Having my credit card in my wallet makes it easier to make purchases. Not that I’m struggling with finances. I have a good handle on my spending and I pay my credit card off each month. Taking my credit card out of my wallet and using cash means I evaluate each purchase and I spend less. This makes me feel better. My bank account is healthier and I’m happier.
So, if you worry you’ll be too tempted to pull your credit card out when you see that amazing shoe sale, I suggest putting your credit card on ice. Literally.
Put your credit card in a glass of water and freeze it. You’ll have to defrost your credit card if you want to use it. That will buy you some time to re-consider if you really want to make the purchase on your credit card and break your vow of a credit-card-free month.
Why am I suggesting putting your credit card on ice?
One of the biggest reasons people find themselves struggling with finances is their level of debt.
Research tells us that the average Canadian owes more than $20,000 in consumer debt. That number excludes the amount you owe on your mortgage. Together, Canadians owe a massive $1.5 trillion. Wow.
You might not find it surprising, then, that research also tells us 51 percent of Canadians are living pay-cheque to pay-cheque.
How did we get into so much debt?
The Habit of Overspending
It didn’t happen overnight. But it did happen because of a series of small and not-so-small decisions to spend more than you earn. Over time, you created an overspending habit. Now, you’re struggling with finances.
I get it. I’m a natural spender and when I didn’t know how to manage my money well I overspent. I used excuses like, “I work hard, and I deserve it.” When you have children it’s even easier to over spend because it’s no longer about you but about giving your children opportunities.
I know how easy it is to slip back into a spending and shopping habit. The holiday season is a perfect example. We go out more, we buy presents and we may even have costs associated with traveling to visit family. All-in-all it adds up to spending more money. Spending money in and of itself isn’t bad: it’s spending more than you planned, more than you saved and more than you’ve earned.
I did save up and spend more for the holidays. But, I don’t want the spending habit to continue in January. I want to get back into the habit of being intentional with my money. This means, for the month of January, if I’m going to spend money personally I’m going to have to use cash.
Put your Credit Card on Ice
If you’re struggling with finances and are concerned about your spending, this might be the perfect opportunity to shock yourself into some different behaviour. After all, some 40 to 45 percent of our daily decisions are not actually decisions at all but habits. If you want to start taking better care of your money, you’re going to need to change your habits.
So, the credit card goes in the glass of water, into the freezer, and literally on ice. If you really struggle with the idea, maybe it’s time to look at why taking your credit card out of your wallet for a month is so difficult for you. It’s likely tied back into one of your earliest experiences with money. Think back. What was your first experience with money, and how might it be affecting your money habits today?
There are lots of good reasons to use our credit cards when we make purchases, particularly if we pay it off each month, like earning air miles or protecting our purchases.
But, if you want a different outcome, why not join me for a credit card free month? On ice!