Maryland Debt Consolidation-Home Equity Loans in Maryland

If you could imagine for a moment that every time you approach a gas pump or grocery store check out counter, the receipt given to you for what you bought has an additional twenty to forty percent surcharge on it. You would quickly discover how difficult it would be to survive financially. That surcharge is reality for you if you frequently put your regular living expenses (like gas or groceries) on credit cards. When I suggest to someone not to use credit cards, sometimes they say they’re not sure how they would survive if an unexpected expense arose and they didn’t have the cards to fall back on. My answer is: if you weren’t paying an additional twenty to forty percent surcharge to your current credit card issuers, you’d have savings to fall back on. The fact is, it’s a vicious cycle and if you’re reading this right now, you probably already know. This article is not about telling you something you already know. In fact, my entire website is aimed at making a permanent shift in your conscious. All people read articles that get them in the mood to do good things but moods come and go. Lasting change can only come from a realization that the way you are currently doing something is wrong. This realization is called a permanent shift.

Here is my challenge. For the next thirty days, I’d like you to not use your credit cards at all (that includes not using debit cards). Before you stop reading and throw up your hands, I’ll ask you to trust me enough to finish this article. I’ve issued this challenge many times in the past and it’s usually a real eye opener. However, in some cases people were not in a financial position to fully experience the lessons that come from the challenge. Usually their reasons are that they lack the cash flow because there excess cash is what’s being used to make the minimum payments on their existing credit cards. If this describes you, read on. I have a suggestion that will allow you to experience this same challenge to its fullest even if you lack the cash flow.

This exercise is aimed at renewing your relationship with money by opening your eyes to the actual outgoing cash that is leaving your net worth forever each month. During this exercise, as the cash leaves your hand, you may start to feel some resentment about how you have been spending this money month in and month out. The fact is, you may have been letting go of this money on a regular basis in return for a product or service that you’ll soon discover was not as fulfilling as you thought in the big scheme of things.

Study after Study has shown that most people are much less likely to buy, or less willing to spend as much, when paying with cash. In fact, I find that most people who try this experiment tell me it has changed their spending habits permanently. I’ve even had a woman tell me she gave up drinking Starbucks products in the morning which not only saved her money, but I am sure attributed to a healthier lifestyle too. Each morning for many years, she was spending about 6 bucks on a coffee product and snack. When she stopped swiping and started paying cash, she said she was actually insulted that they were taking that much money from her in return for the product she was getting. If you haven’t already run the numbers, let me save you the time, its $2,190.00 a year. That’s insane.

Here is a reinforcement of the rules. No credit or debit card usage for 30 days. If you need cash for the items you usually buy like groceries, gas, coffee, dining out, movies or anything else, go to the ATM and take the cash out of the machine and carry it with you. There are no exceptions. I did have a woman who went through the 30 day challenge and said that during the 30 days, her and her husband bought an $1800.00 TV and that was really the only time she bent the rules and used plastic. I told her it was also the only purchase that would have taught her the lesson. I asked her to imagine going to the bank and withdrawing eighteen crisp one hundred dollar bills and then carrying them into Best Buy to hand over to the pimple faced kid at the checkout counter. She immediately got it. There are no exceptions because each person will experience there own “Aha” moment that will come from a different product or service they would normally use plastic for.

If you are unable to take the challenge because of cash-flow issues, there is another way to take the challenge. Before I tell you what it is, I’d like to remind you that if your cash-flow is restricted because of your minimum payments due on existing Credit Cards, you probably need this challenge more then anyone. With that being said, you have a lot more to look forward to in the way of change. Here’s how to take the challenge. Pick three things that you normally charge on a regular basis. Small ticket items will due. Depending on your budget, a small ticket item could be anything from $5.00 to $75.00. I would prefer you pick purchases that are recurring items that will show up at least 8-10 times over the course of a month. Daily coffee, dinner or drinks out with your friends, movies or movie rentals, groceries etc. With that in mind, the rest of the rules stay the same. No exceptions once you pick the expenses and agree with yourself that they will be cash only transactions. If you don’t have the cash, go to the ATM.

A lot of people can’t finish this challenge. The negative aspect of the challenge that I am frequently told is that when paying with cash, the happiness or excitement that was previously there turns negative with the realization of how much more they are spending then they earn. The true impact on a persons conscious that should be had when overspending is deadened by the fact that they cannot feel what is being spent when they just swipe a card. Once they experience the negative feeling of the physical cash leaving their hands a couple times during the first week, they quit. I have learned that a lot of people would rather be debt ridden and happy then to make a solid plan. If you find yourself feeling this way, it may be time to reassess where your happiness comes from. Some people learn that a great deal of their happiness is derived from spending on “things.” When this happens, it is necessary to step back a make a solid plan to insure the spending isn’t out of control and more importantly, that you make room in your life for other sources of fulfillment. More on this subject can be found in the left menu under The Psychology behind your Spending.

When Warren Buffett (the richest man in the world) was recently asked: …if he could give one piece of advice to the next generation of this country on the subject of finances, what would it be? He said to stay away from Credit Cards. I’d say he knows a little bit about finances, wouldn’t you?. Remember that it’s mathematically impossible to say that credit cards make life easier when they make everything you buy way more expensive.

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