houses that were defaulting accounts into extra low percentage accounts. Over time, it eats you up. The average bank or credit union isn’t paying a great rate either. But if you shop the market place you can do great. Federally insured money market accounts are earning 3.75 to 3.8 percent. And one-year CD are earning 4.5 percent. Compared to recent years, that’s great. If you go for a 2.5 year CD, you’ll earn the same thing. There is no benefit to doing a long-term CD right now. The sweet spot in the market place is 1-year CDS and money market accounts. These are parking spots for savings. This isn’t investing. You can go shop rates online at bankrate.com. That’s why you don’t let your idle cash sit in a local bank with puny fees. With your brokerage statement, call up and ask for other alternatives “for sweep.” You want the money swept into a high interest rate account. If they tell you they can’t move you or you don’t qualify, can them. You work hard to make money. Make it work as hard for you as possible. Your assignment is to look at your most recent statements and see what they’re paying you.

Clark has change jars all over his house. At the end of the day, he dumps the change from his pockets into the jar. It’s a great way to save money, and it teaches his kids an invaluable lesson. The problem is that some big banks are now charging to accept change or count change. It’s just another example of the arrogance of banks out there. Some credit unions don’t charge, but they are hard to find. The good news is that Coinstar has entered alliances with four retailers that will count your change for free and give you 100 percent of it back. The only caveat is that you get a gift card in exchange to use at those retailer stores. Now, Clark is usually against gift cards. But in this deal, you’re making money. Amazon, Starbucks, Pier 1 and Hollywood Video are a few of the retailers involved. Find out more at coinstar.com.

The Federal Reserve has just released information about debt in America, and the results are staggering. Americans owe $11 trillion in debt, which is double what we owed 10 years ago. So, for an individual household, the debt burden for families is huge. The “must pays” that we’ve developed in our lives are growing exponentially. Half of all consumer debt is floating rate interest and more than one fourth of mortgage debt is floating rate interest. So, think about what you’re borrowing money for and what you’re going to have to pay back. If you have a floating rate mortgage and you’re going to stay in your house for any length of time, refinancing to a fixed rate loan is still a great idea.

Did you know that there are tens of billions of unclaimed dollars floating around the United States? This money ends up in the hands of your state when it is not claimed by its rightful owner or beneficiary. But thanks to the Sarbanes-Oxley corporate reporting law, also known as SOX, more people have been able to claim what is rightfully theirs. The law basically requires companies to be honest with their books and more forthcoming about money owed to customers. Many companies were hiding money that they should have been giving back to customers. All you have to do is go to missingmoney.com or unclaimed.org. Clark visited the site and found money for himself.

Consumer Reports just published a survey entitled the “Battle of the Brands” in its August issue. In most categories, store brands were rated just as good or better than brand names. Not to mention the fact that you’ll cut your costs by at least a quarter to a third if you buy store brands. So, who makes the store brands? They’re made by the national manufacturers. They just don’t have the fancy names on them. In just one area - the facial tissue category - the store brand did not win. Puff’s was the winner. But after that, it was store brands. Safeway’s private label, Publix’s private label and several others came in second to Kirkland in many of those. In the plastic food bag category, it was a tie between Great Value and Ziploc. Great Value, which is Wal-Mart’s store brand, costs much less than Ziploc but obviously is just as good. Sometimes the store brands won’t measure up. But if you find a store brand that works, stay with it. The stores prefer that you buy the store brand, too, because they make more money off of it. And, stores will usually give you your money back if you aren’t satisfied with their store brand. It’s just smart shopping.

Clark saw a story recently entitled, “Why it’s Good To Be Rich.” Financial writer Jonathan Clements wrote the article and he lists 25 reasons why it’s so great to be rich. What was interesting about the article is that just about anyone can do the 25 things if they just put their minds to it. The No. 1 thing to do is pay off our credit cards each month. But people just don’t do that. Roughly 2 out of 3 people have an outstanding balance on credit cards, and they’re throwing money away as a result. The second reason is that you can send your kids to school without taking out student loans. The third reason is you can trim insurance costs by raising deductibles on policies. Rich people can also take advantage of tax-favored accounts such as Roth IRAs and 529 plans. The list goes on and on. But anyone can do these things and it will lead to wealth. It’s not just rich people who can make these things happen.

