Introduction
"BORROWING, LIKE SCRATCHING IS ONLY GOOD FOR A WHILE" - Jewish saying
Here I would like to explain in simple detail on why, when and how of credit card mismanagement. Most credit card debts are caused by uncontrollable behavior of an individual towards credit card spending. I would show you steps where one could take to stop this destructive behavior.
I have problems with my credit card spending and I have been doing some research on how I must stop this bad spending behavior. If you are like me and looking for a solution to this destructive behavior, I welcome you to read my blog.
Brain and Credit Card Spending
- Your brain steers you away from danger
- Your brain can lead you astray
- Hard to control your credit card spending
- People know they should control their credit card spending, but fail.
- We need to get to the root of the problem by understanding how your brain works.
Credit Card Lifestyle
- Credit cards are a ubiquitous feature of life for many of us
- Without a credit card, life can be a miserable process.
- Credit Card is a method of payment, convenience and a source of credit.
Credit Card Weakens Self-Control
- We have weaknesses and can easily be tempted to buy things we like.
- Credit Card is extra cash in hand (so to speak)
- Credit Cards can encourage you to spend more.
Credit Card as "Spending-Facilitating Stimuli
- Credit Card can affect the purchasing behavior of consumers
- Encourage consumer to purchase higher value items
Credit Card as A Tool for Convenience
- Credit card convenience can stimulate spending
Rational Thoughts
Often rational thoughts are words that we say to ourselves in our mind i.e. 'self-talk' and could lead to compulsive and impulsive buying. These are phrases like:
Summary of Our Rational Thoughts
Often rational thoughts are words that we say to ourselves in our mind i.e. 'self-talk' and could lead to compulsive and impulsive buying. These are phrases like:
- I must have this....., if not,.....
- The children need to have....., otherwise,....
- My girlfriend will want this....., because,.....
- My parents will be very happy if I......
We usually 'think' that the decisions and choices we make are the right ones, even though they could be difficult or painful financial resources. Sometimes, rational thoughts come from a mischievous 'inner voice;, a devil's advocate, which provokes us to spend. It may say "I must go to this fancy restaurant when I date this girl, if not she will look down on me and not be impressed."
Summary of Our Rational Thoughts
- We would like to think that we make rational spending decisions.
- Rational thought can become automatic thought and become a habit.
- Automatic rational thinking will cause you to be spending more stuffs than you ever wanted.
- Often our rational thoughts are words that we say to ourselves in our mind.
- These are phrases like: I must have this....., if not,...../ The children need to have....., otherwise,.....
Credit Card Mismanagement Themes
- Convenience - able to spend without cash and acceptable mode of payment everywhere.
- Motivational attitude to fulfil a psychological need - Leisure and lifestyle as wants, daily necessities as needs, unexpected situations, life changes and stages, career and business, family and relationship (buying that Tiffany bracelet foryour new girlfriend whom you want to impress)
- Credit Card Features that motivated the credit card usage: features of easy payment terms and
- conditions, reward for using credit card like discounts, etc.
Needs and Wants
There's lots of noise around influencing our spending decision-making processes everyday. But we have an inner voice that makes our final decisions. Unless we know exactly what to do, our inner voice can easily play the devil's advocate.
The advertising industry is built upon enhancing these "positive illusions" to the point that you take actions that you might otherwise not take.
Subconsciously, such messages actually affect our self esteem, and in certain cases, influence our ego. Often enough, without knowing it, we fall into the trap of being led by our ego. Maybe, we have discovered others who have the product which could result in envious behavior.
Getting to Know Your Needs
Getting to Know Your Needs
- We often find it difficult to find the difference between needs and wants
- There are many choices in life which may lead us to be confused wants as needs.
- If we are not careful to identify our "real needs", we may become a materialistic person and measure life's successes with the things we have and the services we use or enjoy.
- It is usually the wants that that fulfill the need that contribute towards a overspending behavior.
- Too often we fall into the trap of spending a lot of money fulfilling other types of needs like self-actualization, esteem, attachment and safety needs instead of survival needs.
When You Cannot Differentiate Between Needs and Wants
- You have a basic need to survive.
- Besides survival, you need to have a sense of security and to be physically healthy.
- You also have a social need in the form of love, a sense of belonging with people, relationships by affiliation with and acceptance by others.
- You also have self-esteem needs of achievement, respect, approval and recognition from people.
- I will term these needs as your 'real needs' based on Maslow's Hierarchy of Needs.
- It is understandable that, without these 'real needs' you may experience anxiety, depression, stress or helplessness.
- Your spending behavior is one of the ways through which you meet your real needs to enhance your self-esteem, ego and self-worth; to stop you from feeling helpless, depressed; to help you express your love to others; or to make others think or see you as an important and powerful person.
