When you’re young, you have the world at your feet. You’re single with no kids and no responsibilities. This is about the time you get introduced to credit cards and how they can change your life. If you’re a college student, you have probably walked past the guy or girl sitting at a table in the common areas, passing out applications for a credit card. They may even offer you something in exchange for filling it out. While credit can be a great benefit to you, you can get into debt quickly if you don’t manage it responsibly.
Free food is usually the hook for college students because banks know that kids in college are always hungry and always broke. They bait you with a coupon for a free meal in exchange for filling out the application. Building credit is great, but it can also cost a lot in interest payments. As an adult consumer, one of the things you must get a handle on is impulse shopping to avoid credit card debt.
I speak from the position of someone who has been there. I went through something similar after graduation. I had just graduated from college, and I was having a great time. I soon realized, though, that impulse shopping was taking over my life. I was spending money as fast as I could make it. And I was one of those that fell for the free food trap offered by the credit card company.
Rather than continuing down the path to debt, I developed a system to get a handle on my spending habits. I would decide if the item was something I needed, and if it was something I could afford, and if it could be purchased with the money (cash) I had with me. This system has worked really well for me, and I advise the clients who come to me for credit counseling to do the same.
In order to break that habit, you need to ask yourself some questions to determine if it is an impulse buy or something you need and would have bought anyway.
The 3 Step Process
Here is a breakdown of how this system works. When I see something I really want, like clothes, shoes, a new phone, a manicure or pedicure, I ask myself these questions. Take the time to answer each question. If the answer is yes, then go to the next question on the list. Any time the answer is no, stop right there and move on without purchasing.
Are all my bills and expenses paid? (rent, electric, water, tuition?)
Can I pay cash for the item? (Do I have enough with me?)
Will I still want this item if I wait until tomorrow?
If the answer to any of these questions is no, then this is not really something you need right now. As badly as you may want it, you really don’t need it, so realistically it can wait for a time when you have more money or after your other expenses are paid. If you still want the item after waiting two weeks, then, by all means, buy it.
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● Plan out your purchases
● Keep a list of the things you need
● Only buy what is on your list when shopping
● Make yourself wait two weeks to a month for impulse buys
We get caught up sometimes by thinking, “Oh, it’s so cute, and it’s only X dollars.” But that $5 or $10 adds up quickly and can put you over your budget. Impulse buying is made easier with the availability of credit cards. It is just so easy to pull out the card and defer the payment until later. And here is the kicker: student loans and credit card spending account for the highest percentage of debt in 18 to 24 yr old adults, according to this breakdown on debt-by-age on CNBC.ve
What I tell my credit counseling clients is that “you didn’t get into debt from impulse shopping overnight, and the problem isn’t going to be solved overnight.” Don’t give yourself a hard time over a weak moment at the “biggest shoe sale” ever in the history of shoe sales. Just decide that from now on you will try to be more responsible with spending and make better choices.
If you learned something from this post, please share it with your friends and family on your social media pages. Let me know if you have any questions or comments to share your thoughts or experience in this area. I would love to read your responses.
Until Next time