How would you like to pay for things with your cell phone? You wouldn’t have to swipe your card over and over again or even carry it with you. All you would have to do is hand over the phone and the item is charged to your cell phone account. It’s called a “Quick Pay” system and it’s already happening in Japan. It will probably create a whole new era of questions on Clark’s show, but it will make paying for things much more convenient. American Express is launching its version to be called “Express Pay.” The transactions will happen in the blink of an eye, and the company will send you this new card if you just call and ask them. Master Card’s version is called the “Pay Pass.” Because things will be much easier to buy, you should be careful.

A survey conducted by Harris found that adults and, therefore, kids need to learn a lot more about money and finances. Consumers are being asked to take more responsibility for their financial futures as a result of what’s going on with the Social Security system. For example, more than half of the adults surveyed didn’t know that it’s not a good idea to stash money under their mattresses. In short, if you’re just holding money at home and are earning no interest, it will be worth only a fraction of what it was 10 years before because of inflation. Secondly, Americans are paying close attention to the Federal Reserve and raising interest rates, but they don’t necessarily understand it. One-third of adults could not explain the relationship between falling interest rates and businesses it would affect. High schoolers did much worse than adults in the survey. Only a half of the students could explain a relationship between stocks and the economy. Less than half knew what a “budget deficit” was. Clark thinks we don’t know about all of this because we find it pretty dull. He also thinks that people in the financial industry want us to remain in the dark. It creates a need for us to hire them. It’s important to learn about your money and pass that information on to your kids.

Inflation is out of control! It’s the first time since the last millennium that inflation has been a real problem. And it’s affecting us when we shop and buy services these days. So, unless you’re getting healthy raises at work, your dollar is buying you less. That’s why it’s time to get out of variable rate loans or floating rate mortgages. It will make a huge difference in your budget. LIBOR loans are especially dangerous right now. If you’re in a floating rate credit card, pay down the debt as soon as you can because the rates are going up. With savings, you want to “go long” as they say. Take your money and divide it into piles – short-term CDs, long-term CDS and longer term accounts. Make your money work for you by moving it if you need to. You can see the best deals in the country at bankrate.com. The banks with the best current rates are emigrant.com and ingdirect.com. Check them out!

Clark saw a story recently entitled, “Why it’s Good To Be Rich.” Financial writer Jonathan Clements wrote the article and he lists 25 reasons why it’s so great to be rich. What was interesting about the article is that just about anyone can do the 25 things if they just put their minds to it. The No. 1 thing to do is pay off our credit cards each month. But people just don’t do that. Roughly 2 out of 3 people have an outstanding balance on credit cards, and they’re throwing money away as a result. The second reason is that you can send your kids to school without taking out student loans. The third reason is you can trim insurance costs by raising deductibles on policies. Rich people can also take advantage of tax-favored accounts such as Roth IRAs and 529 plans. The list goes on and on. But anyone can do these things and it will lead to wealth. It’s not just rich people who can make these things happen.

In all the debate over social security, it’s come to light that the American savings rate is the lowest in the developed world. Americans save between negative 1 percent and positive 1 percent of all the money they make. That’s miniscule. You will have no comfort in retirement unless you save. The good news is that there are incentives for you to save that you may not know about. For example, if you’re married and you make up to $50,000 a year, you are eligible for a federal tax credit to help you save. If you make $30,000, you are eligible for a 50 percent tax credit. If you’re single and you make up to $25,000, the Feds will pay money into your retirement account. It’s called the “Saver’s Credit,” and it’s been around for four years. In the first three, almost no one took advantage of it. That’s probably because people still don’t know about it. But it works will all kinds of retirement accounts, including 401k or 403b. It doesn’t work for dependents, full-time students, or people who make more than those amounts. Why not take free money from the government? H&R Block has a good explanation of this in its “Tax 101” section, and bankrate.com has a good explanation. You get the saver’s credit when you do your return for the previous year.