- You have to be sensible to balance your 'real needs' within your financial situation.
- Most of the time, you will use money or credit cards to pay for things or services, in exchange for the experiences or feelings (emotions) that fulfil your 'real needs'.
- However, you need to realize that when you do that, you may have a strong tendency to turn your desires and wants into dogmatic thoughts of 'real needs' which sound like this: 'I should', 'I must', 'I want', 'I always'.
Convenience Become An Integral Part of Life
- We are living a so call hectic lifestyle where out time is limited and we are busy day in and day out.
- Yet, we spend so much time on the internet, online games.We are not willing to spend time to cook our own meals, instead we order online or make telephone booking for pizza home delivery.
- We strive for a lifestyle of convenience at a price.
Do You Really Want It?
- A want is what you would like to have in order to fulfill your desire, fantasy, satisfaction, or peace of mind.
- You may also have a want because you are influenced by others, by your environment, or by a situation or event.
- We need a home, but want a prime location, we need clothes, but want a branded and fashionable clothes.
- Our wants changes as we go through different stages of life; from single to being in a relationship, from being a student to being in a working career.
- Be mindful that there are two types of wants: 'nice to have' and 'must have'.
- A 'must have want' is something that you want only after your need has been fulfilled.
- A 'nice to have want' is the 'desired want that you dont really need to have. However, this desired want can make you spend quite a lot of money.
- Is this purchase driven by a real need, a 'must have want' or a 'nice to have want'
- Do I already have what I need or want among my personal belongings, at home or somewhere else?
- Is this item that I'm going to purchase to replace something that has been damaged or lost?
- Would this purchase change my life meaningfully? How much will it affect my life positively?
- Can I afford this purchase?
- Can I delay this purchase?
- Is there an alternative way to spending that money, so that I can get it much cheaper or even free?
- Can I forego purchasing the item? If i forego it, what will be the outcome? Will I be happy? Or will I regret not having it.
When Needs and Wants Define Identity
In the eyes of society, the success and wealth, and thus the identity of a person are often represented by their possessions and lifestyle. In order to establish an identity as a successful person, people often choose to spend their money to fulfill their perceived need of having items that denote status. How else can we explain the number of expensive cars and branded shops we see today?
To a large extent, most people strive to create an identity or image that is perceived positively by others. Are you one of them?
ALWAYS ASK, DO I HAVE THE CASH
BE A RESPONSIBLE SPENDER, DON'T CAUSE INCONVENIENCE TO YOURSELF, YOUR FAMILY MEMBERS OR ANYONE AROUND YOU.
Technique To Delay Instant Gratification
1. Ask yourself if it is necessary to spend on something
2. Ask yourself whether or not you can afford it without the credit card.
3. Try to delay and take time to analyse your needs and wants.
4. Utilising the needs and wants analysis worksheet below:
BE A RESPONSIBLE SPENDER, DON'T CAUSE INCONVENIENCE TO YOURSELF, YOUR FAMILY MEMBERS OR ANYONE AROUND YOU.
Technique To Delay Instant Gratification
1. Ask yourself if it is necessary to spend on something
2. Ask yourself whether or not you can afford it without the credit card.
3. Try to delay and take time to analyse your needs and wants.
4. Utilising the needs and wants analysis worksheet below:
Column 1
|
Column 2
|
Column 3
|
Column 4
|
Items or services you want to buy
|
Needs
Nice to Have
Must Have
|
Priority Ranking
1: Highest
5: Lowest
|
Reason to spend and ideas for cheaper spending
|
Resistance Band
|
Nice to have
|
4
|
I felt that the resistance band
is the easiest in toning my muscle group.
I could instead use the
resistance band in the gym/ use the short resistance bank which is found in $1 Japanese store
|
Must Have Want and A Nice To Have Want
- A must have want is something that you want only after your 'need' has been been fulfilled.
- A nice to have want is the desired want that you don't really need to have.
- Anything that stimulates our brain pleasures through the five senses, we will want it.
Credit Card Attitudes
We fall into the trap of accepting credit card offers as new credit cards are often offered at a most appropriate time. Even if we don't need the card at the moment, subconsciously our mind tells us that we may need some extra cash someday and the credit card would provide us with the money. That's how we end up with a few credit cards in the wallet.
Rational Thoughts
We are fond of the notion that we are objective, rational, and logical with our credit card spending. Spend on needs and not wants, goes the saying. We would like to think we make decisions based on reasons and logic. But how many times do we actually spend wisely for our needs because of our rational thinking process.
Your Brain Is Not Who You Are (Your Inner Voice)
- The world's consumer markets are out there tempting us to spend these days. So how good is your self control?
