If you’re like most Americans you have at least one credit card…and you’re likely using it too much.
Over spending doesn’t have to look like borderline bankruptcy, or the old clichÃ© “robbing Peter to pay Paulâ€. Today, especially as the economy wobbles on the line of recovery, many people just consistently spend a little more than they make, and use credit cards to cover the “nicetiesâ€ of life they “deserveâ€. Come on, you’ve probably given yourself this speech, “I have [insert high level] degree or [insert high profile] job, I should have this, or I’m supposed to do thatâ€. The issue is many people’s “I shouldsâ€ don’t match up with their “I can affords…â€
So what’s the problem with cushioning your lifestyle with credit cards? Nothing, if you’re happy with your current station, don’t think you’ll ever lose your job or retire, and don’t mind living in debt. But if you disagree with any of those aforementioned statements it’s time to make a change. Using credit cards robs you of something most folk are happy to give away: the reality of their financial situation. The truth is simple; anything you buy on credit you can’t afford. And it gets worse. Putting items on credit is a further disservice because it takes away your ability to save. You can’t build a business, a nest egg or a fund for college if you’re overspending and owe more than you make each month. As long as you’re in debt, everything you make belongs to someone else.
This week, I want you to ask yourself whether you’re willing to fight for your freedom. This battle royale isn’t with the man, the media or even lenders. It’s with you. Are you strong enough to beat down the part of yourself that demands instant gratification at malls, brunches and beauty shops? Are you able to tell your ego that you are not less of a person because you can’t afford the trip you “deserveâ€? Are you man/woman enough to tell your future self that you are finally ready to take the steps to make your “unattainableâ€ financial dream a reality?
If your answer is yes to any of those questions there’s an easy way to start: carry cash. Leave the cards at home and commit to spending the money you literally have in hand today. It will change your tomorrow. Will it be hard? Yes. But accomplishing your big picture goal is worth it.
Here are four tips to help you cash out this week:
- Create a budget. This may actually be the most vulgar b-word of the times. Luckily, a budget, which typically consists of itemizing your anticipated expenses for a time period, doesn’t have to be painful. Tip: Add a cushion for expenditures that you’re likely to treat yourself to keep your balance on the budget wagon.
- Cash and carry. Bring a certain amount of cash with you daily and only spend that. You can keep an emergency stash– or gift generic gift card with a specific amount–Â to have in case of the unlikely emergency (everyone’s favorite scapegoat for carrying a card).
- Leave the credit cards at home. It’s the best way to control your ability to impulse buy. Place a picture of the goal that spending habit is being nixed for in wallet’s card slot (ex. an office, computer, upgraded residence, 0 balance on student loans).
- Don’t be a drop out. If your child failed a test, or was having trouble in one class, you wouldn’t tell them to quit school. Apply the same principal here. If you mess up, start over the next day. Your commitment will transform your life.