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The average credit-card holding household in America has a little over $8,000 in credit card debt. Meanwhile, the Economic Policy Institute estimates that the average wage worker is making about $40,000 a year. That puts the average household credit card debt at nearly a quarter of many household’s annual income after taxes. Those are some scary figures, but if you have a bit of a shopping problem, sometimes there’s value in a little scare.
If you carry a lot of credit card debt, there can be this constantly looming feeling that what is yours isn’t really yours. The items you have aren’t entirely paid off. The money you see in your checking account isn’t entirely yours – somebody is coming for a lot of it. It’s an unfortunate way to live. It can be suffocating. And while pulling back on spending can’t fix all of a person’s financial problems, it’s a start. And there are life-long benefits of developing healthy spending habits. Even if you’re fortunate enough to win the lottery one day, if you have bad spending habits, you’ll lose even those tremendous earnings. So, on that note, here’s how to stop making excuses for purchases you shouldn’t make.
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Ask: is it an appreciating or depreciating item?
Any time you want to spend money on something, ask yourself if you’ll ever see that money again. In other words: is this an item that will appreciate, so you can sell it? Or only depreciate? Can you get anything out of it, ever again? Very, very few items appreciate. Most cars lose much of their value the moment they leave the lot (unless you collect rare, vintage vehicles that sit untouched in your garage). Most fashion items plummet in value instantly (unless some celebrity signs them). Focus on funneling your money into only appreciating items, and you’ll suddenly find that not many things fit that description.
