Spending money you don’t have is easy when you own a credit card. People who otherwise have perfect credit scores can easily ruin their financial reputation by spending more than they can pay back on time. Sometimes, the best thing to do is to avoid applying for or using a credit card altogether. However, if you’ve fallen into credit card debt, here are some tips that will help to make your transition from being in debt to becoming debt free much easier.
Know Your Pitfalls
What are the items that you’re always spending money on? Do not include essential items such as food and utilities. Think about the things you don’t need, such as fast food, clothing, jewelry, shoes, etc. Make a note of your weakness and try to refrain from using your credit card anymore for those items. The more aware you are, the less likely you are to use your credit card when it comes to your material weaknesses.
Keep a Record of Spending
Chances are that you’re spending much more than what you’re currently aware of. From now on, each time you choose to whip out your credit card, think twice. Take a look at what you’ve been purchasing as well as how much money you’ve spent on those particular items. Ask yourself beforehand if you really need the item you’re about to buy.
Dining Out Will Do It
Although no one wants to think about “going without,” oftentimes, it is the only way. Some of the ways you can scrimp and save is to make the decision to dine in instead of eating out. People usually have no idea as to how much they’re really spending on fast food and dining out until they take the time out to crunch the numbers. Most families spend at least $100.00 or more on dining out per week. Over the course of a month, that’s money that could be going toward credit card debt. Focus on clipping coupons and shopping for food from the grocery store. It may take more time to prepare meals, but in the end, you’re saving hundreds per month.
Calculate Your Current Cost For Living
Before you decide to go out and make that next big purchase, first figure out whether or not you have the money to do so. You may be shocked at how much it costs just to “live.” Sit down and add up the total amount of your electricity bill, house payment (or rent), water bill, phone bill, cell phone bill, internet bill, cable bill, car insurance, car payment, necessities (such as cleaning supplies and toilet paper, diapers, baby powder, shampoo, soap, etc.), gas money, and lunch money for the kids. After calculating your current cost for living, take a look at your monthly salary. From there, determine how much money you actually have for paying off your debt and begin the repayment process.
Stop Using Your Card
You may find that the easiest thing to do is to stop using your card altogether until you can get a handle on your debt. The process of paying off your debt will take some time, but as long as you make a weekly or monthly commitment, you will reach your desired goal.
Just Use Cash
It may be time for you start thinking about using cash for all of your purchases. Sure, in the beginning, swiping your credit card for endless items was fun, but now, you’re paying for it – big time. As a matter of fact, you’re paying for it in a much bigger way than you’ve ever imagined – your credit score is ruined, you’re unable to apply for a mortgage, a better job, and it’s quite possible that your credit card debt is drawing in so much interest that you’re falling behind on your utilities and other household bills just struggling to keep up. You may feel like a hamster on a wheel that’s never going to win. Do you feel this way? If so, use cash and things will get better, but remember – you’ve also got to pay off your debt. Better to start now than to allow things to escalate any more than they already have.
Keep Your Mind on the End Results
While no one likes to think about spending their money on bills and credit card debt, in the end, the results will be worth it. Each and every time you think about reaching for your card, remember that you’re not only going to have to pay for the item, but the interest of the purchase as well. Consider the two possible outcomes.
On one hand, you’ll have the item you want and feel satisfied – but only for a moment. Ask yourself how your life will change if you have the item. Do you really need it? On the other hand, if you choose to hold out and save your money to purchase the item later on, you will not have to suffer the stress of falling further into debt. As a result, you feel a sense of accomplishment by choosing not to make the purchase, and in the end, be glad that you didn’t.
Living frugally with credit card debt is not impossible. At worst, it may require some minor adjustments in the way that you think. Try not to be so impatient when it comes to obtaining what you want. Try to think more responsibly and make an effort to think ahead as well.
This is a guest post from Mirsad Hasic who is the editor of Think Credit Cards, a site where you will learn how to pick a credit card that suits your current needs and also learn how to stay away from credit card debt.
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