When getting out of debt, one of the first things we had to do was break the credit card habit. For years, we used credit cards for convenience – and then we woke up one day and realized we were in debt and paying interest. Here’s how we changed our behaviors and made the break –
We Balanced Our Checkbook –
This set us up for success. This is a simple, but necessary step. We needed to know exactly how much money we had, to the penny, for spending and debt reduction. It only takes a few minutes to go online, review recent transactions and balance the checkbook.
We Lived On A Budget –
Instead of spending without a plan, we sit down together and create a monthly budget. This keeps us in touch with our finances, and we aren’t simply swiping a credit card when we want something.
We Kept Our Credit Cards –
We didn’t cut up our credit cards or freeze them in ice water. Instead, we just decided not to use them for everyday purchases. They are in our wallets, for emergencies.
We Used A Debt Card –
For convenience purchases, we use a debit card.
We Learned To Manage Our Cash –
We used – and use – the popular envelope system to manage our cash. We limit our spending to the amounts in our envelopes. This way, we are not tempted to overspend – and thus use our credit cards.
I Stopped Thinking “I Deserve This” –
In the past, I could justify almost any purchase by saying to myself, “I deserve this…” It didn’t how much it cost, or how little we had, I could somehow rationalize the use credit. In fact, I can distinctly remember thinking, “What’s a little interest? I work hard, I want it, so I’m going to get it.”
Now, instead of thinking, “I deserve this.” I think, “Can I truly afford this?”
There is nothing wrong, fundamentally, with credit card use. The problem is – use can turn into abuse very quickly.
I recently wrote that cutting up the credit card may not be such a great idea.
For me, forming new habits works better in the sense of tracking and budgeting my expenses and also when i do use a credit card, i know how much i can or can’t spend.
By cutting it up, it is almost like throwing the problem away or hiding it, which essentially may not work, for long term that is.
I still think ‘I deserve..’ but not in the same way. When I see something that I wantwantwant (and not really need), I think about how much it cost and the consequences of buying it. Before I’d easily think the same thing about ‘oh just that little bit of interest’ and that ‘I deserve to have this’.
Now I’ve changed it into thinking about how much I deserve to have financial peace of mind, how I deserve to have money in the bank for emergencies and needed items. Having that outweighs any ‘deserving a thing’ by a ton. So I deserve a lot, but very little of those are ‘things’ I can buy 😉