- Our inner voice are always trying to influence our buying decision. Unless we know what to dom our inner voice can easily play the devil's advocate.
- Sometimes that little voice can lead you astray.
- We can be influence by: advertisements, your friends, magazines, movies
- We must be able to understand why and how our inner voice is being manipulated by external noises and messages.
Understanding Your Desire To Spend
Learning to control your spending habit is like weight management. The tendency to overeat is similar to overspend. You need to preserve, be discipline and put in a lot of hard work. The positive return of controlling your spending is having more cash in the bank, likewise being able to control your eating habits is having a better figure and a healthy body.
The initial step to making changes to our spending desires is to honestly take a look at ourselves and see who we really are. We need to examine ourselves. We need to know what triggers our spending habit.
Your Inflation Rate
There are many reasons to control your spending rate. A tendency to overspend could cause your personal inflation rate to rise. With an unpredictable market situation, one thinks he or she will make more money than their current spending lifestyle.
If their spending increases year to year, we call this an increase in personal inflation rate. If he or she earns more than their personal inflation rate, then it's okay, however, if their personal inflation rate is higher than their incoming income, then your purchasing power decreases and hence would lead to financial difficulties.
A higher or lavish lifestyle means a higher personal inflation rate. It is advisable to keep our personal inflation rate low.
The Birth of A Spending Desire and An Overspending Behaviour
Your desire to spend is due to fact that you believe that a certain product or service will meet a certain need, a want or fulfill an emotional need.
You need to be mindful that your desire to spend and overspend are the result of the combinations of the following:
- irrational thoughts
- belief system
- rationalization attitude
- emotional urges
- mischievous inner voices (self-talking)
- What is causing me to spend?
- Why am I spending more than I can afford
- What makes me not able to control my spending
- Can my spending behaviour be controlled
How Your Brain Creates Your Behaviour
1. A thought being created or memory being recalled in your brain.
2. Leads to an emotion being created inside you.
3. Based on the emotion, your brain makes a decision for an action.
4. Your brain sends signals to your body via your nervous system
5. Your body carries out and ACTION.
6. You EXPERIENCE the result of the ACTION
7. An EMOTION will be created from your EXPERIENCE of the ACTION
.
8. Your brain will save the EMOTION & EXPERIENCE as a THOUGHT or MEMORY in your brain.
Your Belief System - A Foundation Of Your 'Activating Events'
Your belief system is the actual set of precepts i.e. principles, values, teachings, instructions, rules or guidelines from which you live your daily life. These precepts govern your thoughts, emotions, self-talks, and behaviors which form your without these precepts you could not function.
It is the foundation of creating your 'activating' event. The belief system could be made up of the collection of life experiences, knowledge, crisis, values, observations and words - 'stuck' in your conscious and unconscious mind.
It is like having a memory bank filled with stuffs saved in your brain since the day you are born, and occasionally you will recall some of them.
Following are some examples:
'Life is short'
'I only live once;
'Money is power'
'Nobody cares for me'
'If I had more money, I would be happier'
For example if someone believes that 'life is short' he or she would tend to spend money lavishly now than safe for the future.
Having said that can you identify with your belief system that causes you to spend lavishly or have poor financial management?
Constantly review your belief system and refine your belief system to the life you want and your financial goals. You don't want to hang on to your belief system when in actual fact your belief system is destroying you.
7. An EMOTION will be created from your EXPERIENCE of the ACTION
.
8. Your brain will save the EMOTION & EXPERIENCE as a THOUGHT or MEMORY in your brain.
Your Belief System - A Foundation Of Your 'Activating Events'
Your belief system is the actual set of precepts i.e. principles, values, teachings, instructions, rules or guidelines from which you live your daily life. These precepts govern your thoughts, emotions, self-talks, and behaviors which form your without these precepts you could not function.
It is the foundation of creating your 'activating' event. The belief system could be made up of the collection of life experiences, knowledge, crisis, values, observations and words - 'stuck' in your conscious and unconscious mind.
It is like having a memory bank filled with stuffs saved in your brain since the day you are born, and occasionally you will recall some of them.
Following are some examples:
'Life is short'
'I only live once;
'Money is power'
'Nobody cares for me'
'If I had more money, I would be happier'
For example if someone believes that 'life is short' he or she would tend to spend money lavishly now than safe for the future.
Having said that can you identify with your belief system that causes you to spend lavishly or have poor financial management?
Constantly review your belief system and refine your belief system to the life you want and your financial goals. You don't want to hang on to your belief system when in actual fact your belief system is destroying you.
