Today’s post is contributed by Amy Nickson, a passionate writer on finance. Amy is a professional blogger whom has started her own blog and also works as a contributor for the Oak View Law Group. Please share your opinions by commenting below.
How to battle temptation in the search for a debt-free life
Oh! it’s on sale – I should add in my cart, it’s the perfect lipstick shade for my new dress, this latest gizmo should be in my collection, a cruise trip for New Year… the list will go on and on.
We can’t curb the temptation to spend money on our endless wants.
The enticement for spending is common; most of us tend to spend a hell lot of money on our wants.
But we should be careful; if these spending temptations left unchecked, then it will lead to the debt problem.
How does the extra spending turn into painful debts?
Spending a little extra will not put you in debt. If you make the mistake of spending a little extra persistently, then you will be in debt shortly.
For example, on a bad morning, if you are late for your work, it is okay to spend a little extra on a cab to reach the office on time.
But, making a habit of spending some extra on almost everything like a morning coffee, transportation, lunch, and fashion can turn into a whole lot of expenditures.
People usually use their credit cards on a regular basis on things that are not in their budget.
Many of you also make a dangerous mistake by not paying the credit card balance in full within the stipulated time. As a result, you fall into debt.
Most of you don’t pay attention to your everyday expenses and have no idea about where your money is going. Thus, you are living beyond your means and accumulating debts.
Sam Farrington, founder of SoundMind Financial Planning and member of XY Planning Network, has said, not keeping a budget or failing to track spending lead to costly debt. Thus, people need to measure their money so that they can live within their means and can spend money that they have.
How to avoid temptation to live a debt-free life
Many people say that they can’t live within their means. Why so? Because most of them charge the purchases on their credit cards and forget about the payment until the balance is accumulating costly interest.
This is the story of most of the debtors who are struggling with huge credit card debts.
1. Be aware! Credit Card Companies provoke you to spend more
Credit cards are useful. Why are they useful? Some reasons are:
1. Credit cards are convenient
2. They are safe to use
3. Credit cards come with many deals.
The first two reasons are okay. When it comes to the reason no.3, there are many marketing gimmicks that you are not aware of.
The fact is the credit card companies aggravate the consumer’s temptation to spend more using credit cards.
They promote some baits like reward points, miles, discounts, sign up bonuses to entice you to use credit cards randomly.
Almost all credit card companies sweeten the deals by giving sign up bonuses to earn reward points to get free airfare or hotel stays.
Most of us can’t resist the temptation to earn the reward points and easily plan a vacation or purchase big-ticket items on credit cards.
Opening multiple credit card accounts just to earn the points is a no-no. This is why financial problems start and people fall into debt trouble.
Credit cards are only beneficial if you use them properly. You should stay within your credit limit and also pay off the balance within the time.
Michelle Black, author and credit expert at HOPE4USA.com has said, “Credit cards should be treated just like your bank account. If you don’t have the money to pay off the bill right that moment, then you should not use your credit card to make the purchase. Resolve to never revolve a credit card balance from month to month. Your wallet and your credit scores will thank you.”
2. Give value to a pay-in-cash lifestyle
Most of the people, especially young professionals, think using cash and following a budget is old-fashion.
These days, opening a credit card account is easy, and using it is even easier, which is difficult is making the payment. Because using a credit card doesn’t help you to understand when to stop buying. You can make purchases that you can pay later. But, people actually think they can pay the balance later, but they forget that they have to pay the balance in full within a stipulated time.
Once they fail to make the payment, they fall into debt. Thus, either you need to carry cash to make purchases so that you will know when to stop or use credit cards on things that you can afford.
They keep multiple credit cards instead of using cash. Thus, they often spend beyond their means.
Once you start living a pain-in cash lifestyle, you will be able to avoid overspending. Once you stop overspending, you can easily avoid debt in your life.
3 Consider a frugal lifestyle
If you want to live a debt-free life, then considering frugal lifestyle is the only answer. Frugal living is all about living a balanced financial life.
Frugal living is not being cheap. People who live a frugal lifestyle eat well, live in a nice home, go on nice trips, shop, and have fun.
They don’t waste money on meaningless things so that they can live a stress-free financial life. Frugal people strike a balance between spending and saving.
Frugal people value an emergency fund, savings account, and retirement fund to avoid falling into debt.
They practice more conscious spending so that they can stick to their budget and achieve all the financial goals easily.
Lastly, people who are already living a debt-free life say that it is difficult to live without debt, but not impossible. Yes, you may have to live a different lifestyle from others like skipping a vacation, planning short trips, buying a car with cash, using less credit card, setting aside money etc. By doing so, you can ensure a stress- free and debt free life.