This week has given me that “back to school” feeling I always had in Septembers growing up. After an awesome Labor Day weekend, summer is officially over (well, socially at least). My online class is back in session, the weather is a bit cooler, I’ve started creating my fall work schedule and I’m starting to wonder where in the world my fall boots might be.
Since this year is flying by, I took a minute to review my 2010 goals to make sure I’m on track for the home stretch of 2010. The document which contains my 2010 goals also contains my 2008 and 2009 goals- all of which start with, “pay off credit card completely!” And what is step one to paying off a credit card? Stop using it.
I stopped using a credit card in February of this year. And then I relapsed in April. And then again in July (This time it was because of my love affair with Filene’s Basement and TJ Maxx. Note to self: buying deeply discounted merchandise almost every day doesn’t count as a sale. And at some point, BOGO sales are no longer effective either).
The funny part is that I could teach you the math behind how credit card companies make money. I was trained on this at my 1st job after college. Most credit card companies compound interest daily and before you know it, you are being charged interest upon interest at ridiculous rates. If I know how credit card companies are charging me interest then why am I still relapsing when it comes to being “credit card free?”
I’m very aware of my bad habit of emotional shopping. Some of you eat when you are feeling stressed or sad. Some of you run marathons or sleep a lot. I shop. One tiny sale item at a time. I don’t buy Prada bags, fancy shoes or plane tickets. Instead, I get caught up buying a lot of little things that are “on sale.”
I’ve asked my boyfriend Thano to remove credit cards from my wallet and keep them until they are paid off. This only leads me to ordering replacement cards. Which, naturally, leads to me yelling at Thano for doing his job. Nice girlfriend I am, right?!
Last week I cut up the last credit card I had in my possession and told Thano to cut up the one he had in his possession too. I’m starting over again on my journey to credit card “sobriety.” There are only 4 months left in 2010, and I want to live them without a credit card.
In order to do this, I must consider a few things:
- It’s time to follow the HALT principal – Do not shop if you are hungry, angry, lonely or tired (this tip comes from a strategy that is said to be used in AA.) In my case, I shop when I am bored and when I don’t have a project outside of work (time to get blogging!).
- Find out why I feel I “NEED” to go to Walgreens RIGHT NOW (there is one on every corner) and buy a new lip gloss, another lotion and a candle. Because I know I don’t need new lip gloss. And why the urgency?
- Stay far, far away from Ann Taylor LOFT. Because it is across the street from my office. And because they are always having some kind of 40% or 50% off sale that lures me into buying several non-sale items. I find myself justifying purchases by thinking something like, “well, it’s ok because these are work clothes. You have to look good at work. This is part of your personal brand.”
- I need to get uncomfortable. “Get comfortable being uncomfortable” is my motto for 2010 yet I haven’t applied it to this little addiction. It’s time to allow myself be uncomfortable by saying NO. You will not die because you didn’t buy new zebra print towels at TJ Maxx. Yet, I don’t often let myself leave the store disappointed.
I’m sharing these confessions with you because I know a majority of you has struggled with credit cards at some point in your life too. As much as I joke, I’m very lucky that my spending isn’t as major as it could be. My credit score is over 800 and at this pace I’m debt free within the next few months (if I stop swiping that is!).
I know many others aren’t as lucky. Most people struggle with spending because they aren’t willing to talk about their spending habits or debt. Avoidance seems easier, right? So they hide their ”addiction” and their problem becomes worse and worse.
I’d love to have your help and I’m sure others would too. Please consider- anonymously if that’s more comfortable- responding to these questions to cultivate a support system.
- Have you struggled with credit card “sobriety”? How did you quit?
- What tips do you have for those who are struggling with over spending?
- If so, do you have an accountability partner? What role do they play?
- Would you ever consider joining forces with a group of local women who also struggle with over-spending?
- Do you consider yourself unable to handle even one “swipe” the way an alcoholic may not be able to handle even one drink?
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If anyone can relate to where you're at in your career, it's Nicole Crimaldi: Nicole spent 5 years in corporate America, switched career paths, worked at a start-up, survived a layoff and is now self-employed. Nicole believes that career satisfaction is a huge part of overall happiness. Therefore, she started Ms. Career Girl to help other women get off the treadmill and onto a more fulfilling path.
{ 16 comments… read them below or add one }
Thanks for sharing on this important topic. Not only can building a new life be expensive, surviving as a young professional or in between jobs (as many Americans do) can take a toll on credit and debt.
There was a year that my husband and I lived off credit cards after going from a six figure income to a meager five figure income. When our debt got to an unbearable point, we completely changed our lives. Sold our cars, rented out our house, moved to France, and saved every single penny to pay it off (no dining out, owning no car, and paying everything with cash) – all while job hunting and building my own business. Proud to say that in one year we paid off all our credit card debt and live without that monkey on our backs- and with an unblemished credit record, to boot. When I coach clients who experience similar whoas, I can honestly say, “I’ve been there!”
It helps to have a committed partner/spouse who is as equally disciplined and focused as you are. Knowing that someone is counting on you to be on track is a great morale booster. Now, we’re planning our next international vacation and our relationship has never been stronger.
