With Christmas coming up you may be worried about heating up your credit card.
If you want to start the New Year fresh and out of debt here are 5 ways to avoid using your credit card.
Get bills sent to you
Much to my annoyance some companies now will only except direct debit payments to avoid people not paying their bills. If you only have this option make sure you use your savings account rather than your credit card.
If you have an option of being sent your bills do this. That way you can pay from your direct debit account and it will help you with your monthly budgeting.
Dollars as calories
I have written about this concept before which comes from financial author and blogger Jean Chatzky. This is probably going to work more for women than men who tend to go on diets more and count calories of their food. The trick here is to start thinking about every dollar being spent in the same way as you count calories.
Chatzky reckons you will then start to see the fat in your spending making you more aware of the dollars leaving your wallet.
Leave the cards at home
Similar to freezing your credit card in a glass of water, if they aren’t there you can’t use them. This probably will not work for people with little self-control like myself so if you have a strong moment hand the cards over to your partner or trusted friend (just make sure they don’t have a spending problem too).
I used to always give my credit card to my husband and if I needed to use it I explained to him what for and handed it back afterwards (not in a weird 1950s backwards male/female relationship way, he did the same to me!).
Build a nest egg and cut them up
The best thing to avoid using your credit card aside from not having one it to stop using it. If you cut them up they no longer can be used. I wouldn’t do this straight away. I would build up a small savings stash of at least $1000 just in case you have an emergency.
Using an online savings account which is separate from your regular bank accounts is a good idea. I have a Ubank account which I keep my stash in and if I need it I have to transfer it to another bank which takes at least a day. This will help you starve off impulse purchases. I am also earning interest whilst it sits there.
Only spend what you can afford
I know this is common sense but none of us do it. I have a friend who goes out splurging on designer clothing on her credit card. The weird thing is that her black singlet that cost $300 looks the same as my target $20 one. The difference-she has $40,000 worth of credit card debt.
Whether you have told yourself you would do it before or not you need to work out a budget and stick to it. Those extravagant purchases will feel so much better if you are using your own money than a credit card. You may not be able to afford those things now (in fact you have to face the reality), but later on when you are debt free you can work out how to enjoy it.