Sunday, November 9, 2008

Credit Card Debt

The old saying goes, "Denial is not a river in Egypt." Americans are in denial about their credit card debt. Studies have shown people who charge on a credit card cannot recall what they have charged. People who pay cash can recall what they bought.
How do we wean ourselves from credit card debt?
1. Don't buy it if you don't have to. If your TV breaks, don't buy a new one, or get the old one fixed until you have the cash. Go to the library and get a book, take a walk, visit a friend or family, do some of those household things you should have done long ago, but were too busy (probably watching TV).
2. Think of Grandma. Grandma never had a credit card. She even paid cash for the utility bill! Well, perhaps you don't have to go that far, but if in doubt, ask yourself, "What would Grandma do?" Grnadma Ida could have written the book on money management. She would use a bar of soap until you could barely hold it, then when it was barely a sliver, put it in a jar. When the jar was 1/2 full, she would put water in it to soften the soap slivers and use a portion of the soap slurry to wash her clothes. Perhaps that is why her clothes always smelled so good!
3. Plan ahead. If you know your car is going to need new tires, don't bury your head in the sand. Start planning for them now. Put money aside, even if it's just a few dollars. Start a small savings account for "a rainy day" and make a vow to put money in it every pay check. Or, if it seems you don't even have enough money to warrant a trip to the bank, do what Grandma did, put your few dollars in a "sugar bowl" or whatever you prefer keeping money in. The key is to do it regularly.
3. Live within your means. When I was in college of home economics, it was in the dark ages when we still had to take core courses in life management skills (imagine!). One professor said something that had never occurred to my young mind. "People always say they aren't paid enough. What they really should be saying is I am spending too much for what I am paid. Get your spending in check and the pay will take care of itself."

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