Thanks again!
-Leslie
Wow Leslie. I had no idea that was your story. More Americans need to hear your story! When I went to Europe (which is when I was 14) the first observation I came back with (as a 14 year old!) is that they have a few really really nice things, whereas American’s have a LOT of cheap stuff. In other words, I felt Europeans valued “quality over quantity.”
I’m not blaming anyone but myself for having this huge draw towards shopping BUT, I do hope in the future the laws and regulations in the United States change to tighten consumer credit. So many young adults are choosing not to move forward with their lives or take career risks because they are held back by debt.
When I worked as a sub-prime lender in 2006 it was clear that credit was way too easy to get and that people were signing themselves up for disasterous financial situations. There is a huge lack of financial education here and aside from that we need to focus on the psychological aspect of overspending and taking on debt.
Perhaps you should write a guest post about this here! I’d love to hear more abotu this topic from someone who has really been there.
Thanks so much for commenting as always!
Nicole
Nicole,
You’re right… many French people have less of the nicer things partially apartments are so small, they wouldn’t have any place to put their things!
I have a 75 m2 apartment and my friends – who are well off – always say, “Wow! It’s so big!”
We don’t use our credit cards anymore. Only for emergencies and if so, we automatically pay it off. Overspending and spending in general is a huge problem that, as you hit on the head, affects young professional’s career prospects. This whole debt thing has become a natural way of American life.
I’d love to contribute some day. We should chat about content ideas.
Warmly,
Leslie
For the longest time I never used a credit card. I actually made it until my sophomore year of college before ever signing up for one. Then I caved, then I spent too much…you know the drill.
In January of this year I paid off my debt in full (amazing feeling, by the way). And haven’t looked back. Yes, I still use credit and believe in using credit as a means to build…credit, but the one thing I’ve done since is only spend within my means. I never want my debt to be beyond what is in my bank account – and I pay things off almost (if not always) immediately.
Build credit, get your points, and pay it off. Interest is the devil. I know debt is unavoidable when purchasing a house, a car, etc – but for ‘smaller’ purchases I refuse to get myself into trouble with moolah.
You and I have talked about this – maybe I’m smart, maybe I’m just frugal. Either way, being debt-free is the way to be. Yes, I’m also a rhyme master.
Hello Mr. Nashville!
I didn’t start using a credit card until after college graduation, but it didn’t take me long to pick up a very bad habit.
And yes, in order to increase your credit score you must have credit history and a record of timely payments. This is why I use an AMEX- My Zync card requires me to pay the balance in full each month. I feel this is a good way for me to start making a new habit of paying things off in full each month (and redeeming mega points which will come in handy for Chirstmas gifts!).
Staying out of debt should be really really simple: always spend less than you make!
A very big congratulations to you on paying off all of your debt! Hopefully I will be writing a post about that in 2011!
Nicole
Hi Nicole,
Great topic and very important too. First off: don’t give up if you relapse. It’s just a small step back!! Eventually you will manage!
So to get to your questions:
* Have you struggled with credit card “sobriety”? How did you quit?
No, luckily where I live (in the Netherlands) credit cards are not that commonly used as in the US but still are a problem here as well, I do have (had?) an issue with buying ‘cheap’ offers and crap basically
* What tips do you have for those who are struggling with over spending?
I have become much more considerate towards the ‘background’ of the products I buy. I now know now that pretty much all cheap products are made by children or women basically held captive somewhere in an Asian factory.
And cheap make up: it’s cheap because usually it has a lot of bad chemicals in it. It might sound annoying but once I started being interested in this topic I started noticing how much aweful things we can buy!
I spend the afternoon strolling through a massive shopping mall in Lille and yet did not buy anything. I felt bad because I didn’t buy anything yet I feel good that at least I didn’t buy something made by children.
Sometimes I do fail of course, when the dress or shirt is just wayyy too cute but still I avoid lots of clothing and make up this way.
* If so, do you have an accountability partner? What role do they play?
I wish I had more people sharing this feeling with me!
* Would you ever consider joining forces with a group of local women who also struggle with over-spending?
No, but I doo read about it online
* Do you consider yourself unable to handle even one “swipe” the way an alcoholic may not be able to handle even one drink?
No, luckily not.
Hey Wendy,
Thanks so much for sharing your thoughts! You bring up another good point on how credit varies from country to country. In some countries “credit” isn’t an option at all. In others, it’s somewhat of a disgrace. In the US, it seems to be a social norm- and one that probably shouldn’t be.
For the credit cards that ARE available in the Netherlands, what types of rates and credit limits are there? I have a feeling the rates and limits are much lower than here in the US.
You definitely got in my head about cheap chemical-filled makeup when I read your comment yesterday. I’m trying be more aware of this and to get away from food and products that are so chemically-based and made by children in sweat shops. Your comment was a good reminder about that (sometimes I forget about this when it comes to makeup!).
Thanks again for commenting!
