5 Keys To Overcoming The Urge To Splurge

Christmas Is For Debt?

Christmas will soon be upon us with all of the good cheer, family get-togethers and presents!

All of the big department stores are already in full-on Christmas mode, with aisles upon aisles of decorations in the front of the store and Christmas music pumping over the PA systems.  It’s hard not to get  into the Christmas spirit and spend, spend, spend!

Christmas time can be one of the most expensive times of the year, and a lot of people blow out their budgets trying to give each other a “nice Christmas”.  In fact, a Consumer Reports poll found that many people are still paying for last year’s Christmas bills.  if you do the math – that means approximately 12 million of us!:

Six percent of those surveyed are still paying off debt from last year’s gift purchases. If you do the math, that translates into approximately 12 million Americans who are in hock to credit-card companies for this reason alone.

This year, let’s try to be more responsible with our purchases, and think before we act and go into credit card debt.  In fact budgeting for Christmas expenditures earlier in the year is the best way to go.  Make it a line item in your budget!

credit: krisdecurtis

5 Keys To Having Power Over Your Purchases

Dave Ramsey suggests that you work on developing a “power over purchase”, and make better buying decisions. You can do that by:

1. Waiting overnight before making a purchase.  We often get caught up in the emotion of the moment, picture ourselves using the purchase, and how much it would make our life better.  Wait overnight and take some time to think about it.
2. Carefully considering your buying motives.  No amount of stuff equals contentment or fulfillment: A lot of times we buy things because we think it will make us look cool, or be a status symbol.   In the end things just leave us feeling empty.  Remember, you can buy fun, but you can’t buy happiness.
3. Never buying anything you do not understand: Don’t ever buy something without first knowing exactly how it works, what it does, and how to use it.   Don’t understand how that variable annuity works? Don’t buy it until you’ve researched it and understand how it works.  Too many people waste money on things they don’t understand, and will never use.
4. Considering the opportunity cost of your money:  Remember, if you spend money on that new car, you may look cool driving around, but you’ll never make back that $25,000 you spent on the car – which you could have invested in a good mutual fund and been appreciating, instead of depreciating.  There is an opportunity cost to everything you buy.
5. Seeking the counsel of your spouse (or accountability partner):  If you’re considering making a purchase, make sure to seek the counsel of your spouse or a trusted accountability partner.  Often they can tell you when you’re making a rash decision, and convince you to forgo a purchase.

Remember, when you’re making buying decisions, especially for items over $200-300, it can be very easy to become emotionally involved, and make rash decisions. Studies have found that most people actually have physiological reactions to when they’re purchasing something over $300. Their heart rates speed up, they get sweat on their upper lip, they feel nervous, etc. Keeping the above tips in mind will help you to overcome those emotional reactions, and get on your way towards a debt free new year in 2009!

He who is impulsive exalts folly.– Proverbs 14:29  (NKJV)

What do you think about Christmas debt?

Have you ever ended up paying your Christmas debt until the following Christmas? Do you think budgeting for the expenses may have helped you to avoid going into credit card debt? Are you making different Christmas spending decisions this year, or do you feel that Christmas is just too important to cut back on the spending?

Let us know what you think in the comments!