Your Habit Cycle In Your Behavior System
1. You experience an event, a feeling or a thought created in your brain.
2. Emotions resulting from the action will be stored in your brain via your nervous systems.
3. Your brain sends signals through your body's nervous system to create an action.
3-Sequence Intervention of Thought (3-SIT)
I have created an intervention process called the 3-Sequence Intervention of Thought (3-SIT) process to help you analyse the root cause of your thoughts and break the cycle habit.
Sequence 1
Identify and detect the causes of your thoughts.
Discover and explore your belief system or activating event that creates the thought or situations that cause you to spend money.
To be able identify and detect the cause of your thoughts, you need to identify the event, experience, rational or irrational thought that caused the bad feeling you have about your day.
Sequence 2
Discuss and debate the causation of the thought.
Once you have discovered the root cause of the thought, ponder it for a while, and question yourself logically about why you feel negative about the thought and how it makes you want to spend money.
Sequence 3
Differentiate the thought from emotions and make a choice.
When you take a moment to analyse your thought, you will be able to reason out the negativity of your thought by allowing your brain and body to analyse the negative feeling derived from your thought.
To differentiate the thought from emotions and make a choice, you need to differentiate between the emotion of feeling bad and a rational thought of feeling good and make a choice.
Identify Your Emotions
If you have difficulty identifying the emotions that trigger your thoughts to spend money, I have prepared a list of emotions below to help you to be familiar with the different emotions:
1. Fear
2. Happiness
3. Sadness
4. Stress
5. Friendship
6. Lack of confidence
7. Love
8. Envy
9. Competitiveness
10. Loneliness
11. Desires
12. Guilt
13. Pity
14. Anger
15. Excitement
16. Appreciation
17. Relationship
18. Jealousy
19. Achievement
20. Thrill
Do any of these emotions make you spend wisely or foolishly?
3-Sequence Intervention of Thought (3-SIT)
I have created an intervention process called the 3-Sequence Intervention of Thought (3-SIT) process to help you analyse the root cause of your thoughts and break the cycle habit.
Sequence 1
Identify and detect the causes of your thoughts.
Discover and explore your belief system or activating event that creates the thought or situations that cause you to spend money.
To be able identify and detect the cause of your thoughts, you need to identify the event, experience, rational or irrational thought that caused the bad feeling you have about your day.
Sequence 2
Discuss and debate the causation of the thought.
Once you have discovered the root cause of the thought, ponder it for a while, and question yourself logically about why you feel negative about the thought and how it makes you want to spend money.
Sequence 3
Differentiate the thought from emotions and make a choice.
When you take a moment to analyse your thought, you will be able to reason out the negativity of your thought by allowing your brain and body to analyse the negative feeling derived from your thought.
To differentiate the thought from emotions and make a choice, you need to differentiate between the emotion of feeling bad and a rational thought of feeling good and make a choice.
Identify Your Emotions
If you have difficulty identifying the emotions that trigger your thoughts to spend money, I have prepared a list of emotions below to help you to be familiar with the different emotions:
1. Fear
2. Happiness
3. Sadness
4. Stress
5. Friendship
6. Lack of confidence
7. Love
8. Envy
9. Competitiveness
10. Loneliness
11. Desires
12. Guilt
13. Pity
14. Anger
15. Excitement
16. Appreciation
17. Relationship
18. Jealousy
19. Achievement
20. Thrill
Do any of these emotions make you spend wisely or foolishly?
Get To Know Your Needs
THE MAIN PROBLEM WITH HUMANS ARE THEY WANT EVERYTHING INSTANT. THEREFORE THIS IS AN INSTANT SOCIETY. I WANT IT NOW!!! SPEND BEFORE THEY EARN.
CAN YOU DIFFERENTIATE BETWEEN A NEED AND WANTS
Have your temptation been affected by the never ending stream of news and endless advertisments promoting new products, fantastic prices and many multitude of choices? Does it seem that people are talking endlessly about the new product and you cam't seem to avoid the temptation.
We often find it difficult to differentiate between the needs and wants that are created for us, and those that we genuinely need. This confusion can impact our spending decisions, especially when we have many options that can fulfill our 'basic' and 'psychological' needs.
Much of this difficulty lies in our perception of what we believe is a need, and thinking that the good or service we are evaluating is needed. If we are not careful to identify our real needs, we may become a materialistic person and measure life's success with the things we have and the services we use or enjoy.
Exercise delayed gratification before the winter of our lives sets in.
We need to practice delayed gratification and pay yourself first. The ant did both and the grasshopper did neither.
CAN YOU DIFFERENTIATE BETWEEN A NEED AND WANTS
Have your temptation been affected by the never ending stream of news and endless advertisments promoting new products, fantastic prices and many multitude of choices? Does it seem that people are talking endlessly about the new product and you cam't seem to avoid the temptation.
