I am trying to be more mindful in all areas of my life, and spending and eating are probably the most two challenging of those areas for me. I am turning 40 this year, and this has helped me look at my life and what I want to achieve in the next decade. Still having debt is not one of my aims, funnily enough.
I decided to tackle this head on with a pretty significant change; having no credit card anymore. For those of you who can’t see the big deal in this, or who are one of the sensible ones who pay it off each month. THIS.IS.MASSIVE. For me anyway. I’ve had a credit card since I was a student, 20 years ago. Over the years there’s been varying amounts, and varying numbers of cards. I’ve paid one off to get another, transferred balances, consolidated and danced around the issue. If I have a credit card I will use it.
I’ve told myself at least five times that when I have consolidated debts and therefore paid off my credit card, that I will just ‘use it for emergencies’ (Ha that old chestnut) Except an emergency to me is a 50% off sale at Dorothy Perkins. I need to get control of my finances, and that means my credit card has had to go. This is somewhat like losing a limb. My credit card has been there for me through the best and worse of times; to buy celebratory drinks, to buy petrol when I just didn’t have enough money left to get home, the dark time when I wasn’t paid enough to live on and had to use it just to get to the end of the month, to buy fripperies just because I could. You see I am an impulsive spender, and even though I have curbed this over the years with lots of techniques (more about that another time), I could still rack up a couple of hundred quid in ten minutes on some internet shopping ‘bargains’. I can easily convince myself I need another cardigan or a different pair of shoes, or that buying 10 items in a sale is an investment because they’d cost me twice as much elsewhere. Because it isn’t coming out of my bank account it hasn’t seemed a big deal. Until you realise the debt you consolidated into another debt is creeping up again ,and all that hard work you’ve done to pay off said debt is really just like peeing into the wind.
So I took a deep breath a couple of weeks ago when I closed my credit card down for good. This does not mean I am debt free sadly, but well on the way to this now all being well, with one debt, being paid off more quickly. It does mean I have lost all access to my impulsive spending. I do have some savings but I do not like to see them going down as my clothes pile goes up. This is obviously a good thing, but also somewhat distressing when I have convinced myself I need a new dress (you’ll see a theme here, I am pretty good about not spending on anything but clothes – see this post for more). This hurts. It is painful. I cannot just spend with abandon. I have to think about budgeting (which I do anyway but then the impulse credit card purchases come in) and I have to re-purpose what I have or make do.
Here’s some tips if you want to do the same (take a deep breath but do it anyway. It will be great for us in the long run)
- Ensure you have a proper budget before you start. You cannot run out of funds two weeks into your pay as you will have very little room for manoeuvre
- Move tempting emails into other folders by using filters. This is one I’ve mentioned before and which definitely makes a difference to impulse buying. I still want to get sale emails as I like a bargain but there isn’t the urge to buy as I view them later, and then I can make a more considered decision about if I need or want something
- Use a pre-paid card. This is something I am trying out at the moment. Have a look here for some advice on pre-payment cards. I have decided to use one because I am not great at spending. From a mindful perspective I am accepting this is a personality trait of mine and addressing it by using this pre-paid card. You load money onto it advance and then you spend it. (kind of like a reverse credit card). Some do have lots of charges when you spend money, or make a call to them, so read about these in the link above about best ones to use. I have found this works well as I have some money on there for impulse purchases, but it’s my own money! My long term plan is to built up this fund similar to have a credit balance on a card (it’s long term because right now I am spending what I put on there every month!)
- Cut up your credit card and close the account. I have so so so many times put my credit card in a drawer, or even cut it up but not closed the account. It can be so tempting just to use it for that one essential purchase and then away you go again.
- Make sure you have a back up fund. You can start with something small, this will be your emergency fund. We all have emergencies and this way you’ll feel reassured that if there is an expense you need to find, the money is there without needing credit.
- Make a plan for what you’ll do when you have no more debt. Will you travel more? Will you buy a new car? Put money together for a house deposit? Splurge on a much anticipated item? If you can set yourself a goal that will help you feel better about getting rid of your credit card, hopefully this will make it easier.
Good luck guys. We’re in it together. Have you got rid of your credit card? How’s it going for you? Do you have any tips?