Control Your Spending

Let's learn how to control your spending.

If you are on my site, it means you are with the majority of the world. You don't have endless money to do what you want with. You have to make decisions about how you are going to spend your money. I call it control your spending, because you are in control! You might have a family that helps spend your money, but if you are reading this, you are probably the one in control.

If you came straight to this page from the internet, you might want to start at the beginning. You are on Step 3 of a 7 step debt management plan. Step one was learning about needs versus wants. If you don't have a firm grasp of this concept you might want to review it before you move on. Step 2 was learning about a family budget. I highly suggest you read this step before moving on.

OK, now that everyone is on the same page let's control your spending.

Some people are looking for credit card debt relief. I say the simple way to control your spending is don't carry a credit card! There you go, on to step 4. No, not really. Let's talk a little more about this.

I know a lot of people say I need to carry a credit card for an emergency, and I can understand that, what if your car breaks down, or who knows what happens. Have you ever had an emergency to use your credit card, probably not. And there are other ways to prepare for that.

First, see if your bank offers overdraft protection. Get overdraft protection on your checking account, preferably one that does not charge you transfer fees. You'll have to pay interest, but you'd pay that on a credit card anyway.

If you only carry your debit card with you, you'll think a lot more about how you spend your money. If you still can't control yourself, you might want to move to a more aggressive form, cash only. In the budgeting step I talked about an envelope budgeting system. The cash only plan includes only carrying the cash you'll need for the day.

A lot of people ask me, how to handle large purchases. Never purchase anything the first day you look into it. If you are thinking about that nice Flat panel TV, that's great. Do you have the money in your savings account? No? OK, then forget it. Do not buy that TV until you have the money in your bank.

What about 12 months no interest, no payment? Great deal right? Wrong! You still should not buy it unless you have the money in your account. If you have the money in your account and could pay cash for it, then you can buy it, and if you have your money in an interest earning account, which you should, then you can put the TV on that no interest financing, if and only if you have the discipline to mark that money as spent. And to pay off that bill before the due date.

If you don't have the discipline, don't buy it. Trust me, it will cost you. You'll end up buying something else with the money, and then get slammed at the end of the introductory period with the whole years worth of interest at 25% or some ridiculous amount of interest.

These are banks we're dealing with, they are crafty, smart people, they know how humans think. We want everything now, we don't want to wait. Do you think they'd give money away for free? No, they get some money from the retailer sure, but where they really make their money is planning on you missing the due date, and all that interest accruing to your account. Then once you're hit with that, you'll be buried and under their control!

Never carry department store cards with you! They will always offer you deals to open accounts, and use their card. That's because they plan on the back end interest payments. In step 5 I'll teach you the right ways to buy things. But for now, suffice it to say, don't carry what you can't handle. If you are an impulse buyer, and can never get out of the store with just your list, you need help!

You might have to go to the cash only plan, and only take enough cash to buy the items on your list.

You need to control your spending by buying less wants so you have the money for your needs. See how you need to have a grasp on a need vs a want? If you want a new TV, but don't have enough money to fully feed and clothe your family, you can't buy the TV, but it is your choice, you are in control of your spending.

Maybe if you are a read a real book kind of person you should check out my other recommended reading:

OK, if you need more help with ideas to save money every month, I'm going to refer you over to Oprah's debt diet plan. She has a great resource that I'm going to use rather than give it all to you here. See the link below and keep going! It will open in a new window, so you can come back to step 4 when you are done.

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Control your spending with Oprah's Debt Diet

Move on to Step 4 Smart Financial Decisions

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