We often find it difficult to differentiate between the needs and wants that are created for us, and those that we genuinely need. This confusion can impact our spending decisions, especially when we have many options that can fulfill our 'basic' and 'psychological' needs.
Much of this difficulty lies in our perception of what we believe is a need, and thinking that the good or service we are evaluating is needed. If we are not careful to identify our real needs, we may become a materialistic person and measure life's success with the things we have and the services we use or enjoy.
Exercise delayed gratification before the winter of our lives sets in.
We need to practice delayed gratification and pay yourself first. The ant did both and the grasshopper did neither.
Benefits of Delaying Instant Gratification
Always delay a purchase until you have sufficient cash.
Examples as below:
I have to..... because....
I should have ..... because....
I must have....because....
I ought to have.... because....
I need to have....because....
I want to have....because....
I would like to have....because....
Week 2
Change Your Spending Thought and Behavior
Step 5: Choose Not To Spend or Find Better Alternatives
This step will help you to either stop overspending, or find better alternatives that will cost you less money. There are two tasks for you to complete:
Task 1- Create New Spending Pattern:
a) Write down the action you took to control your behaviour, thought and emotions when managing your daily spending.
b) Take note of the occasions when you chose to substitute or replace a spending decision with a cheaper alternative, or when you chose not to spend at all.
c) Jot down the amount of money saved or not spent due to the action taken in (b)
d). Record your experience or feeling when you take both (a) and (b) actions.
Task 2 - Relook At Your Credit Card Purcahses
a)Evaluate each transaction and make a decision to either stop the expenditure or find a cheaper alternative to substitute it.
b) Take an in-depth look at your spending pattern in task 1 and task 2. Do you find it difficult to change your spending behaviour? Do you feel you are forced to make a decision to change?
Step 6: Change Your Belief System ie Uncover Your Real Needs
Sequence A: To identify consequences
If I don't...... then ...... (consequence)
Sequence B: To identify your primary and secondary emotions and your real need.
If I don't .....then I feel (primary emotion)
If I feel.....then I feel..... (secondary emotion)
If I feel....then I feel....(real need)
Once the real need is identified, you then have to take some time to evaluate the discovery and ask the following questions:
a. What can I do to change my belief system for the need to have a new hand phone?
b. To meet my real need, what alternative actions can I take instead of buying a new handphone?
Week 3
Make Your Choice
Step 7: Write your choice script
Choice Statement A
Use words like: I choose to....instead of ....
This is because....therefore....
Choice Statement B:
I choose not to....This is because
Step 8: Implement your choice script
Step 9: Thought -stopping technique
There will be times when you may experience difficulty in stopping your thoughts in spending money. This is especially when your spending behavior is caused by the need for instant gratification or when you remain in denial and tell yourself there is no need to change your belief or control your mischievous voice.
If this happens often enough, you will need a quick way of stopping those disturbing thoughts.
Step 9 Thought-Stopping Technique
There will be times when you may experience difficulty in stopping your thoughts in spending money. This is especially difficult when your desire for instant gratification or when you remain in denial you tell yourself there is no need to change your belief or control your mischievous voice.
if this happens on a consistently, you will need a quick way of stopping those mischievous voice. This is where step 9 comes in. This method requires you to place a rubber-band on your wrist. The next time you have a thought of spending money, snap the rubber band and shout "STOP"!. That's painful isn't it? That is an instant way to remind you the pain of spending money.
Week 4
Step 10: Write your spending philosophy
A philosophy is a belief system that crafts your viewpoints and attitudes towards your behavior. It is therefore important to have your own personal spending philosophy to help you manage your spending behaviour and live a financially healthy lifestyle, ie live within your means and not your credit card.
Let's face it: To live your lifestyle, you will need money. Are you moving towards achieving your own life mission, or a life mission that is defined by other people such as your family, spouse, loved ones or friends?
If you are living based on a life mission defined by other people, you are living just 'to keep up with the Joneses". You are not your natural self. It will come to a stage where you feel less of your natural self, and you will feel unhappy or depressed. In the process, you may be wasting your money and not achieving your true life mission.
Now let me show you a simple method to create your Personal Spending Philosophy to ensure that you will manage your monthly spending according to your life mission.
Step 11: Prepare your personal monthly action plan.
To help you write your personal spending philosophy, here are two questions to guide you:
to ask. What are the important values that you want for yourself in your life mission?
b. What are your new money beliefs that create these values in your life?
For example:
My personal spending philosophy for self is working hard to contribute to God, family and to society. I also believe in spending time with my loved ones as family is important. Therefore, I will need to practice delay gratification and move out from my comfort zone. It is important for me to also avoid the trap of materialism which could bring a burden to me and my family. I am living a simple lifestyle where I lead a frugal lifestyle.
