LIFESTYLE

Listen Up, Congress. It's Time to Balance the Budget. Do I Need to Get You on the Phone With My Financial Planner?

Close up picture of credit card puted on dollars

Close up picture of credit card puted on dollars

The 111th Congress allowed the federal government to rack up more new debt—$3.22 trillion—during its tenure than the first 100 Congresses combined, according to figures published by the U.S. Treasury. Not bueno

But Congress, I empathize with you. I know how easy it is to let your finances spiral out of control: At one point in my life, I had more than $10,000 in credit card debt. And I know you've had wars to fight, a recession to deal with and banks to bail out.

But you're smart people. You can find your way out of this. Many average Americans have. In fact, compared with the summer of 2008, when consumer debt was at a high, there is now 15 percent less outstanding credit debt, according to the Federal Reserve Bank of New York. At the same time, Americans set aside 5.3 percent of their disposable income in December, nearly triple the rate they did between 2007 and 2009, according to the Commerce Department.

I'm happy to say that I'm one of these Americans who managed to get out of debt. How did I and many others do this? We stopped borrowing so much and started spending less. Hmmm, ladies and gents of the 112th Congress, perhaps you can learn something from us? We've got a few tips for you.

SET A BUDGET AND STICK TO IT. It sounds easier than it is. Trust me, I know. I used to spend, spend, spend without a care in the world. I didn't know what my assets were. I didn't know what my fixed costs were each month. Then one month, I couldn't pay my rent. That's when I realized I needed to change my spending habits. I hired a financial planner and she put me on a budget. So Congress, step one is to come up with a budget that you will actually stick to. Perhaps you should seriously consider that Balanced Budget Amendment to the Constitution that would prevent expenditures from exceeding revenues. Right now, 49 of the 50 states have laws requiring their state budgets to be balanced. Why can't you too?

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CUT SPENDING. I used to buy a new dress every month. They usually were black. How many black dresses does a girl need? It took me a while to realize that I had a shopping addiction. I was able to kick it. So have many others. About three-quarters of Americans surveyed by America's Research Group said they were shopping less now than a few years ago.

Congress, you are shopaholics. Federal spending represented 19.6 percent of GDP in 2007. In 2010, it climbed 26.6 percent to $3.46 trillion, or 23.8 percent of GDP. Find ways to cut your spending. Maybe even consider taking pay cuts. And for every new spending item you approve, cut an equal or greater amount elsewhere in your budget.

SELL OFF THE EXTRA. When money got really tight, I sold some jewelry and clothing I had not used in years. Congress, you too can do this. Well, you don't have to sell your jewels, but what about properties you don't use? The Office of Management Budget has identified tens of thousands of federal properties throughout the nation that are seldom or ever used. An amendment has been proposed to the small business bill (S.493) that would require the federal government to sell or demolish these properties. It would save billions of dollars. Can we say no-brainer?

Nancy Trejos is a staff writer for The Washington Post and author of the personal finance book "Hot Broke Messes: How to Have Your Latte and Drink it Too." Her website is www.nancytrejos.com and twitter name is nancytrejos.

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