Avoid impulse shopping. Make shopping a planned activity with a list or a budgeted amount. Unplanned or impulse shopping may sabotage your spending plan / budget. If you really want to purchase the item, give yourself 24 to 48 hours to shop for a better deal, figure out if you really want it and can afford it. You’ll be glad you waited.
Avoid retail therapy. When you are emotionally down or distraught, avoid shopping or making any large purchases. We are less financially objective when our emotions cloud our judgment. Do something that doesn’t cost anything or very little, like go for a walk, spend time with family or friends, etc.
Avoid overdraft protection. Overdraft or “Courtesy Pay” will allow you to you overspend and charge you a fee for letting the debit card transaction go through. A fee of $27 up to $35 will be charged for every overdraft, even if the bill runs just $1 or $5 over the amount you have in your account. Some banks charge the fee if you're a penny over. Essentially, you're getting very short-term credit at effective interest rates that reach the high triple digits. Now was that cup of coffee really worth $40?
Avoid savings tampering. If you have to tap into your savings to make a purchase, you may not be able to afford the purchase. Establish a savings account that is not easily accessible with a certain amount directly deposited every pay period. Savings accounts are supposed to grow, not be chiseled away.
Avoid financial promiscuity. Financial Promiscuity is when we use unsecured revolving credit (credit cards) for small purchases when cash should be used. Avoid using credit to purchase that "value meal" or anything less than $50. This will ensure that we do not slowly acquire Financial STDs (Substantially Tremendous Debt).
Contact Madam Money for more helpful money and credit tips at www.TarraJackson.com.
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