How best to break overspending habits!?

[everyfrog]

I'm stuck at an impasse, one that has been bugging me for the past few years.

I keep a balance on only one credit card. A pattern I've noticed the past few years is that I always have a balance, and am constantly transferring it between 0% interest rate cards and always want to try to pay it off within a year.

Since I pay a high amount on my card so I can pay it off as soon as possible, it seems to leave me with little leftover at the end of the paycheck, so i pull from savings and/or, ahem, charge to my credit card, thus an ongoing balance. I keep my CC on me for emergency purposes, but I find myself occasionally pulling it out for these non-emergencies (unless it's groceries or gas that I need).

Anyway, I'm getting really tired of this. I really want to break my habits and tell myself, "no, you don't need to sign up for that half-marathon, or no, you don't need to go out to dinner tonight and yes, that piece of camping gear is nice but you don't need it."

I constantly think, "if I didn't have that CC bill, I COULD afford that race fee, backpack, put more $$ to my backyard remodel, etc."

My CC balance averages about $5,000 right now and I pay about $500 month on it right now.

I've also adapted the "cash only" method for groceries and eating out and when i stick to it, it works fantastic!

I'm looking for tips on how to help break my bad "overspending" habits! This forum seems like it has a lot of people who are great at brainstorming. I know the answer seems obvious but I'm always looking for new ideas. I thought maybe putting my numbers out there would allow someone to see something that I'm not!

Thanks!

EF

[Krasay]

The best way to stop using a credit card is to cut it up. If you are not ready for that step, put it away, get it out of your wallet and put it in the back of the sock drawer or in the safe. When it is not handy, you have to think before using it. You may change your mind by the time you get home to retrieve it.

[scfr]

One possibility is to place a visual reminder of why choosing NOT to spend money on a particular want would be a better choice for you, putting it on or in front of the credit card. It might be a picture of a child, pet, dream house or even just a piece of tape with words like "Stop & THINK" or "Retirement" or "WW-D?" ... whatever is your particular motivation. Each time you go to grab the card it will be there reminding & guiding you. Make it so you can't grab the card without stopping and making a very conscious decision to spend.

I used to make note of wants on a calendar one week out. If after a week I still thought the purchase was a good idea, then I would go ahead and spend. Most of the time I chose not to. The items I chose to spend on truly enhanced my life.

[MonkeyMama]

I have never overspent or racked up a credit card. My mentality is that I don't buy anything I don't save up for first. That's it. You have seemed to see that this works for grocery and eating out, but should be applied to everything.

Why? So you aren't constantly paying for old expenditures.

I also like scfr's advice. We were always focused on the upside (a goal). What is the upside? What are your goals? Keep these front of mind. I think saving has always been easy for us because we have always been well aware of the upside. We have been able to afford everything that was truly important to us. We've been able to shrug at the idea of unemployment. We don't have to work as much now that we have kids. The last two are priceless.

Along the same lines, you need to prioritize. There is no way we could afford every passing fancy, so it does largely come down to prioritizing. Which I think cash spending forces you to do on some level. I can't throw everything I can't afford on a credit card. So... I have to pick the one thing that is most important. It's okay to recognize that you may want a lot of things, but I don't know how you work through that unless you are start prioritizing what is the most important.

[Petunia 100]

Since I pay a high amount on my card so I can pay it off as soon as possible, it seems to leave me with little leftover at the end of the paycheck, so i pull from savings and/or, ahem, charge to my credit card, thus an ongoing balance. I keep my CC on me for emergency purposes, but I find myself occasionally pulling it out for these non-emergencies (unless it's groceries or gas that I need).

Stop doing that. I have found the only way to break a habit is....to stop doing the thing I want to stop doing.

Set a budget. Budget an amount for credit card debt repayment. Budget for other spending. Stop using the card. If you don't want to cut it up, put it in a freezer bag with water and let it freeze.

If you stop making ALL new charges and make a payment each month, that nasty credit card debt will eventually go away.

I have been where you are, and having a simple written budget worked for me. I still struggle with spending, but credit card debt is a thing of the past.

Best of luck to you.

[GrimJack]

One book I read suggested that you never spend capital and that anything you spend should about 10 times that amount producing income. Though I think that she actually said to have 20X invested.

[PauletteGoddard]

Idea: Put these six questions somewhere visible in your wallet

1. Will this make my life better?

Many times we buy things because they are interesting or cool. We need to begin to look at our belongings as tools that need to fill a function. Ask yourself if buying this item will ultimately save time, energy, and/or money. Will having this item eliminate an important need that you've had? If not, then you bay want to think about not making that purchase.

