Using Credit Cards?

Do you find yourself stuck in a vicious cycle of debt and spending? Do you start the month with paying your debts and end up living off your credit card as the month’s end approaches? Is the word “savings” nothing but a wistful dream for you? If yes, then you need to stop using your credit card right away!

Sound extreme? Absolutely! Sound overwhelming? Correct again!

Cutting yourself off from using your credit card in one fell swoop may be difficult for some to embrace, but the root of the difficulty may not actually be the credit card itself but rather what the credit card represents for you. If you are dependent on a credit card, then take a look in other areas of your life wherein you are dependent upon someone else that perhaps isn’t a healthy dependency. So before cutting up the credit card, take a few minutes to try to understand your relationship with the card. We all love the notion of what a little “shop therapy” can do for us during a difficult transition, but how much is too much? Beginning to walk down this path of discovery can get pretty deep, really quickly. But it is something all of us must be doing to ensure our financial health is in balance. And what does a healthy relationship with your credit card look like? What would you like it to be?

As you begin to better understand this perspective, we also need to recognize that while a credit card can be extremely useful in case of a financial emergency, getting into the habit of using it regularly can spell financial disaster for you! So to help you better understand what it means to “live in balance” with your credit card, here are some tips to help you break a vicious debt cycle.

• Make a table of your income and expenses in the beginning of the month. Keep your household budget in mind and make a provision for savings as well. Use the extra cash for contingencies and impulse purchases.
• Take out cash on a weekly basis and make sure you always have enough in your pocket to meet your daily expenses.
• According to consumer psychology experts, holding cash makes people feel more powerful and in control. Use this psychological fact to your advantage. Hold and feel a $100 bill for a few minutes, then put it in your wallet. Whenever you feel like making an extravagant purchase, think about how you felt when you held the $100 bill in your hand.
• Make a list of all your weak points and temptations—for instance, things like buying shoes or handbags, eating out every second day, spending excessively on new clothes or the latest gadgets, etc. Becoming aware of your temptations is the first step in learning to control them.

• Reward yourself with something you have really wanted for a long time if you succeed in resisting temptation for a month! But remember to pay in cash!
• Get your spouse, partner or a close friend to work with you. Ask them to hold you accountable every time you swipe your card. Sometimes nothing works better than a friendly reminder!

• Make sure you are setting realistic spending goals for yourself.
• If you need to use your card, then when you get home pay the amount to the credit card company immediately—don’t wait for the bill.
• And most of all … ask for help!

The key to getting out of the debt-spending cycle is spending only as much as you can afford. Using credit cards makes us forget our spending limit, as the money doesn’t change hands until we’ve already spent it. It is a matter of simple consumer psychology that when you pay by cash you actually feel the pinch of its loss. So try to use less plastic and more cash to improve living in balance with your financial health. Walking this credit card high-wire is one of the most difficult ones people have mastering. Good Luck and Happy Saving!

Until next time, embrace your inner wisdom.

Namaste,
Karen