Nicole
I have managed to live without a balance on my credit card after paying it off about a year after I got it (right after college, when I needed it to purchase lots of apartment items and before I was getting a paycheck). I still shop, but never to the point where I can’t pay it off every month. Pretty much made up my mind not to spend past that limit, and it’s been working well for me.
In your case, since you recognize you have this shopping weakness, I wonder if it would help to set aside a small budget for fun purchases, and maybe take that amount out in cash every month. Then you know how much is available, and can still indulge in a bit of spontaneous shopping here and there – without using your credit card at all (I’d recommend continuing to keep them OUT of your wallet!).
It’s like the dieting tips that suggest leaving room in your “calorie budget” for a small piece of chocolate every day; that way you don’t feel so super restricted by the diet, and hopefully prevents over-indulging. Just a thought! Good luck!
Eileen,
Great suggestions. There’s no doubt that I struggle with over-spending the way others stuggle with over-eating.
Hmm good idea. Since impulse buys are what ruins me, I think having that fun cash would put things into perspective.
Another tough one is saying no to social outtings which you know are out of the budget. Any ideas on that one?
Nicole
Stay far, far away from Ann Taylor LOFT. Because it is across the street from my office. And because they are always having some kind of 40% or 50% off sale that lures me into buying several non-sale items. I find myself justifying purchases by thinking something like, “well, it’s ok because these are work clothes. You have to look good at work. This is part of your personal brand.”
<—- I am very guilty of this. I am definitely the type that shops for fun, or wanders into new stores JUST TO LOOK, then I end up buying one or two items before I know it.
Work clothes from Banana Republic, Jacob and other brands here in Canada are major culprits for me as well.
Yes! In fact, when I go to a store, I usually feel like I am “sneaking” because I know I shouldn’t be in there! I always find things that I suddenly “need” that I never thought of before. And this time of year is the worst because the season is changing and when I pull out my old clothes I’m not a huge fan and want to replace them! BAD!
Nicole
So I actually just read this article and then immediately logged into my credit card account to check my balance! I have also been guilty of throwing my credit cards around but have recently been fortunate to have a boyfriend that will take them out of my hands when I come up with ideas like, opening a tab at a bar for me and all my friends. I agree that many people (young adults especially) are never really taught how credit cards work, and how “the credit card company will always win”. In reality credit card companies are not in business to “help” their consumers. It seems to be an endless battle, as I attempt to use my card wisely, but then seem to always have a tight month and then struggle to pay off all my debts for the next 6. I enjoyed your article and found it very entertaing to read, while confronting a real issue! I hope that more young adults get the advice and guidance they need before following in our footsteps! ha! But until I manage to fully control my weekend spending habits..I may be just the person to hang with! Open bar on my capitalone card is a strong possiblity.
Hey Jocelyn!
Glad someone around here has dealt with these things too!
I learned my lesson about “going out” shortly after moving to Chicago (a city which practically revolves around the bar and restaurant scene). I usually bring a pre-determined amount of cash out and when it’s gone it’s gone. No credit card.
I also do this because I’ve had my purse stolen at bars a few times while turning my head, so carrying less info around is much easier to cope with in that event.
Drinking is definitely the biggest waste of money out there. Although everyone needs a good night out once in a while, it’s too expensive in many ways even beyond financially.
Thanks for being so open!
Nicole
I used to do the same thing. I would go overboard buying things that were on sale. I eventually started buying things only because they were on sale even though I didn’t love the item. I would end up buying clothes that I thought were kind of cute and on sale but a couple months down the line I wouldn’t wear them. Now I try to only buy things that I rate an 8 on a scale of 1-10 regardless of how inexpensive the item is.
Nicole.
There’s nothing quite like seeing your bank account balance dwindle to zero literally and being forced back to your parents’ house at the age of 31 that will make you rethink your spending habits. I had $2000 in credit card debt and I didn’t even reopen my Amex account after I paid it off. It’s funny but I realized how much crap I was buying that I don’t need once that happen. The key for me came down to one thing. Anytime I thought about buying a bigger ticket item I would ask myself “do I absolutely need this?” I buy these shirts from this store called English Laundry. Each one is about 100 dollars but I buy one every year on my b-day. A few weeks ago I was in the store with my friend and there was one that I loved. I debated and realized if I wanted it, then I was going to save cash for it before I bought. BTW, I know you are a big Ramit fan and here’s one tremendously valuable thing I learned on how to save and still buy everything I want.
Let’s say you want to buy something. First realize sale are complete bullshit. Everything is always on sale and it will be again. So let’s say you want to buy some new Ann Taylor stuff. Setup an ING account for Ann Taylor purchases. Every week automatically throw 30 dollars into it and forget about it. Two things will happen. You’ll probably lose the desire to make that purchase once the money is saved up. Even if you do want to make the purchase it’s justified since you have the money saved up. I have subaccounts for every purchase I want to make. I have a vacation fund that automatically gets 25 bucks a week. At the end of a year it’s about 1000 dollars for my travel related fun
. Anyways, some food for thought. If you wan to chat more about this hit me on skype and I can tell you how I overcame some of this. I used to be constantly spending on toys most of which are in a landfill somewhere.
im feeling it