Step 11 Prepare Your Personal Monthly Spending Plan
Your personal monthly spending plan is your daily spending plan for the next 30 days, based on your personal spending philosophy. You need to write down the amount of money that you have budgeted to spend each day, and the spending actions that you will take in your personal monthly spending plan.
At the end of the first 30 days, total up the amount of money that you have spent and compare it with the amount that you have budgeted for spending.
Have you over-spent or under spent your monthly disposable income?
Step-by-step Procedures For: Budgeting, Paying Off Debt, Negotiating Credit Card And IRS Debt Settlements, Avoiding Bankruptcy, Dealing With Collectors And Lawsuits, And Credit Repair - Without Debt Settlement Companies
Frugal Green Living
Today's world is a difficult and a complicated place to live in. As we go through life, we are faced with challenges such as failure in career, business or investments, debt obligations, family feuds, relationship issues or marriage failure, health problems, unexpected events and deaths. All this can cause financial stress which in turn affects a person's emotional, mental and physical health.
IF YOU WANT TO AVOID SUCH A NEGATIVE EXPERIENCES IN YOUR LIFE, ONE DEFENSIVE MECHANISM IS TO ADOPT A SIMPLER APPROACH TO LIVING; LIVE FRUGALLY AND AVOID WASTAGE, AND THUS SAVE MORE.
FOCUS ON LIVING LIFE WITH A PURPOSE INSTEAD OF SPENDING TIME, ENERGY AND MONEY ON BUILDING A LIFESTYLE THAT IS CONDITIONED BY CONSUMERISM AND MATERIALISM.
Top-selling Christian-based Finance & Debt Program Offering Industry Secrets From 40-year Banking And Credit Industry Veteran. Get Out Of Debt Forever & Unlock The Secrets To Financial Freedom.
- Delaying gratification is a choice
- You may be able to change your mindset and self-perception in buying something.
- You are helping to slow down the current high consumption rate of natural and economic resources.
- Prevent over-consumption. Over-consumption causes carbon emissions.
- You are taking your time to get the best deal on things that you buy.
Controlling Your Overspending Behaviour (CYOB Programme)
Carol Yip best selling author and financial planner has designed an effective intervention program that can help you change your thought patterns and regulate your emotions.
This program is for those looking to take control of their spending habit and reduce their credit card debts. However, to achieve success in this program, you need to be consistent in practicing the techniques in this program.
Carol Yip best selling author and financial planner has designed an effective intervention program that can help you change your thought patterns and regulate your emotions.
This program is for those looking to take control of their spending habit and reduce their credit card debts. However, to achieve success in this program, you need to be consistent in practicing the techniques in this program.
Week 1
Get to know your spending behavior
Step 1: Write your personal money journal for seven days
- The thought and emotion that led you to spend money.
- The nature of the purchase
- The amount spend in cash and credit card
- The thought and emotion that led you to spend money.
- The nature of the purchase
- The amount spend in cash and credit card
Step 2: Credit-card statement analysis
- Look at your credit card statements for the last twelve months
Ask yourself:
a. What makes me use the credit card
b. I use the credit card ...... because I felt.....
c. Ask yourself what motivated you to spend the money? 'I should', 'I must', 'I ought to',' I need to', 'I want to'
- Then write down next to the transaction the purpose of each transaction
a. Due to an event or an occasion
b. Due to a situation or circumstance
c. Made for a person, family, friend or acquaintance
d. due to habit, addiction or impulsiveness
f. due to an accident, emergency or unplanned incident.
- Analyse the belief, though or emotion that was created when you spend the money. Consider if the spending behavior could have been controlled by:
a. Making a choice to spend or not to spend
b. Changing your though or belief
c. Managing your emotions
- Look at your credit card statements for the last twelve months
Ask yourself:
a. What makes me use the credit card
b. I use the credit card ...... because I felt.....
c. Ask yourself what motivated you to spend the money? 'I should', 'I must', 'I ought to',' I need to', 'I want to'
- Then write down next to the transaction the purpose of each transaction
a. Due to an event or an occasion
b. Due to a situation or circumstance
c. Made for a person, family, friend or acquaintance
d. due to habit, addiction or impulsiveness
f. due to an accident, emergency or unplanned incident.
- Analyse the belief, though or emotion that was created when you spend the money. Consider if the spending behavior could have been controlled by:
a. Making a choice to spend or not to spend
b. Changing your though or belief
c. Managing your emotions
Step 3: Differentiate your needs, must have wants and nice to have wants statement
In all your spending, you are fulfilling either your needs or wants. Therefore, it is important that
you are able to differentiate your real needs from your 'must have' wants and 'nice to have' wants.
