The Monday carnivals are up. Frugal for Life is hosting the Carnival of Debt Reduction while Conumerism Commentary stepped in to save this week’s Carnival of Personal Finance. both are worth checking out to see a wide variety of articles from the personal finance and money saving writers out there.
According to the survey people found the following items “essential”:
Cable / Satellite TV – 49%
Cell phone – 46%
High-speed Internet access – 44 percent
Entertainment (movies, books, dining out, etc.) – 32 percent.
Big screen TV – 6%
Gym membership – 6%
Now different circumstances will make different things essential for different people. For example, high speed Internet is “essential” for me in that my income is based on time I spend on the Internet. Could I live without high speed Internet…yes, but I would be a lot poorer. It allows me to do more and thus increase my income far above the difference I would pay if I went back to dial up.
Another factor is that i can afford everything on the list. Even though they may not be essential, I have everything except the cell phone (never had) and gym membership (had one, but wasn’t using it enough to justify paying for it). If I was trying to pull myself out of debt, however, the only one I could truly classify as essential for me would be the high speed Internet.
While I’m sure there are a few people that require satellite TV as an essential part of their work and income, I highly doubt that it is 50%. I get most of my news off the Internet and with the decision to try and make this my full time job, I haven’t watched TV in the past month. Understanding that many of the things we want are not necessarily “essential” can greatly help you keep within your budget. This is because you can use those things that you want to help motivate yourself to save.
A great way to work out wants and needs is to give the list of the things you believe you need to a third party. If you can convince them that having them will make you more productive than if you didn’t have them, then you can make a strong case that they are essential. if you can’t, then it doesn’t mean you can’t have it, but you need to realize it’s expendable if money gets tight.
I received an email the other day asking me what I felt was the most difficult part of climbing out of credit card debt. While there are a number of issues that need to be addressed when tackling credit card debt, the habit of using the credit card when you really shouldn’t is a huge contributing factor for most people.
The most difficult part of changing this habit is recognizing it in the first place. The fact that it’s a habit means that you probably use the credit card to purchase things without even giving it a second thought. So the challenge becomes learning how to make yourself realize when you are about to use your credit card in a way which is detrimental to your finances.
There are a couple of parts to this process. The first is recognizing that your current credit card habits need to change. Recognizing them and setting up a plan of what can and what shouldn’t be placed on your credit card is the first step. This first step, by itself, however, is usually not enough. You must also put into place a system that will help you take notice so you don’t fall back into your past habit before you realize it.
A simple way to remind yourself and help break the habit is to place your credit or debit card into a credit card condom (referred to as such because they help “protect” you from unwanted consequences when used properly). Basically it’s simply a paper sleeve that you slip around your credit or debit card that has some type of warning on the outside so that you have to think twice before using it. While this may sound so simple that it seems almost silly, it’s often the exact motivation a person needs if they are serious about decreasing their credit card debt (if you aren’t serious, then credit card condoms – or any other tactic – isn’t going to work).
While there are a number of sites that sell these sleeves for about $5, you can also print you own credit card condom for free and give it a try. If you use your credit card more than you should and are serious about trying to get your spending back under control, a credit card condom may be exactly what you’ve been looking for to help curb your spending. Sometimes it’s little reminders that end up being the most effective tool to help you establish your self discipline when trying to get yourself out of debt.
Okay, it’s still late Sunday night, but the Monday carnivals are already up. Blawg Review is hosting Carnival of the Capitalists which has my The Best Investment You Can Make post. Consumer Commentary is hosting the Carnival of Personal Finance and my Case study On Saving Money. Last, but not least, Frugal For Life is hosting the Carnival of Debt Reduction and the If I had The Power… post.
A lot of good reading from all of them that should keep me plenty busy for the next few hours…
The personal finance and debt reduction carnivals are both live. Frugal Underground is hosting the one on debt reduction and My Money Blog is hosting the one on personal finance.
Running a website about personal finance and saving money, I get some strange emails from time to time and yesterday was one of those times. I received an email from a person looking for help with her credit report:
…I can’t do anything I want because my credit score is too low. I had to file for bankruptcy and now they won’t give me credit cards unless they are secured. But I can’t afford a to pay for a secured credit card, so I need a regular credit card. But my credit score is bad, so they won’t give me one. I try to explain, but they don’t understand and won’t give me what I want.
I need some help. I tried to make them understand, but couldn’t. So I need someone that can make them understand. Please call the credit bureaus and tell them to raise my credit score. Then I can get the credit card that I need and they will understand.
I am trustworthy. I always do what I say I’m going to do. If you do this for me, I will pay you. All I need is the credit card so I can get a cash advance and then I will pay you. I know you are trustworthy too. So please help me and make them understand…
Now, besides the painfully obvious point that this person has some serious money/budgeting problems, what I found amazing was that anyone would think that I have the power and influence to tell the credit bureaus what to do. Other than super hero type powers, being able to tell the credit bureaus what to do would be right up there with the top skill sets to have in the world of personal finance. It would certainly be a extremely lucrative power to have and I don’t believe I would be writing this blog if I did, but unfortunately I don’t (I’m sure the email writer will also be disappointed to find this out). For those that are looking for ways to improve your credit score, you’ll have to try doing it the old fashion way or you can search for someone else that possesses the magical credit score power.