Slipping into debt is always easier than getting out of it. Here are ways to avoid getting in over your head and ultimately help you accomplish bigger financial goals:
1. Make a list of short-term and long-term goals. In order to get your credit in line and to effectively manage it, you must first determine your financial goals. Make a list of goals you would like to achieve in the short term, like planning a family vacation, paying off a credit card or buying a new TV. Next make a list of long-term goals, like saving for your child’s college education, buying a home or retiring early. Post these goals on your refrigerator, in your wallet and at your desk. Every time you get the urge to splurge, look at your list. Use the money you would spend toward crossing off a short-term goal or helping reach a long-term one.
2. Stick to your original shopping list. Many retailers stock checkout lanes with goodies that catch your and your family’s attention while you wait, like candy, magazines, and toys. While these extras seem inexpensive, they can certainly add up. Remind yourself of the reasons for your shopping trip and stick to them.
3. Steer clear of impulse buying. If something appeals to you, wait 24 hours before you purchase it. While you wait, calculate how many hours you must work to pay for it. Determine if this item will really improve the quality of your life, and if it’s more important than what is currently on your list of goals. If it is, shop around first to see if you can get a better price or wait a week or so to see if it will go on sale.
4. Don’t try to keep up with the Joneses. It’s only human nature to want more than what you have, and this is all too evident when we start wanting what our friends and family members have. Try not to let friends persuade you to spend money. Remember at the end of the shopping trip, you’re the one left with the bill not them. Instead, go shopping alone or choose to watch the game at your friend’s house on his new flat-screen TV. Not only will this help you save toward loftier goals, it will also help you determine the reason you really want a specific item: is it because your friend has it or likes it or because you really like it?
5. Make shopping harder. Delete bookmarked shopping sites from your computer. Unsubscribe from catalogs you receive either by calling the specific retailer and asking to be removed from their list or visit www.catalogchoice.org to select those you no longer wish to receive. Only carry one credit card in your wallet, preferably the one with the smallest credit limit. Once you reach it, then you know you’re done shopping.
And our most important tip:
Consult with yourself before you buy. Advertisers know how to play on buyers’ emotions. After all, it is their job to package their products well and to sell it to you. Before you give in, ask yourself whether you truly need it before you purchase it. Don’t become your worst enemy!
Equal Housing Opportunity Lender