Staying out of debt is difficult. Terribly difficult. It isn’t made any easier if you rationalize yourself into debt, either. Many of us spend a good deal of our time and energy trying to get out of debt, and stay out of debt. We do that through so many devices, and each have our own system that helps us along the way. Budgeting is obviously a big tool that many of us use to make sure that we have enough money to pay the bills, and ourselves at the end of the month. We figure out how many months it will take to pay off this debt, or that debt, and then budget out that amount over that many months.
Many years ago, I spent a few years working as a salesperson at a retail store where bigger ticket items were popular. Computers, televisions, and cell phones were big sellers, and good for commissions. As part of our training for our jobs, we were trained on the many ways to sell a customer on the item they were looking at, and even how to convince the customer that they needed the upgraded item. One of those sales tactics was to help them rationalize the purchase. And, chief among the ways to do that was to take the price of the item, break it up over a set amount of months (24, 36, 48, 60) and tell them how much they’d be spending “a month” for the item. Suddenly, that $2000 computer (it was that long ago) becomes a $25 a month purchase. Psychologically, people are more likely to purchase something if it’s under $100. Even if that “under $100” is in the form of a monthly payment for several years.
Salespeople are the only ones we have to watch out for when it comes to this tactic in particular. Pay special attention the next time you’re looking at purchasing something. See how many times over the next month, you attempt to rationalize a purchase based on what it will cost per month on credit over what the total price will be. I think you’ll be surprised just how often you use that same sales tactic on yourself.
Don’t rationalize your way into debt. Fight back, and stick to your guns. That purchase has a total price. And if you’re buying it on credit, that price will be far larger than if you had purchased it with cash. More importantly, don’t saddle yourself with more debt just because the “monthly” price is more palatable.
2. Create a payoff plan. With your budget (you do have a budget, right?) and a calendar in hand, determine exactly how much you can send to your credit card each month or with each paycheck. If possible, set up automatic payments to the credit card for the day you receive your paycheck so you don’t even have to think about it. And to keep yourself motivated, start a debt payoff thermometer on a whiteboard or 