Jan 4, 2012

New year: new spending habits

According to the U.S. Federal Reserve, the median household debt is estimated at more than $200,000. How did we get there? As it turns out, school loans and houses are quite expensive...but the third biggest reason for debt is credit card spending. We, as Americans, have a LOT of credit card debt.

When you're shopping, how much easier is to buy something if you whip out your plastic? A 2000 MIT study showed that people at an auction were willing to pay twice as much for something when they use a credit card instead of cash.

If you want to cut back on your spending in the new year, here's something to try. Use cash when you shop. Instead of making most of your purchases using your credit card or even your debit card, get your weekly budgeted money out in cash and put it in your wallet. 

There is something more real about handing over dollar bills and coins; you have a baseline for how much you have and how much you have left. With a credit card you are spending imaginary money that you can't see or even have...it only lives in your card. It's easier to spend that imaginary money, so much so that we can easily forget that we don't even have it at all.


Just a note - this is my 100th Thrift World post! Thank you to all my readers for your eyes and support. And hey, don't be afraid to leave a comment every once in a while.  I know so many of you have thrifting tips of your own that could benefit many others, so if you have some, please share:)

1 comment:

  1. Anonymous12:50 PM

    but, money IS imaginary

    ReplyDelete

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