Dear Aunt Sue, My credit card is repeatedly at its limit – it is really depressing me. I can’t seem to reduce it. What can I do?
Cynthia – Balwyn
Hello Cynthia
You are like so many others – credit card debt can really get you down. What can you do if your credit card has become a disaster zone so that you can barely bring yourself to look at your statements? Take it from me – cutting back on your spending – undertaking a spending diet – might be hard but it can be done. And it is every bit as rewarding as that other kind of diet, only this time, you will fit comfortably into your budget, although possibly not those skinny jeans from the year before last…
It’s Simple:
First, make a list of your Absolute Necessities, then shop around:
Needs such as rent, mobile phone plan, home utility bills. Then look for better deals. Ask your friends what plans they are on. Websites such as Compare the Market can help you sift through providers and find the best deal for you, including utilities and insurances.
Second, examine your Spending Habits:
- The cash that you can save by simply reducing the daily coffee shop hit down to a Friday treat, and taking a homemade lunch, can easily put a decent dent in your credit card debt. Don’t stop yourself from spending any money at all because that usually leads to ‘crash and burn’– instead, give yourself a daily or weekly ‘frivolities’ cash limit and also an event-based cash limit. $50 per week may well do it, once you try it out.
- Do you have certain spending weaknesses? (come on be honest… we all do). Work out a way to avoid your weakness by say, confiding in a friend and agreeing to call them when it strikes. Or avoid a certain shopping street; or don’t shop when hungry; or change up what you will do if emotion strikes! You Can Do This.
Third, the Spending Diet is about being creative:
Are you single living in a two-bedroom house? Start looking for a new place, or consider renting out your spare bedroom to make up some of your credit card debt.
- Invited to a wedding? Borrow a dress from a friend, check out an op-shop or local markets, or you can even visit boutiques that rent out their garments!
- Need to buy a gift? Utilise discount websites and coupon codes – make sure you shop around for the best price and don’t be afraid to purchase a cheaper alternative!
- Do you respond well to a challenge? Institute a No-Spending Week or even Month, perhaps with a group of friends and see who can spend the least, necessities aside.
The end goal of the Spending Diet is to say goodbye to your credit card. Take 30 seconds, now, and visualise what it will feel like to have the amount you usually put onto your credit card debt, available to use for other things – a holiday, a decent car. By sticking to your Spending Diet, you will be able to cut out your credit card and save yourself thousands. And take it from me… when you look at yourself in the mirror with a zero-credit card debt – you are gonna love what you see! Good luck Cynthia – I would love to hear how you go.
So until next time girls and boys, as always keep those questions coming in by visiting our Contact Us page.
And finally, a quote from Earl Wilson “If you think nobody cares if you’re alive, try missing a couple of credit card payments.”
Have fun and keep smiling – Aunt Sue
