Buy Less, Save More, Calm Down

With the onslaught of discouraging economic news, many Americans are struggling to figure out how to keep their heads above water and come out on top.

Home values are declining, the stock market is volatile, returns on "safe" investments barely beat inflation, and employers are cutting jobs by the thousands. Lenders have tightened standards in the risk-averse market, making it much harder to take on new debt -- or even hang onto the existing level of home-equity lines.

The average American household's net worth fell by just over $15,000 during the first three months of the year due to plunging home values and a turbulent stock market, according to data released by the Federal Reserve last week. The cumulative effect was a $1.7 trillion decline in wealth, which doesn't factor in further economic woes in the second quarter. ...