2. Do I already have one or something similar?

Ask yourself if you already own one of these items, or something that can take care of the same job. If you do, then you are doubling your clutter for no reason. Make sure that the need for the item is pressing. It may be possible for you to borrow/rent the item to provide more control of the clutter.

3. Am I ready to get rid of an old item that this replaces?

If you can't part with an older version of something, then you shouldn't buy the newer one yet. Be willing to get rid of the old in order to enjoy the new.

4. Where will this belong in my house?

Do you have space for this item in your home? Where is the specific location that this will be stored? If you don't have a place for it, it's not a good idea to buy it. It's an invitation to clutter up your home. If you don't have a place for it, and still really need or want it, make space before you buy it. Get rid of other items, reorganize, or whatever it takes to create a home for your new item.

5. Perishables: How long will this item be good?

We don't think of perishables as a big threat to our clutter because they'll eventually be thrown out. In order to save space and money, figure out exactly how long it will last. Are you able to finish it before it will go bad? Sometimes a deal on perishables makes you want to stock up. Make sure you are only stocking up on what you'll be able to finish and use.

6. Have I researched price and quality enough?

Hasty decisions are sometimes the worst. Make sure you've researched prices, features, quality and more to make the best informed decision about where to spend your money. If you're not sure, wait. Read reviews. Talk to friends. List pros and cons. Take a little time to look around at your options and make an informed decision.

[snafu]

Keep doing the same thing, keep getting the same result and you don't lit so so I suggest you try something different. Lots of terrific suggestions, time to make some changes. If you can't leave the CC at home, I suggest tucking it under the spare tire in the car, inconveniently available. Try Frugal February and pay down CC asap.

[everyfrog]

Hi all,

Thanks so much for the feedback! It's definitely helped me rethink a few things.

I'm actually a pretty frugal person and I hate shopping, I just happen to have a few expensive hobbies that I have a weakness for. That said, that's making excuses for using the CC when I should have NO CC debt and be using cash when I have it to invest in them. And I do have a very detailed typed out week-by-week budget but I'm obviously not following it as closely as I should.

And those questions that Paulette posted, I think those all the time when I'm out shopping - even when I'm at Goodwill - but obviously not enough lately.

ANYWAY - I plucked that credit card out of my wallet this morning and into a baggie of water and tossed it in the freezer. YAY THE FIRST STEP!

And it wasn't nearly as painful as I thought it would be.

The next question - I have a decent amount of savings in my EF and there are three major "temporary" bills that I'm paying right now - a car ($163/month, for the next five years), a computer ($72/month for the next 14 months) and the CC bill, all of which total to about $749 a month (WOW, I just did the math on that for the first time. That's a lot of dough!)

Should I pull from savings to pay off some of this? The car payment is brand new to me and reasonable to me (I made sure it was), I think, so I wouldn't touch that first.

EF

[EarlyRetirementJoy]

Hi all,

Thanks so much for the feedback! It's definitely helped me rethink a few things.

I'm actually a pretty frugal person and I hate shopping, I just happen to have a few expensive hobbies that I have a weakness for. That said, that's making excuses for using the CC when I should have NO CC debt and be using cash when I have it to invest in them. And I do have a very detailed typed out week-by-week budget but I'm obviously not following it as closely as I should.

And those questions that Paulette posted, I think those all the time when I'm out shopping - even when I'm at Goodwill - but obviously not enough lately.

ANYWAY - I plucked that credit card out of my wallet this morning and into a baggie of water and tossed it in the freezer. YAY THE FIRST STEP!

And it wasn't nearly as painful as I thought it would be.

The next question - I have a decent amount of savings in my EF and there are three major "temporary" bills that I'm paying right now - a car ($163/month, for the next five years), a computer ($72/month for the next 14 months) and the CC bill, all of which total to about $749 a month (WOW, I just did the math on that for the first time. That's a lot of dough!)

Should I pull from savings to pay off some of this? The car payment is brand new to me and reasonable to me (I made sure it was), I think, so I wouldn't touch that first.

EF

The simple answer, is "yes" you should pull from savings and get rid of that debt pronto. Debt is voluntary servitude, which it sounds like you are beginning to realize, so good for you!

Dave Ramsey, who has helped many individuals similar to yourself get out of debt, recommends that you first put away $1,000 as a starter emergency fund, then pay off all debt, then build a three to six month emergency fund, then move onto retirement savings and everything else.

