Society today is so immersed in consumerism. Everywhere you turn, you find advertisements that will prompt you to buy things. While there is nothing that we can do to change what we see around us, we can always control our ability to succumb to all the temptations.
One of the products that supports consumerism and puts us in debt are credit cards. This plastic card allows us to purchase items even when we do not have the cash to really afford them. While convenient, this is one of the lead debts that are crippling our society today. In fact, it holds the 3rd spot in terms of the most debt amount that we have. In the US, the total credit card debt amounts to more than $850B.
The appeal of this is so strong that sometimes, the only way to avoid succumbing to this temptation is to eliminate it from your life completely. But how do you get rid of credit cards when you got so used to it? It may be hard but it is possible. Remember, a few decades ago, people on this earth survived without them.
First and foremost, you need to close off your accounts save for one. We are trying to eliminate it but we still want to keep your credit score up. You need at least one card to prove that you are a responsible borrower. However, make sure that you will keep the balance of this card to zero - unless there is a real need for it. This act will help you maintain a good score while restricting the amount of debt that you could end up accumulating.
Now that you have eliminated your cards, you need to adapt a cash only purchase from now on. You will have to monitor the limited resources that you have and make sure that it goes where you intend it to go to. This is where a budget can come in handy. When you spend in cash, there is no paper trail like your card purchases so you have to take note of where your money goes to.
It helps to adapt the envelope budgeting system for this. Begin by placing your regular income and a detailed list of your expenses. Categorize your expenses and get the total amount. If your income can afford everything on your expense list, then you are all set to go. If not, then you need to increase your income or remove something from your expenses. Once you have all of these details, take note of the total expense per category. Get envelopes and label them per category. Every time you get your salary, divide it and place the corresponding amount on each envelope. The amount will depend on what is specified on your budget. This is the amount that you allowed to spend for that particular category for the rest of the month - or until the next paycheck.
You also have the option to use a debit card. It is different from a credit card because you can only use it when it has funds. It is as good as buying things using cash. Place the amount that you are entitled to use for shopping (food, groceries, clothing, etc) and do not add to it until your budget dictates you to.
These methods could take some time to get used to but once you do, controlling your expenses will not be so difficult. The elimination of credit cards from your regular purchases will help you make smarter spending decisions. Now, you can concentrate on getting out of debt since you now have started practicing the habits that will help you stay out of debt.
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By Samantha Seiffert
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