Credit cards and “buy now, pay later” programs can easily tempt anyone to use their credits without a second thought. “Retail therapy” is also another concept that tends to justify out-of-control spending habits, enticing many consumers to buy unnecessary items to ease their stress. So, how do we know if our impulses to spend are still healthy?
If you’ve been overusing your credit cards and repaying only the minimum amount, then that’s the first sign that your shopping impulses are turning into a debt addiction, which is bad news. We all know where a mountain of debt can lead us. In case you already find yourself in a sticky situation, then the most feasible way out is possibly the help of a skilled bankruptcy lawyer from Salt Lake City or any other location.
Filing for bankruptcy is disheartening, but it would be your chance to start all over and improve your spending habits. That said, here are the signs of debt addiction and how to reduce your impulse-buying habits.
Debt Addiction Warning Signs
The average adult in the U.S. has an estimated $38,000 in personal debt, and that figure doesn’t even include mortgages. On top of that, 2 in 10 Americans are found to use 50%-100% of their monthly income to repay debts. If all your hard-earned money just goes to your lenders, then you should definitely consider making some amendments to your lifestyle.
The first sign of debt addiction is the one previously mentioned: habitually paying only the minimum of your credit card bills. This practice ends up costing you more because you pay the maximum amount of interest. If you have several credit card debts and you deem yourself skilled at juggling your balances, that’s the second sign. Balance transfers are meant to pay down your debt and not sustain it.
The third sign is depending too much on loans. You’ll never be able to save if you constantly borrow to sustain your needs. Another sign is always taking your loans’ maximum term. This reduces your monthly payments, but at the expense of more interest payments over the loan’s term duration.
If you also use credit to purchase luxuries, that’s another telltale sign, because luxuries like gadgets and vacations are just short-term fulfillments. If you’re still paying for them long after you’ve “gotten over them”, then your finances can be at peril.
Controlling Unwise Spending Habits
Don’t wait until you’re at the verge of bankruptcy. Reduce your impulses now while you’re still fully capable. It starts with a simple brainwork: knowing the tricks of retail stores. “Sale” signages, “buy one, get one”, placing necessary products at the far side of grocery stores, and so on. These are the tactics of retail companies to make you spend more, so practice overcoming them. It would help to make a list and sticking to it to avoid temptations.
Use mobile apps that track your expenses. They alert you when you overspend and even check your credit score, which can surely convince you to reduce your excessive shopping. If you face another temptation to buy something, take some time to think it over first; you’d be surprised how much an urge can quickly fade away. When reminded of “retail therapy”, pause and be aware of your mood first. Shopping is a good mood booster but so is talking to a friend or taking time to rest.
And when you decide to shop, leave your credit cards and strictly pay in cash to be certain that you’re only buying what you can afford. Avoid people who’ll push you to spend more; instead, try cheaper or free activities such as walking.
Most importantly, keep your eyes on your goal: to be debt-free and financially independent. Your dreams can be a great motivator in managing your finances better, so use them to stay grounded.