[bjl584]

Hi all,

Thanks so much for the feedback! It's definitely helped me rethink a few things.

I'm actually a pretty frugal person and I hate shopping, I just happen to have a few expensive hobbies that I have a weakness for. That said, that's making excuses for using the CC when I should have NO CC debt and be using cash when I have it to invest in them. And I do have a very detailed typed out week-by-week budget but I'm obviously not following it as closely as I should.

And those questions that Paulette posted, I think those all the time when I'm out shopping - even when I'm at Goodwill - but obviously not enough lately.

ANYWAY - I plucked that credit card out of my wallet this morning and into a baggie of water and tossed it in the freezer. YAY THE FIRST STEP!

And it wasn't nearly as painful as I thought it would be.

The next question - I have a decent amount of savings in my EF and there are three major "temporary" bills that I'm paying right now - a car ($163/month, for the next five years), a computer ($72/month for the next 14 months) and the CC bill, all of which total to about $749 a month (WOW, I just did the math on that for the first time. That's a lot of dough!)

Should I pull from savings to pay off some of this? The car payment is brand new to me and reasonable to me (I made sure it was), I think, so I wouldn't touch that first.

EF

How much is a "decent" amount in emergency fund savings?

If you can pay off most or all of the debt and still leave a comfortable cash cushion in EF savings (say 3 months worth of expenses), then I'd pay off the debts today.

But, if paying off the debts will drain your cash reserves, then I wouldn't do it just yet. Don't put yourself in a situation where you have no cash to fall back on. If you get in a fix you may be forced to run up the credit card again, and you don't want that.

[samuelwright]

Some folks (like me) have a difficult time stopping their bad habits "cold turkey." My challenges: I love to eat out and drink out; and still eat out too often. But I "compromise" with myself to reduce how much I spend .. in my bad habits.

Here are a few examples of my "compromises" with myself:

1) Coffee meetups - instead of meeting a friend for lunch or dinner, I'll invite a friend out for coffee. I still get to enjoy the company of a friend, and without the guilt of spending much on a meal.

2) Hybrid dining - I'll eat something at home just before going out to eat elsewhere. For example, this morning, I really wanted to go out for a nice brunch. Instead, I had a bowl of oatmeal at my place. I then went to a cafe and ordered an egg sandwich and coffee. (I spent $5 instead of the otherwise $20 I might have spent.)

3) Buy less expensive alcohol - I'll buy $3 dollar bottle of wine from Trader Joes instead of the more expensive stuff. I drink at home more often lately too. Bars are very expensive.

The better answers for me, of course, are: specify a particular amount of money for food and entertainment and stick with it! Eat at home more often, and stop drinking!

Perhaps these strategies might help you "wean down" in the interim if you have similar challenges like me.

[Augustine]

I just happen to have a few expensive hobbies that I have a weakness for. That said, that's making excuses for using the CC when I should have NO CC debt and be using cash when I have it to invest in them. And I do have a very detailed typed out week-by-week budget but I'm obviously not following it as closely as I should..
EF

We all have one or more 'expensive hobbies' than we care to admit. However, that should not stop you from budgeting for that expenditure because money spent on hobbies can be very easy to justify on a logical and emotional level. The key is to master the art of delayed gratification and maintain a high level of discipline when it comes to following your budget.

[everyfrog]

My CC debt currently is $5100.

I have $9200 in my EF. which, according to the budget I created if I were to lose my job tomorrow, gives me 4.5 months of living expenses.

After much thinking and reading and thinking and punching numbers, I'm thinking this:

Use just enough savings to pay down CC debt but leave myself 3 months worth of living expenses.

That leaves me with basically $2,500 in debt. I can continue paying the $500/month toward it (like I am now) to pay it off sooner or transfer to a 0% card and pay less per month but way before the 0% period is up.

I compared bank cards vs. credit union cards and balance transfer fees and it'd be cheaper to go with a bank card.

OR

I just pay it all off, leaving me 2 months of living expenses if i lost my job tomorrow, and feel a heck of a lot better.

[EarlyRetirementJoy]

Get rid of it all, every dime of debt, today, if possible. Then take every dime you were directing to debt, and instead direct it to savings. Within a very short time you'll have replenished your EF, and be on your way to building it to three to six months reserve, opening the door to the rest of your life.

And do look into checking out Total Money Makeover from your local library. I got mine as an e-book loan, even easier. I predict it will be the best few hours you've ever spent if you do.