Why Are You In Debt? (Part 1)
Very often people who are in debt say they no longer want to be in debt. And very often they take the steps to get themselves out. But, it seems to me, just as often people who claim they want to get out of debt do little to change their behaviour and their outcome. They keep on keeping on doing the very things that got them into debt in the first place. Here are the first four of 15 questions you may want to ask about why you’re in the hole.
Do you buy STUFF you don’t NEED? The biggest cue that you’ve got the Impulse Monkey on your back are the things you have bought but no used: the clothes with the tags still on, the shoes you have yet to wear, the new dishes you’ve used just once or twice in the six months that you’ve owned them.
Impulse shoppers are the first to admit they have a problem and the last to do anything about it. If you’re an impulse shopper, you need to remove the fuel for the impulse. That means cutting up your credit cards – or disabling them in some other fashion – and limiting the amount of cash you carry. It also means leaving your debit card at home unless you’re headed out to take care of a NEED: gas, groceries, etc. When you do go shopping, you have to use a list and never go off-list.
Window shopping is torture for the impulse shopper so don’t browse stores or participate in this female bonding ritual since you’re just teasing yourself by drooling over a bunch of stuff you don’t need.
Do you use credit to buy things you can’t afford to buy with cash? Hey, when you spend money you don’t have by using your credit card, line of credit or overdraft, you’re doing the wrong thing, plain and simple. If you can’t afford to pay for something in cash today, you should not be buying that thing, I don’t care how important you think it is, how great a deal you’re getting, or how desperate you feel. Using credit is no way to get out of debt. Put away all forms of credit and commit to building yourself a budget that balances. If you want something, you’ll have to give something else up to accumulate the cash you need to buy said item. If you can’t come up with the cash, you must not want that whatever badly enough.
Do you buy things for a one-time use that you could borrow from a friend or rent? Practically everyone is guilty of this. You need something like a sewing machine or power washer twice a year so you go and buy one and then watch it – and the money you spent, very likely on credit – sit and grow cobwebs (and interest charges?) What’s with us all? We have to own everything we ever use? In the old days friends borrowed from each other and stuff got way more use. Now our possessions are so much a part of who we are we a) hate to lend, and b) hate to have to admit we don’t already have one. Dumb! And why do we feel we need to apologize because we don’t have the right kind of wine glasses? “Sorry, I only have these cheap glasses.” It’s a glass for heaven’s sake.
Do you buy certain brands because they are a status symbol? While any car gets you from point A to point B, the high-cost brand-name buggies come with oohs and ahhs from friends and relatives. Ditto the D&G sunglasses, the LV handbags, the CL shoes… I could go on forever. If you’re paying a premium to have a brand name you have to ask yourself why. Is it because you don’t have confidence in your own sense of style? Is it because you’re trying to emulate the dudes and dames of TV and movie fame, wearing what they wear, driving what they drive, eating what they eat? How come? Is your life so sad that you’re trying to escape?
Hey, I’m all for spending your money on the things that bring you pleasure, so if you’re not using credit to make expensive brands part of your image, I’m not talking to you. But if you are using credit, what makes you think you have the right to this stuff if you can’t afford to pay for it?
Tune in tomorrow for three more questions you should be asking yourself if you’re in debt and can’t figure out why.