You can analyse each spending transaction by using the following worksheet:
Add up the total amount of real need, must have want and nice to have want. If the added total of must have want and nice to have want is higher than your real need, determine if these wants are created by impulsiveness, obsessions, cravings, addictions, urges, need for instant gratification or satisfaction, or illusions of real needs.
Step 4: Write your real needs, must have, wants and nice to have wants statement
Once you have differentiate between your real needs, must have wants and nice to have wants in step 3, try recalling some of your personal thoughts and self talk that goes something like this:
'I have to pay for my grocery bills because I need to feed my kids'
'I need to pay for my debts because the bank is calling me everyday for payment. I feel terrible each time I get that call'
'I ought to entertain my clients by taking them out for dinner and drinks because they have been nice to me by giving me business'
Ask yourself if these statements were created due to obsessions, cravings, addictions, urges, impulsiveness, your need for instant gratification, or an illusion of real needs.
Could it be your personal thoughts or self talk created from your past experience, influences, your belief or mischievous inner voice?
It is important to clearly identify the root cause of your spending pattern when you write down these statements because this will help you control your spending behaviour.
In all your spending, you are fulfilling either your needs or wants. Therefore, it is important that
you are able to differentiate your real needs from your 'must have' wants and 'nice to have' wants.
You can analyse each spending transaction by using the following worksheet:
Spending Transactions
|
Date
|
Mode of Payments:
Cash or Credit Card
|
Real Need
|
Must Have Want
|
Nice To Have Want
|
A new handphone
|
26 March 2015
|
Credit Card
|
RM 1,200
|
||
Hear Rate Transmitter
|
26 May 2014
|
Credit Card
|
RM 269
|
||
Step 4: Write your real needs, must have, wants and nice to have wants statement
Once you have differentiate between your real needs, must have wants and nice to have wants in step 3, try recalling some of your personal thoughts and self talk that goes something like this:
'I have to pay for my grocery bills because I need to feed my kids'
'I need to pay for my debts because the bank is calling me everyday for payment. I feel terrible each time I get that call'
'I ought to entertain my clients by taking them out for dinner and drinks because they have been nice to me by giving me business'
Ask yourself if these statements were created due to obsessions, cravings, addictions, urges, impulsiveness, your need for instant gratification, or an illusion of real needs.
Could it be your personal thoughts or self talk created from your past experience, influences, your belief or mischievous inner voice?
It is important to clearly identify the root cause of your spending pattern when you write down these statements because this will help you control your spending behaviour.
Examples as below:
I have to..... because....
I should have ..... because....
I must have....because....
I ought to have.... because....
I need to have....because....
I want to have....because....
I would like to have....because....
Week 2
Change Your Spending Thought and Behavior
Step 5: Choose Not To Spend or Find Better Alternatives
This step will help you to either stop overspending, or find better alternatives that will cost you less money. There are two tasks for you to complete:
Task 1- Create New Spending Pattern:
a) Write down the action you took to control your behaviour, thought and emotions when managing your daily spending.
b) Take note of the occasions when you chose to substitute or replace a spending decision with a cheaper alternative, or when you chose not to spend at all.
c) Jot down the amount of money saved or not spent due to the action taken in (b)
d). Record your experience or feeling when you take both (a) and (b) actions.
Task 2 - Relook At Your Credit Card Purcahses
a)Evaluate each transaction and make a decision to either stop the expenditure or find a cheaper alternative to substitute it.
b) Take an in-depth look at your spending pattern in task 1 and task 2. Do you find it difficult to change your spending behaviour? Do you feel you are forced to make a decision to change?
Step 6: Change Your Belief System ie Uncover Your Real Needs
Sequence A: To identify consequences
If I don't...... then ...... (consequence)
Sequence B: To identify your primary and secondary emotions and your real need.
If I don't .....then I feel (primary emotion)
If I feel.....then I feel..... (secondary emotion)
If I feel....then I feel....(real need)
Your Statement Of Real Needs, Must Have Wants and Nice To Have Wants
|
Sequence A:
To identify consequences.
If I don’t…..then…..
|
Sequence B:
To identify your primary emotion:
If I don’t…., then I feel….
|
Sequence B:
To identify your secondary emotion:
If I feel….then I feel….
|
Sequence B:
To identify your real need: If I feel….then I feel….
|
I should have a new handphone
because my handphone has a lot of dents and it’s a China phone and it’s not
3G. Also the camera is not so good anymore.
|
If I don’t have a new handphone,
then I could not take sharp and clear pictures to post and share.
|
If I can't take good pictures with my mobile phone, then I feel i could not show off to my friends.
|
If I feel I could not show off, then I would feel I am out of place and create some envy.
|
If I feel out of place, then I could not feel great in front of them.
|
a. What can I do to change my belief system for the need to have a new hand phone?
b. To meet my real need, what alternative actions can I take instead of buying a new handphone?
