Are You a Victim of Instant Gratification

                                                   

Do you use your credit 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 5 billion debit cards in use in the United States. There are over 1.4 billion credit cards in use in the United States. This signal a major shift in the primary form of payment for Americans.

It can be difficult to resist the temptation of the instant gratification culture of America. Retailers and advertisers make it so 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, overspend, damage their relationship with their bank and 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 10 ways to rein in your spending:

1. Create a budget. Create a budget to track your spending daily or weekly. Set aside a specific amount for extra things you want (wants).
2. 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. 
3. 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.
4. Pay your bills first. Put a portion of any extra money left over in a savings account.
5. Alternate payment. Use cash when making purchases. Use credit cards for emergencies.
6. Get a receipt. Get a receipt each time you make a purchase and keep it.
7. Retail therapy. Avoid shopping when you are emotional. This will prevent you from spending more than you have or buying unnecessary items.
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. Influences. Avoid spending time with people who love to shop. Avoid reading magazine catalogues, window shopping and watching shopping television channels.
10. Get cash. Go to the bank and withdraw the amount of cash you need for the week. Once you spend that amount, don’t money withdraw anymore or use your credit or debit card unless it is an emergency.

What Did You Buy Today - A Need or a Want

Advertisers make consumers believe anything can be bought instantly with the swipe of a credit card and lure consumers into store with false advertisements, sales and other gimmicks to buy things they can't afford or simply don't need. Most Americans buy more of things they want instead of more of things they need which leads to bad credit, late fees, bad spending habits, maxed out credit cards and filing for bankruptcy.

A need is something you have to have to survive – food, clothing (non-designer and shelter). A want is everything else, something you would like to have but don't really need. Create a list of things you buy and identify each item as a need or want. If you have more wants in your list then you need to change your spending habits and buy less of the items in the want column. Here are 5 tips to consider when shopping to help think in terms of needs vs. wants.

1. Do you convince yourself that the item you purchased is a need when it really is something you want?
2. Do you rationalize that you work hard everyday and deserve nice things and you should be able to buy whatever you want?
3. Do you buy an item with your credit card even though you know you don't have the money to pay the credit card bill when it arrives?
4. Do you go shopping with a credit card or with cash?
5. Do you buy more of things you want instead of things you need?

Buying more wants than needs can cause you to live above your means and leads to bad spending habits. Now is the time to develop good spending habits and reduce money spent on things you want. Buying wants should be done in moderation and only when you have the cash to buy the item. This will also help you to have a balanced budget. So, the next time you go into a store and pick up an item to buy ask yourself – is this a need or a want?