Thursday, September 11, 2008

No Credit for Me (at Least for Now)

The funniest thing happened last night – for a min, I actually forgot my budget and started shopping before thinking about it. I’ve been meaning to pick up some new makeup and I popped into CVS (I had planned to go to Sephora, but it was an impulse thing). I went and picked out a few things. Then, I remembered. I’m pretty much out of cash till payday (tomorrow) and I wasn’t going into my slush savings for makeup. Oops! Glad I remembered BEFORE the purchase.

This is a good exercise in impulse control. Before I buckled down and started to clean up my act with credit cards 4 years ago, I would just buy stuff (on credit) when I wanted it with no heed to when I got paid or how much I really had. This is inconceivable to me now, but I know that’s just what I did.

Since finishing off with my debt payments, I’ve had a feeling of having more money than I used to. It’s true and it’s not. For me to not go crazy, it’s important to have an automated savings program that takes out the cash on payday so I don’t see it in my balance. Otherwise, I’ll find a million and one reasons to spend it. That’s why I prefer to still operate down to the very bottom of my checking account balance each pay period. Telling myself that I’m keeping $100 as a base level doesn’t work. I’ve tried. I find something “very important” to spend the money on. I need to let myself go down almost to zero because I’ll do that anyway. I might as well have already taken out my savings first. And since I’m so methodical with my tracking, I have not bounced anything in recent memory (knock wood!)

Having to stop and think about a purchase is a good habit. I do have a slush savings account at B of A (about $100 right now) that I use for little overages, if I want. Transferring funds to checking is really easy and I can do it several times a month with no fee. But it’s a stopping point – is this purchase something I have to have right now? Is it worth taking it out of savings? Sometimes, it is and I just do it. But other times, I realize that the purchase is something that really could wait. And often, having to wait a few days allows me to reevaluate whether I really need it or not. Or, I wind up making a more informed choice. In this case, I’ll just wait for the weekend and maybe go to where I really wanted to get my makeup anyway, Sephora.

This experience is reinforcing my decision to not try to dive into the realm of using a rewards credit card any time soon. The security of continuing to follow a plan that works for me is enough. It far outweighs the risk of falling into old bad habits. That little mental hiccup last night reminded me how easy it really is.

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