MoneyTalk

It’s time for a relaunch of the “just say no” advertising campaign of the 80’s and 90’s. This time, instead of empowering kids to stay away from illegal drugs with a catchy slogan and hints to overcome peer pressure, the focus is to inoculate adults from social influences and other temptations that continue the American epidemic of mindless spending and massive consumer debt.

According to the Federal Reserve, Americans now have outstanding credit card debt topping 1 trillion dollars, and according to a survey by Go Banking Rates, 69% of adults have less than $1,000 dollars in the bank. While unfortunate life circumstances can spiral our finances out of control, most often debt can be attributed to reckless spending from the drip drip drip of poor daily financial choices. There is no doubt that Americans are living well beyond their financial means. Whether it is because of greed, a feeling of entitlement, or just a cultural “eat drink and be merry” philosophy, it is time to take the “just say no to debt” challenge and rid ourselves of financial bondage.

Here are five simple ways to get your spending in control and alleviate debt:

1. Take the Credit Card Out of Your Wallet

We can’t spend what we do not have…well, at least if we don’t use our credit cards. While credit cards can be handy for travel expenses, various service transactions, and PayPal purchases, they shouldn’t be used for daily expenditures.  It is a bad habit and financially irresponsible to swipe a credit card at the check stand without feeling the weight of the purchase until the next billing cycle. There is no temptation to overspend when daily expenses are budgeted for, and paid for with cash. If you need to use a debit card, make sure to record every receipt and reconcile your spending with your monthly budget and bank statement. If you do have credit card debt, take a few minutes now to determine how long it will take to payoff your credit card with our pay down credit card calculator.

2. Allow for “Splurge Money” in Your Monthly Budget

Psychologists will most likely agree that telling yourself you can’t spend any money and expecting that to work is about as effective as trying to demand your mind to stop thinking about something – say, an elephant. The more restricted you feel the less likely you will be to meet your objective. Before you know it, an elephant has a cart full of merchandise and is headed towards a checkout stand! Be realistic about your spending and give yourself a set dollar amount in cash each month of “mad money.” This predetermined budgeted sum is money you are not accountable for to anyone. Whether it is $5 or $150 when the cash is gone, your splurge spending is too.

3. Wait 24 Hours to Purchase Anything Over $25

We have all had the experience of buyer’s remorse as the result of a purchase that wasn’t planned or even really wanted. As confirmed in a 2016 study conducted by shopper marketing agency, The Integer Group, American’s are indeed impulse buyers. According to that study, a shocking 90% of buyers purchase items which were not on their shopping list. With the psychological cards stacked against us, an easy commitment will keep you budget conscious and less likely to be an impulse buyer. Allowing yourself a 24-hour waiting period to purchase anything over $25 dollars gives your brain enough time to reset and think more logically about your potential purchase.

4. Direct Deposit Savings Out of Each Paycheck

Keep your savings out of sight and out of mind. If the company you work for uses direct deposit for your paycheck, you usually will also have an opportunity to split your check into multiple accounts. Having your savings allocated into a different account each pay period, preferably one that is not connected to your checking, will safeguard a portion of your check each month. This will decrease the temptation to spend what isn’t budgeted for while helping you to develop financial discipline. Having a savings plan can put you on the path for a financially sound future. Look at how quickly your savings can accumulate with our saving interest calculator.

5. Stop Comparing Yourself to Others

Unless your last name is Gates or Buffet, you will always find someone that has more money, acquired more things, or taken more vacations than you. Life is not a competition and while wealth can lead to opportunities, it doesn’t ensure happiness. Focusing your efforts on becoming financially stable and ready for retirement is much more likely to bring inner peace and happiness, then a doomed to fail effort to “keep up with the Joneses.”

As with anything requiring willpower and consistency, the more you “just say no to debt,” by keep your spending in check, the more financial discipline will become a way of life and a part of your character. Remember that a reputation and social status built on a foundation of financial and personal integrity is far stronger and valuable than one based on false pretense and debt payments with accruing interest.

What are some of the ways you have “just said NO” to debt?