By Chris Buchheit on March 16, 2011

One facet of Western Culture that permeates the most in our society is the need for instant gratification. What we can’t wait for, we want to have now. Fortunately, when we just gotta have what we just can’t afford, we can use money that just doesn’t exist – credit.

Credit is by no means a new concept. People have been surely handing out IOUs since the idea of “value” has existed. However, the idea of charging interest with credit is a more modern creation. Banks and credit card companies let consumers spend “money” with the idea that it’ll be paid back – with interest. This interest, coupled with financial irresponsibility, is what leads to crippling credit card debt.

Credit card debt has had its fair share of the “economic depression” spotlight as well, being a direct cause of the Great Depression. When too much money is spent on credit, it devalues the currency because people are not being paid for the goods and services immediately. Most recently, our banks gave out loans to families regardless of their fiscal responsibility and as a result, many loans went unpaid. Because of this situation, banks ended up losing vast sums of money, virtually cutting off the rest of the country from credit, including new, small businesses. These businesses were forced to make cuts due to the lack of cash inflow. So indirectly, credit card debt and poor financial decisions made by bankers and consumers led to our current financial crunch.

The moral of the story? Money that doesn’t exist isn’t exactly fit for spending!

Today, the average American family has $8,000 in credit card debt (http://www.daveramsey.com/the_truth_about/credit_card_debt_3478.html.cfm), all of which is completely superfluous. In this day and age during an economic recession, one of the most responsible thing families can do is to budget properly and eliminate credit card debt. Keep away from the credit cards – they are a sure-fire method to increase your debt. If you’re already stuck in debt, this especially applies to you.

Even in economic recessions families can still enjoy entertainment items, as long as the expenditure is properly accounted for and budgeted. Families being the basic economic unit, eliminating credit card debt and taking overall care of your finances will, on an aggregate level decrease the credit crunch, which will free up businesses, who can then create more jobs. By not resorting to credit and eliminating credit card debt with proper budgets, you are not only creating a more financially-stable unit, you’re also doing your part in recovering our economy.