by Sarah Barendse

Created on: August 02, 2009   Last Updated: August 03, 2009

As much as it pains me to say this, I fully believe that this recession we are currently in, needed to happen. As Americans we have become spoiled, complacent, and dependant on our credit and credit cards as a way of life. With the economy falling the way that it has, it has forced Americans to budget, cut back, and save where they can - anywhere they can.

Lay offs, bankruptcies, foreclosures, they are all incredibly hard to swallow and difficult to work through. People who never considered personal finance and budgeting are now slammed head first in to a crash accounting class only this time the grades are not A through F, the grade is based on survival.

In a world where Starbucks ruled, hair cost $200 per salon visit, dinner for two could and often did easily exceed $200, brown bag lunch was unheard of, and you had no problem keeping up appearances with the Joneses; let's face it, we were living a fabulous existence!

Your job was secure, credit was thrown at us in every direction, stores, major credit cards, mortgage lenders, you couldn't open your mail box without being accosted by a pile of envelopes tumbling pre-approved offers out at you. Unfortunately, life on extended credit is not sustainable, especially when everyone is doing it.

Mortgage lenders extended people housing loans way above their means in many cases and at exorbitant interest rates. In this arena I only hold the lenders partially responsible. Yes, they stretched the truth and the numbers in order to make you these offers, but you, 'you' were the one who accepted!

What could you have been thinking? I know what you were thinking. You were blinded by the shiny object. Woooo pretty new shiny house - your dream house, and here it was, a carrot dangled in front of your face. How could you say no?

Yes, you read the paper work and it was more than you wanted to pay, but had you taken a moment to do the math and realize that the payment you could barely make in the first place was only going to go up from there. You were irresponsible in accepting. And now you are paying for it.

And to make it better, right when you actually need credit, many people just to survive on while they are unemployed to bridge that gap where unemployment payments leave you short until you find another job, what are credit card companies doing? Cutting or closing your credit lines! Normally the advice has always been to pay down your credit cards so that you are not incurring fees monthly, and to do it as fast as you can. But in a recession, I advise you please do not do this.

Pay only your minimum and stash away the rest of the cash you were going to send in. Why? Because they are likely once you pay off the card to simply close it and minimize their risk. They are playing games with your life. Why should you be so forthcoming and honest with them?

The rules have changed. Save save save. Do the best that you can, and from this whole recession learn that budgeting is important and that material things are not necessarily necessary for happiness. Keep your chin up, your attitude positive and realize that things, though incredibly different than what we are all used to, in the end, 'will be ok'! As for aftermath? - Life is what you choose to make of it. To quote Susie Ormond, "Focus on what you have, not what you had."

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