It’s easy to tell someone “don’t use credit cards”. But in reality, the convenience of credit is too great for many Americans to resist.

Think about it. You’ll get a pre-approved application in the mail saying you’re qualified for 10K at 0% interest through January 2200 just by picking up the phone. It’s like watching the Home Shopping Network. Never has an industry made the barriers to entry as incredibly low as they have for the purpose of acquiring credit.

And this is exactly what makes it as dangerous as playing at the Las Vegas tables. Like gambling, the need for credit can be like an addiction. Once hooked, it is almost impossible to break free.

The US debt is now approaching over 46 TRILLION dollars. Yes, that’s right, TRILLIONS. We are a nation of debt. Our government is heavily in debt. Consumers are in debt. Now it has become as much a way of life as apple pie.

This unsustainable level of indebtedness will eventually cause an economic shock to our society. We will start to see higher levels of home mortgage defaults, we will see more bankruptcies, and credit card charge-offs will skyrocket. I wouldn’t want to own financial services stocks when this freight train arrives. It will also eventually manifest as an adverse impact on our ability as consumers to spend. Keep hearing about how big the economy is and how strong job growth is. Let me break down how much of a lie this is.

If you’ve ever been looking for a job recently, take a look at some of the postings on the market. They are pathetic. The level of compensation for middle management type positions and even IT positions has gone waaay down since the early 2000s. Offshoring has caused a suppression of wages in this country meaning you won’t be paid as much as you used to for doing the same job.

OFFSHORING HAS ENABLED THE US TO EXPORT LABOR INFLATION ABROAD.

So now you’re waiting for an appreciation in your income to pay off all the fringe benefits you’ve put on credit over the years. When that extra compensation doesn’t happen, you start bleeding red. So try to cut back, which means cutting back on consumer spending, which is exactly what was helping to prop up our economy in the first place!

So what do you need to do to combat this country’s strategy of exporting jobs, lowering wages, and selling credit like there’s no tomorrow?

First, play with debt like you do with cholesterol. There is good debt (hard assets like real estate, mutual funds, gold, rental properties) and bad debt (unsecured credit like credit cards). Always build a healthy portfolio of good debt. Never, ever run up credit card debt.

Second, learn to resist the urge to always buy things when you don’t have the money. I realize this can be a monumentally difficult thing to do, but your old car can go a thousand more miles and you don’t necessarily need that new plasma TV just yet, your old TV will work just fine.

Take it easy on your spending during the holiday season. Just get a few quality gifts instead of buying 10 different things for each person! The holidays are when most people dip into their credit, it’s a guilt/reward thing. You feel guilty for not rewarding your children with nice things.

Keep an eye on utility bills and get in the habit of finding ways to save. Don’t leave all the lights on in the house for God’s sake! Wear sweaters or an extra blanket during the winter and try to keep the thermostat below 70. Believe me, months and months of this can mean a lot of savings.

Eat at home more often. I know cooking is a thankless job, but ask everyone to pitch in and make it a family affair.

Try to capture a healthy lifestyle. Cigarettes and alcohol are heavily taxed by the government, which is why they are expensive products.

Pay your bills on time. Don’t let those late fees kill you. Use Billpay features that are automatically deducted from your checking account so you don’t forget to pay.

Save a monthly stipend in a savings account. You will be extremely grateful to have this safety net in case you experience a sudden financial change (job loss, death in the family).

These are just a few simple ideas to get you started. There are literally hundreds of other ways to become more efficient in the way you manage your finances. Remember, some of this requires a lot of discipline, an abrupt change from old habits, but the potential rewards in terms of “peace of mind” will be invaluable.