Clark saw a story recently about “The Latte Factor.” Have you heard of it? Basically, it means the expensive, luxury items consumers are willing to pay too much for every day. It can be a latte, cigarettes or bottled waters that claim to have special minerals or powers in them. Saving just $5 a day by not buying these items can make a huge difference in your wallet. At the end of a year, for example, you’ll have $1,885 more in your pocket. At the end of 5 years, you’ll have almost $12,000. And after 15 years, you’ll have $62,000. So, think of the one thing you could give up each day. For most of us there is something. Kevin, one of Clark’s producers, used to spend more than $6 a day on Starbucks fancy coffee drinks. He has reduced it to a drink cup every three or four weeks and has put that money he would have spent into a savings account. He now has more than $1,000. So, it really works!

About 10 years ago, a Canadian man wrote a book called “The Wealthy Barber.” It was about a fellow who listened to many stories while he cut people’s hair. He heard stories about basic tips on making money and how to become wealthy, and he decided to heed their advice. It has sold 2 million copies so far, yet it’s so simple and basic. The main idea of the book is that people should save 10 percent of their income. The rest of the book is used to convince people why they need to do that. The concept is simple. So, why aren’t people doing it? Well, some people are saving money, but the majority of Americans are “negative net savers.” Overall, Americans are saving about zero percent. What are the top ten reasons people give for not saving money? They include “My brain isn’t into planning,” “Money math is too confusing,” and “I have no interest in financial stuff.” These are just excuses. It’s all about your attitude. It has nothing to do with how much you earn. You can save no matter how much you make.

You’ve probably heard Clark talk about the problems people are having with debt these days. Going back to the ‘80s, debt issues came up from time to time. But it wasn’t something Clark heard about a lot. Even when the country was in a recession about 0 or 12 years ago, he didn’t that many questions. But the volume of calls has intensified greatly over the past few years. The Christian Science Monitor recently reported on the topic, calling it, “King Kong Debt Meets Middle Class Life.” The average credit card debt is more than three times what it was in the early ‘90s. That is huge. If you go back just one generation, most people paid their credit card bills in full every month. Today, about 35 percent pay their cards in full and the rest are carrying balances. In addition, people are saving much less than they did a generation ago. The average a generation ago was about eight percent. Today, we’re saving less than two percent. On top of all that, bankruptcy filings have also ballooned. About 1.6 million families are filing for bankruptcy today, compared to 300,000 a generation ago. And, this has happened over time. It’s not like we just woke up one day and were in much more debt. So, Clark wants you to consider how you use and spend money. Cutting back on the plastics is the first order of business. You must stop using credit cards entirely if you want to get a handle on your debt.

New statistics from the Commerce Department show that the typical American family is saving just a little more than a penny on each dollar earned. This worries Clark very much because it simply will not help you. Of course, there are some people who are saving huge amounts of money. But there are many more who are not saving anything or are involved in “negative net saving.” That means that people spend more money than they make. So, overall, we are pitiful at saving money in the United States. Good and bad habits are formed one step at a time, and that’s how you change them, as well. Saving a dime on every dollar is a good goal to have. As the years pass, you’ll be able to bump that number up. Last year, Clark saved 15 percent of his before tax pay and two-thirds of his after tax pay. When you retire, you will have to live on half of what you make. You must keep that in mind.

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In Clark’s most recent poll, he wanted to know what you do in your leisure time. When asked how much time you spend in front of the TV, almost half said they only watch one to two hours a day. That is far less than the national average, so Clark’s listeners are a bit different. And, in terms of how you end up spending your leisure time, about 27 percent - the largest amount - said they played or worked on the computer.