You want out of this mess? Promise, and follow
Q: I did it again. I spent too much on gifts this past Christmas and now I’ve just received my credit card statement. It’s going to take me months to pay it off and I don’t want to be in this same old situation next January. I promise you I’ll do whatever you say so this doesn’t happen again.
A: Don’t we all just hate it when we find ourselves making the same mistake over and over? But I think that’s the way the universe works: the same situation keeps showing up until we learn the lesson. I don’t think we mind when we make a mistake — the first time. We just rack it up to experience and get on with the show. On the other hand, when we find ourselves in an identical circumstance once again — one that we don’t like — we just shake our head at our foolhardiness.
Fear not, we’ve all been there. But smart folks check mark the lesson learned and off they go, knowing that it will never happen to them again.
If you find yourself in the same debt situation this January as in previous Januarys, and you don’t like it, then you just haven’t learned the lesson yet. You keep beating yourself up, but you never make the change required. In fact, you knew you were making the same mistake again right when it was happening, but you pretended it wasn’t, True?
You were shopping with your credit card, knowing full well the charges would appear on your statement the following month. You tried to fool yourself by thinking or hoping it wouldn’t happen but you know better.
So, let’s fix this immediately, and forever. But here’s the deal. You wrote that you promise me you’ll do whatever I say so it doesn’t happen again. However, I’m not the one who feels bad or the one who can do anything about it. So why don’t we rephrase your promise. Repeat after me: “I promise myself that I will never have credit card debt that I can’t pay off — in full
— as soon as the statement arrives in my mailbox.”
Let’s first fix the past error by getting last year’s credit purchases paid off lickety-split. You said it will take you months to pay this, so let’s set the date. For example, if it will take a few months, then how about choosing April 1, 2020? This April Fool’s Day will remind you that you don’t ever want to be foolish with your credit card again.
Now commit to paying off that credit card debt. Scrimp, save, do without, cut back, scale down, spend less, delay buying something, work some overtime. Figure it out. Anything at all to make that credit card bill go away. And know that you can make payments to your credit card at any time. You don’t have to wait for the next statement.
As soon as you have the cash, it immediately goes to your credit card balance. Soon enough, you will reach your goal and then you can prevent this from ever happening again.
The month after you have paid off your credit card debt — in this case, May 2020 — start a systematic savings plan for the coming season of gift-giving. Whatever amount is in this account come December 2020, that is your firm budget for gifting this year. With the emphasis on firm.
You are then free to spend all the money in your gift-giving account and without any negative feelings or having to fool yourself. Use it all if you wish, but not a penny more.
I promise you that your credit card statement of January 2021 — and for the rest of your life — can be opened with joy, instead of dread. Happy New debt-free Year!
Thie Convery, R.F.P., CFP, CIM, FMA, FCSI, is a wealth adviser in Dundas. Her column appears bi-weekly in The
Hamilton Spectator. You can reach her with questions at TheSpecMoney@gmail.com or by visiting ConveryWealth.com.