One of the main attractions of using credit cards is that you have spending power when you need it. Instantly, right there when you see that something you must have. Sounds good but this is also, potentially, the beginning of that never ending spiral into debt, IF you don’t manage your spending well. I advocate for responsible use of credit cards, that means planning your spending and sticking to it.
There are, however, some instances when you cannot plan for expenses and your credit card will be the solution to your emergencies. This will happen when you have to take care of situations on the spot and may not have immediate access to emergency funds.
Some scenarios in which a credit card can be a life saver may include:
- Unexpected car breakdown. You may need to pay for towing, parts and service right away.
- Emergency hotel, if for example, you are travelling and the flight is cancelled in a foreign country
- Emergency medical expenses
These emergency situations are very different from impulsive shopping experiences. Generally speaking, sales are not emergencies and so the use of a credit card in the event of a sale purely for the thrill of scoring a few (or many) deals, is not something I’d support you with. Sorry. No.
Here are a few questions to ask yourself before splurging in a sale. (I know your eyes may be too glassed over by all the new glittery stuff you could take home, but have a read, some of it may stick and come back to you at the right moment. That would be before you swipe that card.)
Ask yourself :
- Are you really saving by buying these ‘sale’ items?
- Can you afford it? The price may be reduced but is it within your budget?
- How will you pay for it? Remember, we don’t spend what we don’t have. If it isn’t a genuine emergency and you will have to pay it over time, then it probably isn’t a good idea. Remember the goal, the- ‘I’ll pay my statement balance in full and never pay interest’ goal!
- Do you need it? Will you use/wear it or do you think it is just too cute and cheap to pass up?
- Do you have a similar item already?
- Will another one make you happy for more than a half a day?
- Will you really use so many___________ (name your weakness) before the stale date?
I know the feeling of going into a store and thinking ‘oh, this sale is too good to leave with nothing!!’ Then come hell or high water, even just for the bragging rights, you must buy something? And, then you end up leaving with the cute little dress you think will be perfect for a date, except you don’t have a date, and it is two sizes too small! You never lose the 15 pounds and you admire it in your closet for a very long time until you eventually throw it out or give it to your younger cousin.
The more creep you have in your spending (you know, little unplanned expenses that are small but add up) the more of a shock your statement may be to both you and your income.
So what are we going to do?
- Plan your spending. Plan, plan, plan!
- Be obsessive about making lists
- Stick to the list!
TIP: Allow yourself some wiggle room in the budget for something extra. Cap this extra amount. This way, you have some contingency spending money but you are still within the budget. Being realistic helps, that way you won’t feel pushed to throw the whole list away.
Reward yourself. Occasional treats can help to prevent the need for constant splurging.
Put some space between the rewards to give yourself something to look forward to.
- Don’t shop after a bad day or when you are feeling emotional or stressed. It is likely that shopping with stress will lead you to use the shopping as therapy and you may end up buying more than you need.
- Shop only with someone who is similarly budget minded. Peer pressure is real even with shopping, and the urge to keep up with friends may push you to buy what you don’t need.
- Download an app to help track your spending.
- Don’t give yourself too much time to shop. Taking away the immediate temptation may help stem the urge to splurge.
I hope I’ve been some help to you this weekend. Remember, you deserve the best, but being in debt so much that you can’t sleep is not the best for anyone.
Spend Wisely and Live Richly!