Consumerism is driving economies all around. It has a lot of benefits for a lot of industries but for the buying public, it holds a lot of challenges.
The primary tool driving a consumer-centric economy is purchasing capacity. If you do not have the means to purchase a specific item, then you cannot get it. But this practice has been shattered to pieces with the advent of credit cards. This purchasing tool is so rampant that individuals sometimes have more than one in their possession.
As the name suggests, this plastic card allows you to purchase items on credit. Even if you do not have the actual money on hand, it lures you to buy the item anyway because you can pay it off at a given time in the future. This way of thinking has crippled a lot of families by putting them in credit card debt and left in regret as to why they kept purchasing all the items in the past.
Getting rid of your cards is a good start in trying to keep debt away. If you have more than one card, pay all of them off, call the bank to cut the credit and literally cut the card in half. Keep one card in your possession just for emergency. It will also be your tool in getting your credit score up as long as you can pay it off after every purchase.
Starting to live without your cards will take some getting used to if you have been dependent on them for the longest time. The next thing you need to do is sit down and look at your expenses every month. With this list, match it with your monthly income. Your income must always be bigger or at least equal to your expenses. If it is the other way around, you will have to find a way to either increase your income or reduce your monthly payables.
Once you are all set on this step, next is to adopt a cash basis policy. It means that you use only the cash on hand in managing expenses. This is where maintaining a budget comes in handy. With your list of expenses and income, you will know how much amount should go to where every single time.
One idea to keep tabs in this is to categorize your expenses and by using an envelope. Mark envelops based on the category. With your expense list, identify each of them and put them in a category. Every time you get your income, whether from a job or business, make sure that you put in the envelope what you have budgeted as payment for each item. It also applies to your weekly allowance if you keep one. It lets you know how much you can spend and limits it at that amount.
Another idea is using a debit card. Yes, it is similar in look and feel and even the way you use it to purchase items with a credit card with one major difference – it runs on a debit system. You can only use it if you put money in it. Think of it as a state of the art piggy bank. You can only consume as much as you have put in, nothing more.
Of course, all these will be pointless if you do not adapt a change in attitude. You can cut all the credit cards you want but if you keep the same buying mentality of getting what you cannot afford, you will still feel the disadvantages of having a big debt.