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Dear Deborah,

I'm 27 and single. I struggle every month to pay my bills. I'm finding that my impulse buying is getting out of hand. I owe $6,000 on my credit cards, and I'm only making minimum monthly payments. I want to pay off my cards and start saving. What can I do to help control my spending? -- Eric

You're off to a great start by realizing you need to make changes in your spending. The first thing to do is stop charging on your credit cards. If you pay more than the minimum amount and yet continue to make purchases on credit, you're not moving forward at all.

Would you like to pay off your debts within a short time and get more joy into your life? Do you want to be a wiser shopper, spending only what is necessary?

Just ask yourself three simple questions before making your purchases. And you'll be surprised at how much easier it will be to control your spending.

Three questions to ask before spending your hard-earned money:

  • Is what I want to buy a need, a want, or a luxury?

Decide into which category your purchase fits. Be honest with yourself. It is easy to talk ourselves into buying something by saying that it is a need, but is it really? Why not pass up a frivolous purchase, and save the money instead?

Tip: When we develop an awareness of our purchasing choices, we spend our money more wisely.

  • Am I following through with my goals by buying this item?

Once we have set clear goals of what we want for our life now and in the future, it becomes easier every day to make buying decisions. We can be focused and deliberate about paying off our credit cards, saving for an emergency fund, and saving for the things we value even more.

Tip: We can learn to align our purchases with our personal goals. It will be worth it.

  • How many hours of my life is this purchase worth?

Let's say you're thinking about buying a new car for $20,000. You make ten dollars an hour. Is the car really worth 2,000 hours of your life? And remember that your actual working hours will be more than 2,000 hours if you buy that car on credit. You could find yourself paying for your new car and thousands of dollars of interest besides.

Tip: We can't get the time back that we spent earning our money. Our time is finite.

Eric, you've made a smart decision to put a halt to impulse buying. Carefully record your purchases every month, observing where you tend to spend frivolously. Pay off credit card bills as quickly as you can. Then watch your dollars grow in your savings accounts!

Copyright 2009 Deborah Nayrocker. All rights reserved. Permission to reprint required.

August 4, 2009


Deborah Nayrocker is the author of The Art of Debt-Free Living - Living Large on Less than You Earn and Living a Balanced Financial Life. Her Web site is http://www.artofdebt-freeliving.com/.