Addiction of any kind is no joke. Alcoholism and drug addiction can be personally debilitating and greatly affect friends and family members. Gambling and sex addiction can also be serious. And while some may scoff at the notion of debt addiction, it’s the real deal and can have a ripple effect on who it harms.
If you recognize these habits as your own, you may want to reevaluate your spending and develop a healthy debt repayment method that works for you. Choosing a debt snowball or debt avalanche method can help you get on the right track to paying down your debt. But if the issue has gotten beyond a DIY repayment plan, you may want to enlist the help of an organization like Debtors Anonymous.
1. Making impulse purchases
Inherently, impulse purchases aren’t something you budget for. And if an item isn’t in your budget, there’s a good chance you’re relying on your credit card to pay for it. Of course, adding a can of Bubly while you’re checking out at the grocery store is a bit different than getting sucked into a “deal” on the latest iPhone.
Take a look at your credit card statement and do a quick inventory of your spending habits. If you’re consistently overspending on non-essentials, you should consider creating or reworking your budget. And next time you go to swipe your card, take a beat to see if it’s something that fits into your budget. Some experts even recommend sleeping on it: if you still want—or need—the thing 24 hours later, have at it. But chances are, the time to think it over will help you distance yourself from needing it.
2. Spending as a mood booster
Do you get a little bit of a high every time you swipe, tap, or insert your credit card into a credit card reader? There’s no shame in retail therapy, but if you’re consistently regulating your emotions by shopping, that can be problematic, especially if you’re relying on credit to do it.
One way to curb this is to only use cash. When you pay with cash, there’s a physical and emotional connection, as you’re actually watching the money leave your hand. And even if you pay with debit, seeing your account balance drop can have a similar effect.
3. Relying on balance transfers and 0% APR financing
Using an introductory offer on a balance transfer credit card or other 0% APR financing options can be a savvy way to save money on interest and streamline your debt. But if you’re constantly finagling your accounts and robbing Peter to pay Paul—i.e., paying off one credit card with another credit card—you’re probably going to be trapped in the debt addiction cycle for life.
Instead of delaying the inevitable by pushing off interest payments, try cutting back on your card usage and paying off your balances with cash. Similarly, instead of financing a major purchase, like a new smart TV, save up in advance so you can afford the gadget outright. It might hurt now, but it’ll pay off in the long run.
If you or someone you know is struggling with debt addiction, Debtors Anonymous is a 12-step recovery program for those looking to end problems and suffering caused by the cycle of unsecured debt for themselves and the people around them.
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