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‘Magic’ formula actually prevents empty pockets

Click here to read Trent Hamm’s reflection on what is really needed to exercise sound money management and prevent credit card debt. It’s called spending less than one earns, and one magic ingredient makes this recipe for success work. It may sound simple, but as Trent notes, it’s a lot harder to do.

(Photo by Daniel Moyle used under Creative Commons License. Thanks!)

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Back to the days before credit cards

‘IT’S PERSONAL’ BLOG –

For a week and a half my wallet was nowhere to be found, so I spent time in the financial reality I enjoyed in the 1970s, before ATMs made cash available anywhere at the touch of a button, and before credit cards were easy to obtain – or at least for me!

The loss of my wallet sent me hurtling back in time to those days. Now there are two things you need to know. First, I KNEW my wallet was somewhere in my house or church office, so finding it was just a matter of time. Second, I put a hold on my credit cards just in case.

Here’s how my buying behavior changed:

– I planned my purchases, and then followed through more exactly. For instance, in the grocery store I actually stuck to the things on my list. With my debit card in hand, I would have loaded the cart with stuff we’d “probably need eventually.”

– I was not tempted, as I usually am, to stop by some store just because I’m in the neighborhood. In my country town, for instance, there is no Home Depot or Dick’s Sporting Goods, so whenever I’m in a place that has one, I might just stop by. You know, just to see if there’s something we might want.

– I didn’t even think about going out and buying stuff that we didn’t absolutely need. If shopping meant a trip to the bank or depleting a finite supply of cash-in-hand, it had better be worth it.

The experience brought me back to those days when, if you wanted to have money on a Sunday night, you had to make sure to go to the bank on Friday. No weekend money meant limited fun on Saturday night. Impulse buying was limited by the number and denomination of bills in your wallet. No $10,000 credit card limit to tempt me.

After 11 days my wallet turned up (as I suspected it would) in some stupid place I had carelessly thrown it — on a chair next to my desk, where it was swallowed in a pile of stuff. I reactivated my credit cards, but I’m not eager to go back to my old habits, because here is the best lesson of all:

– I spent a lot less money than I would have otherwise.

(Photo by Carlos A. Martinez, used by Creative Commons license. Thanks!)