CHICAGO — Americans have been forced to take a crash course in money management, and class is still in session.
Falling home prices and rampant foreclosures. Flat wages and high unemployment. Volatile stocks and no safe refuge for savings. An unforgiving recession and the threat of a sequel.
One economic challenge after another has tested the financial strength of almost everyone in recent years, and more hurdles loom ahead as signs of an economic slowdown increase.
Although results are mixed, many families have shown they are up to the task. By necessity, they've become more disciplined about their finances. They're saving more, paying down debt, and charging less on their credit cards.
For the fourth straight year, on average, individuals are saving more than 5 percent of their after-tax income. Back in 2007, they were setting aside less than half that — and some nothing at all.
Such changes in behavior may not be permanent. But they're a noteworthy development after years when so many overspent, overborrowed, and were neglectful, if not oblivious, about basic finances.
"Each succeeding generation since the Depression has gotten further and further away from financial discipline," says financial planner Mark Balasa. "Some [people] are getting religion now — having it forced upon them."
It won't be easy.
Couples, families, and single people all face disheartening trends. Among them:
-Median household income has fallen for three straight years, declining 6.4 percent from $52,823 in 2007 to $49,445 in 2010.
-The portion of households living in poverty grew to 15.1 percent last year, encompassing a record 46.2 million people. For a family of four, that meant income of less than $22,314.
-More families are "doubling up" because of the economy. The number of combined households rose to 21.8 million this spring, up from 19.7 million in 2007. In particular, more adult children have moved back in with their parents or never left home.
-The faltering housing market is squeezing homeowners. On average they have just 38.6 percent equity in their homes, down from 61 percent a decade ago. Home prices aren't expected to make a healthy recovery until 2015 at the earliest, according to Celia Chen, a housing economist at Moody's Analytics.
Doing the right things financially will help. But it's no assurance of success, as many have found.
Stacy and Nate Hayon, of Sheboygan, Wis., both 35, have embraced frugality and good financial habits since shortly before the recession began in 2007.
Before then, if they saw something they wanted, they simply bought it.
But with $8,800 in debt, no savings, and no real plan, their uneasiness was growing. They stopped using credit cards and have been playing it straight ever since.
They managed to escape the worst of the economic travails until August, when Mr. Hayon was laid off from the job he'd had for 10 years, selling log homes.
Fortunately, they've been sticking to a budget for the last few years. The credit-card debt is gone. But with two kids and a mortgage on their $135,000 three-bedroom house, they know they need to keep being money-smart.
"We're not alone," Ms. Hayon said. "We'll make it."