Credit Card Debt: Avoiding Temptation

Once a shopper always a shopper, but converting from using credit cards to paying in cash can be challenging. Understanding your motivations for spending can help prevent busting your budget when shopping.

Credit Card Abuse: Separating "Want" from "Need"

Popular culture bombards us with the message that we "need" handbags that cost as much as a mortgage payment, and must drive cars that cost as much as a home used to. You "have" to buy this stuff; it signifies success and lets the neighbors and everyone else know you've arrived. Indeed you have; welcome to the world of credit card debt!

• Debt Management and Your Monthly Budget: Write down your net monthly income, and then make a list of your fixed monthly expenses. These include housing, utilities, insurance, healthcare, groceries and household maintenance, debt payments, transportation and saving for emergencies and your future. Subtract fixed expenses from your take home pay, and anything that's left is discretionary; this means you can spend it on yourself, buy gifts, or enjoy recreational activities.


• Shopping Is Expensive Therapy You like buying gifts for family, friends, and coworkers. You "deserve" a new pair of designer shoes after a bad day at work. Your Yorkshire terrier "has" to visit the upscale dog groomer twice a month. All of these expenses can be justified if you can pay cash for them, but if you're whipping out the plastic (and carrying balances every month) every time you make a discretionary purchase, it's time to face facts: escalating credit card debt leads to trouble.


• Understand Your Spending Compulsion The question to answer when considering compulsive shopping is "why." Giving gifts to earn approval or keeping up unrealistic images of wealth and style at the expense of your financial security isn't worth it--and ultimately, it won't work. If you have to cut back on spending for gifts, friends and family get it; they're likely doing the same!


• Don't Carry Credit cards when Shopping: It's a good idea to have a credit card on hand for emergencies, but emergencies don't include buying a new big screen TV just because it's on sale. If you're prone to temptation, carry only cash or a debit card when shopping


• Debt Management Help Is Available: Committing to eliminate credit card debt is one thing, abut doing it can be difficult. If you're having problems keeping a cash budget, you can get help from non-profit credit counseling agencies. Self-help groups for debtors can also assist in keeping you on track toward debt-free living, while helping you understand and address the root causes of overspending.

Living without financial worry is a major benefit of avoiding credit card debt; you can use the money once used for paying bills for travel, hobbies, and (although it may seem a novel concept) savings. Having money in the bank is a great alternative to losing sleep over credit card debt

Source:
Suze Orman: Managing Debt--A Financially Free Holiday

About the Author:
Karen Lawson started writing stories about birds and surfing at an early age. For more than ten years, she enjoyed a productive corporate career in mortgage banking before moving to Reno, Nevada in 1997. Karen earned BA and MA degrees in English (specializing in writing) at the University of Nevada. Significant areas of research and writing include truth and ethics in creative nonfiction, medical humanities, and the symbolism and lore of birds in American literature and culture. Karen has taught English at a community college, is writing a collection of poetry, and enjoys birdwatching and walking her basset hounds.