Is your familys financial well-being and net worth relying too much on the value of your house? Are you feeling wealthier because the value of your home has increased significantly in the last few years or decade? Have you taken out a home equity loan recently? If your homes value declined by 20% or 30%, would it wipe out your equity and have you scrambling to find enough just to keep your home?

Consider the following scenario. If your house is valued at $300,000.00, and you currently have about $50,000 equity, and if the value dropped by 17%, it would entirely wipe out your equity. If, over the course of a year or two, the value dropped by 30 or 40%, (placing the value between $210,000 and $180,000) you could expect some visits from the loan company requiring you to infuse your loan account with money because the value of the house no longer covers the amount of your loan!

How much debt do you have? At the end of the first quarter of 2005, the total interest-bearing debts in the U.S. had piled up to $37.3 TRILLION! Real estate is now the largest single debt category at $10.7 trillion.

If you have been using your homes equity to support your familys well-being, you are not alone. Millions of Americans are in the same situations, pushing the entire housing market onto a dangerous cliff that could crumble the entire economy. Millions have used their home equity line of credit to buy RVs, boats, furniture, or just everyday things, either because they lost some income, needed to keep up with the Joneses or just thought they deserved it because of their new found wealth. Others are using extra money to buy a second home, or a vacation home or moving into a house twice the size and value they (or the bank) would normally consider. Plus, U.S. households have the biggest household budget deficit in history at $531 billion. We are spending $531 billion more then we earn each year!

Things to do now:

Consider how much your family values your house as a home. If your house is a lot more than an investment, dont sell, but you consider paying off more of your loan to create more equity value in your home.

Sell your vacation property, second homes, and investment property. Especially if the property is loaded with debt. You dont want the bank seizing your lake home, and then aggressively pursuing you because there was no value left in the lake home to cover the $100,000 still owed.

Conduct a family meeting to consider if you are living above your means. And consider the size and amount of amenities of your house as a factor of living within your means. It often times becomes difficult to cut back, because we want our neighbors, friends and family to believe we are financially well, and if get rid of the new vehicles, the satellite TV, the flat screen television, the kids cell phones, and all our other money devouring gadgets, our appearance may shrink in other peoples views. But if you are spending less, accumulating savings, and are growing your homes equity and your familys net worth, you are increasing your financial well-being and not just the appearance of being well-off.

Cut back on your expenses and start accumulating a savings account. Pay a little bit extra on every house payment. Set up an emergency fund. Start saving more and spending less! Start living within your means, accumulate savings, and protect your family from the real estate price bust that is going to occur. Dont be fooled. Be ready.

If you need help learning how to save more and spend less, and how you can begin saving your way to success, please visit http://www.savingyourwaytosuccess.com.

Justin P. Ertelt is the author of Saving Your Way to Success, and owner of http://www.savingyourwaytosuccess.com, helping others achieve financial success. Justin can be reached at justin@savingyourwaytosuccess.com. To learn more visit http://www.savingyourwaytosuccess.com.