Debt can be a life saver and a life sucker, all at the same time! Debt, in the form of auto loans, student loans and mortgage loans, can make things easier. You can go to school and not worry about unrealistic upfront costs. You can own a home and take appropriate time to pay it off. You can buy a car that helps you get to work. On the other hand, debt in the form of credit cards can seem helpful but can really do some damage. There are certain things to live without if you want to be debt free, at least on your credit cards.
Certain spending and expenses should only come from the money in your bank account. Meaning, if your current income doesn’t cover the thing you want to buy, resorting to a credit card should not be an option. I completely understand that certain unexpected expenses can’t be avoided, and credit may be needed. However, a majority of things spent on a credit card can be avoided. I’m sharing 7 things to live without if you want to be debt free. If you want any of these 7 items, only leverage your income to get them.
#1 Salon Visits
Every woman likes the feeling of stepping out of a salon once her hair, nails, or any other service is done. However, if your budget is tight, frequent trips to the salon can push you into debt. Never should you leverage credit cards to cover a salon visit. You should try to do your own hair and nails from time to time. If you can’t do without a consistent blow-out or mani/pedi, then you must ensure it is budgeted for with your regular income. This will force you to evaluate spending in other areas, to ensure you prioritize your discretionary spending. If you want to be debt free, reduce the salon visits, or budget for them with your own money.
#2 Big Ticket Events
Big ticket events should never be paid for with a credit card. Why? Because often times, such events are known about months in advance. That means you have plenty of time to save up for the event and shouldn’t need to use your credit card to pay for it. Paying for large ticket items on your credit card can reduce the sense of urgency to get them paid for. That means the balance sits on your credit card longer and accrues more interest.
#3 Lavish Birthday or Celebratory Gifts
Birthdays and other special occasions are also things that can be planned for in advance. Reach out to the person who is celebrating something as early as possible to see what their plans are. You can also shop for your gifts well in advance. Factor gifts and celebrations into your monthly budget, let that monthly amount build up until you need to purchase your gift or plan for an event.
#4 Constant or Subtle Shopping
We all do this. We pop into a store to pick up one thing and leave with 5 things. Even if those things aren’t too expensive, they add up over time. In fact, the constant need to go “pick up something” that isn’t in budget is an easy way to rack up your credit card bill. Subtle shopping “here and there” can form long-term habits. When you do need to buy something, think through it and plan for it. Your budget should account for things you need, so using credit shouldn’t be an option. I shouldn’t have to tell you this, but shopping sprees should never be paid for with credit.
#5 Unrealistic Vacations
Back in college, I was that girl who would take a trip knowing I only had enough money in my account to cover rent. I would get back from the trip and be struggling to scrounge up money to pay my rent. The thought of the experience outweighed the reality of the situation. Not to mention, 9 times out of 10 I would return home more stressed than ever. I would be worried about money while on the trip and when I returned. If you can’t afford to take a trip (even an overnight getaway) with the money in your bank account, don’t go. You will have opportunities to go again, when your money situation is a little better.
#6 Consistent Social Outings
When you make good money, you tend to want to spend it on things you want to do. While there is nothing wrong with that, the things you want to do need to be budgeted for. If you are trying to pay down debt, but are consistently going out to eat or brunching or going to bars, you are delaying your progress. Especially if those outings are being paid for with credit. I always tell clients to include fun and discretionary items in their budget, in moderation. There will be plenty of time for fun, but prioritizing fun over your financial responsibilities puts you in a worse-off position.
#7 Excessive Ubers and Lyfts
Uber and Lyft are extremely convenient and relatively affordable, when used in moderation. Excessive Uber and Lyft rides can quickly add up and throw your transportation budget down the drain. If your Uber, Lyft or any other rideshare service is linked to your credit card, unlink it now. Link it to your checking account. I can guarantee you will only use rideshare services when you need it when you know it’s coming out of your own money instantly.
Did you notice that all of the items listed above are all discretionary areas? They are all things you can live without or find cheaper alternatives for. The moral of the story is to use the money you have now to fund the things you want. Using credit for want items and discretionary things takes the urgency out of paying for such things. You put it on your credit card and “worry about it later”. That is a recipe for debt disaster.
To live a debt free life, avoid using credit on the items above. Budget and save for them, or cut them out until you are in a better financial position. It may stink right now, but it will be worth it in the future! Have you mastered using your own money for discretionary spending? Do you budget for the fun in your life? Post a comment below to share your thoughts!
The CGS Team