Monday, August 11, 2014

Are You Addicted to Instant Gratification


Do you use your check card or debit card to make all of your purchases? Have you stopped carrying cash? Do you feel lost without your credit card or debit card? You are not alone.  There are over 520 million debit cards in use in the United States.     

It can be difficult to resist the temptation of the instant gratification culture of America.  Advertisers make it easy for consumers to buy everything instantly by creating online shopping, instant cereal, instant coffee, instant meals, text messaging and the ability to make credit card or debit card purchases anytime anywhere.  Most Americans buy an item immediately when they see it either in a store or online.  This bad habit has caused many Americans to overdraw their account, pay overdraft fees, spend more money than they have, damage their relationship with their bank and may lower their credit score.

Some advantages of using a debit card:  it is easier to obtain versus a credit card, can be used in place of checks, accepted everywhere, transactions can be made quicker and can be used to get cash from an ATM or retail store that offers cash-back during a purchase. The disadvantages of using a debit card are:  you can spend more than you have in your account; you can incur overdraft fees and can become a victim of identity theft.  Here a 9 ways to rein in your spending and stop being addicted to instant gratification:

  1. Pay your bills first. Put a portion of any extra money left over in a savings account.
  2. Alternate payment.  Use cash when making a purchase.
  3. Get a receipt. Get a receipt each time you make a purchase and keep it.
  4. Track spending.  Take all of your receipts from your credit card or debit card purchases and put them in an envelope.  Use pen and paper, an Excel spreadsheet or a software tool to track spending.   
  5. Wait.  Wait a few days before making a purchase that is more than $50.  Go back to the store to see if you still want the item. If you still want the item, comparison shop to see which store offers the best price.
  6. Retail therapy. Avoid shopping when you are emotional.  This will prevent you from spending more than you have or buying unnecessary items.
  7. Create a budget. Create a budget to track your spending daily or weekly.  Set aside a specific amount for extra things you want. 
  8. Leave at home.  Leave your credit card or debit card at home unless you know you will make a purchase. This helps to reduce the temptation to make an unnecessary purchase.
  9. Get cash.  Go to the bank and take out the amount of cash you need for the week.  Once you spend that amount don’t get out any more money or use your credit or debit card unless it is an emergency.

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