You are struggling with credit card debt, you’re probably already aware of the pitfalls of impulse shopping. A new, lighthearted ad from Interac Debit, poses the challenge of living within your means from a comical point of view: what would happen if your dog had a credit card?
The ad follows the story of a dog who shops ‘til he drops and is then faced with huge bills he can’t pay. While the ad is amusing, it makes a good point: spend within your means and you can be in charge of your finances. However if you let your spending get out of hand, your finances will end up controlling you.
If you are having trouble keeping a lid on your spending, then adopting a cash only lifestyle is your best bet to get rid of debt for good.
“Credit cards are an excellent financial tool when they are used responsibly. However when it’s- for immediate gratification that’s when debt troubles will emerge,” says Jeff Schwartz, executive director, Consolidated Credit Counseling Services of Canada.
Here are some tips on how to commit to cash and have success and get rid of debt for good:
Clean out that wallet
It’s time to take those cards out of your wallet, and put them away for emergency use only. If you can’t completely cut the urge for plastic, replace your credit card with your debit card. It’s as convenient as credit, but the amount is finite, much like the cash you see in your wallet. Just make sure you include that spending in your budget.
The envelope please
Set your monthly budget and then take out cash to cover the allocated spending. Put the money in the envelopes and mark them for their intended use. Spend from there- and when it’s gone, it’s gone.
Be strategic with your cash
Wherever possible, request smaller bills. It’s easier to be more exact with your spending. Another trick to getting the most out of your available cash? Accumulate coins you get as change. It’s still money!
Ask for receipts
One of the benefits of using a credit card is that your spending is tracked. You can still do that with cash, but you need to get in the habit of asking for receipts. Set up a system to file them to track your spending.
But don’t I need a credit card sometimes?
You may be thinking that you still need a credit card in today’s online environment for renting a car, booking a hotel room or buying a plane ticket. There are alternatives. You can use a Visa debit card, linked to cash in your bank or you can use a secured credit card instead.
If you are accustomed to buying what you want, when you want, the thought of parking that plastic may send cold shivers up your spine. As dramatic as your response may be, the positive impact that living within your means will be just as dramatic. To get started, call one of our trained credit counsellors or check out our free online debt analysis.