Week 3
Make Your Choice
Step 7: Write your choice script
Choice Statement A
Use words like: I choose to....instead of ....
This is because....therefore....
Choice Statement B:
I choose not to....This is because
Step 8: Implement your choice script
Nature Of Spending Pattern
|
Date
|
Spend, not to spend, recycle, replace, reuse, cheaper substitute or
affordable alternatives
|
Real Need
|
Must Have Wants
|
Nice To Have Wants
|
Stop the urge of buying
electronic gadgets like handphone.
|
13 April 2015
|
Keep using the old phone and stay
away from shopping mall.
|
1599
|
There will be times when you may experience difficulty in stopping your thoughts in spending money. This is especially when your spending behavior is caused by the need for instant gratification or when you remain in denial and tell yourself there is no need to change your belief or control your mischievous voice.
If this happens often enough, you will need a quick way of stopping those disturbing thoughts.
Step 9 Thought-Stopping Technique
There will be times when you may experience difficulty in stopping your thoughts in spending money. This is especially difficult when your desire for instant gratification or when you remain in denial you tell yourself there is no need to change your belief or control your mischievous voice.
if this happens on a consistently, you will need a quick way of stopping those mischievous voice. This is where step 9 comes in. This method requires you to place a rubber-band on your wrist. The next time you have a thought of spending money, snap the rubber band and shout "STOP"!. That's painful isn't it? That is an instant way to remind you the pain of spending money.
Week 4
Step 10: Write your spending philosophy
A philosophy is a belief system that crafts your viewpoints and attitudes towards your behavior. It is therefore important to have your own personal spending philosophy to help you manage your spending behaviour and live a financially healthy lifestyle, ie live within your means and not your credit card.
Let's face it: To live your lifestyle, you will need money. Are you moving towards achieving your own life mission, or a life mission that is defined by other people such as your family, spouse, loved ones or friends?
If you are living based on a life mission defined by other people, you are living just 'to keep up with the Joneses". You are not your natural self. It will come to a stage where you feel less of your natural self, and you will feel unhappy or depressed. In the process, you may be wasting your money and not achieving your true life mission.
Now let me show you a simple method to create your Personal Spending Philosophy to ensure that you will manage your monthly spending according to your life mission.
Step 11: Prepare your personal monthly action plan.
To help you write your personal spending philosophy, here are two questions to guide you:
to ask. What are the important values that you want for yourself in your life mission?
b. What are your new money beliefs that create these values in your life?
For example:
My personal spending philosophy for self is working hard to contribute to God, family and to society. I also believe in spending time with my loved ones as family is important. Therefore, I will need to practice delay gratification and move out from my comfort zone. It is important for me to also avoid the trap of materialism which could bring a burden to me and my family. I am living a simple lifestyle where I lead a frugal lifestyle.
Step 11 Prepare Your Personal Monthly Spending Plan
Your personal monthly spending plan is your daily spending plan for the next 30 days, based on your personal spending philosophy. You need to write down the amount of money that you have budgeted to spend each day, and the spending actions that you will take in your personal monthly spending plan.
At the end of the first 30 days, total up the amount of money that you have spent and compare it with the amount that you have budgeted for spending.
Have you over-spent or under spent your monthly disposable income?
Step-by-step Procedures For: Budgeting, Paying Off Debt, Negotiating Credit Card And IRS Debt Settlements, Avoiding Bankruptcy, Dealing With Collectors And Lawsuits, And Credit Repair - Without Debt Settlement Companies
Frugal Green Living
Today's world is a difficult and a complicated place to live in. As we go through life, we are faced with challenges such as failure in career, business or investments, debt obligations, family feuds, relationship issues or marriage failure, health problems, unexpected events and deaths. All this can cause financial stress which in turn affects a person's emotional, mental and physical health.
IF YOU WANT TO AVOID SUCH A NEGATIVE EXPERIENCES IN YOUR LIFE, ONE DEFENSIVE MECHANISM IS TO ADOPT A SIMPLER APPROACH TO LIVING; LIVE FRUGALLY AND AVOID WASTAGE, AND THUS SAVE MORE.
FOCUS ON LIVING LIFE WITH A PURPOSE INSTEAD OF SPENDING TIME, ENERGY AND MONEY ON BUILDING A LIFESTYLE THAT IS CONDITIONED BY CONSUMERISM AND MATERIALISM.
Top-selling Christian-based Finance & Debt Program Offering Industry Secrets From 40-year Banking And Credit Industry Veteran. Get Out Of Debt Forever & Unlock The Secrets To Financial Freedom.
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