Tapped out consumers might become better savers

American consumers are finally going on a spending diet and it's about time. The New York Times reported today that even "affluent" Americans cut spending in December. I don't think most consumers cut spending happily. I believe most were forced into making that decision as they could no longer tap equity in their homes.

While it's a bad thing for American retailers, hopefully consumers have learned their lesson and develop new spending habits that meet their actual earnings level. Consumers should use this time of soul searching and less spending to start paying themselves first and build an emergency nest egg, so they can break the habit of using credit cards to get themselves out of any financial problem.

If you're ready to get started, write yourself a check each pay day. Even if all you can afford is $10 a pay period, put that into a savings account and don't touch it unless a true emergency crops up. That true emergency should not be a great buy on a pair of shoes or dress you want. Ultimately the emergency fund should total at least three months of your cash needs. In this case I'm talking about housing, health care and food costs -- the necessities of life. By setting up this emergency fund you won't need to use a credit card every time something unexpected happens. Instead of using plastic tap that emergency fund.

Lita Epstein has written more than 20 books including the "Complete Idiot's Guide to Improving Your Credit Score."