Use Existing Debt to Prevent Overspending

You know the importance of your budget and you know that sticking to it is imperative to having a stress and remorse-free holiday.  Then you are in the store getting gifts and you see this awesome toy that isn’t on your list but you know your kid will love and an entire display of $2.00 DVDs.  Oh, and that scarf would be adorable on your sister.  Okay, you’ll just take a quick look at the Dollar Spot… Suddenly you check out and the total is $100 more than you planned to spend and only one item in your bags is actually on your gift list. 

Sound familiar?  There is a way to help combat this type of impulse shopping and it doesn’t involve changing your shopping habits or way of thinking.  Using your existing debt to avoid overspending can help you combat this tendency to impulse buy and make you cognizant of what you’re spending and how it is affecting your overall budget.  Even better, you can continue to use this method long after the holidays have ended.

Use this simple method to help you use existing debt to prevent overspending!

 

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Use this simple method to help you use existing debt to prevent overspending!

Calculate Your Debt

The first step is to calculate your total debt (all of it).  If you have a mortgage, the remaining balance you have to pay goes on the list.  Student loans?  You bet.  Any and everything that you owe money on (including personal loans) need to be on this list.

  • Mortgage
  • Student Loans
  • Credit Cards
  • Personal Loans
  • Auto Loans
  • Collections Items
  • Cell Phones you are Paying Monthly On
  • Medical Bills
  • Lines of Credit
  • Any Other Debt You Can Think Of

Add up all of your debts to find out your total amount of money owed.  If you have never taken the time to do this before, you may be shocked at the number.  That’s great because that means this will be even more effective.

 

Use this simple method to help you use existing debt to prevent overspending!

Make Your Debt Work for You

Once you have your debt total, write it on a piece of paper.  Put the paper in your wallet.  If you frequently use your debit or credit card, place your debt slip in front of it.  If you typically use cash, place it there.  Use multiples of your debt totals is you don’t have any standard spending style.

 

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Also write this total number on a larger slip of paper to place somewhere visible in your home.  This could be on your fridge, on the back of your front door, or anywhere that you will see it often.  Before you go out shopping, look at the debt total.  Use is as a reminder of why you set your budget and the importance of sticking to it.

When you pull out your payment method at the store, use your total debt as a reminder to only buy what you really need.  Can you really afford more debt?  Even small purchases that are outside of your budget can add up to hundreds in the long run.

Tip:

  • When you are first beginning, you may want to look at your debt cards multiple times throughout your shopping trip.  This keeps you from getting to the checkout and then letting the cashier know that you’ve changed your mind on 10+ items.

 

Use this simple method to help you use existing debt to prevent overspending!

Continue After the Holidays

This is such an effective way to prevent impulse buying that you will want to keep doing it long after the holidays have ended.  If you start to slip back, there is a bonus step you can take to keep the momentum going.

Bonus Step:

Every 3-4 months, reassess your debt.  Again, add everything up and total it.  Write it down and put the total with your payment method(s).  This is effective in one of two ways:

  • Your total has gone up and once you realize that it can help strengthen your resolve again.
  • Your total has gone down and you will want to continue the method to keep seeing the number drop further.

You already have debt so why not make it work for you?  This is a great way for you to start being in control of your spending and as such, in control of your money.  Check back on Sunday to learn another tool for keeping your budget in check.  And don’t forget to sign up for the 31 Days of Saving on Holiday Gifts newsletter to get tomorrow’s free gift tutorial. (Don’t worry, you don’t get an email every day, just the occasional update with all of your freebies and the most recent article.) **Update** All freebies from this 31 Days List have been moved to the VIP Library for subscribers. Sign up for free here!

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  31 Days of Saving on Holiday Gifts: the free course to help you have you best holiday season yet! From building a strong budgetary foundation to finding small and large ways to save, this will help you knock your holiday gifts out of the park without breaking the bank!                                                     Check out #write31days

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Click 31 Days of Saving on Holiday Gifts.

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