What's a Little More? Debt, I Mean.

Well, I’m knee deep in holiday expenses:  gifts, travel and entertaining.  It is so easy to spend "just a little more."  A nicer bottle of wine for a hostess gift, another present for the in-laws, stopping at Applebee’s instead of packing a cooler when you are driving.  What’s another five (or fifty) dollars here or there?

For many people (myself included), these little things can wreck a budget.  If you are not in debt, those extra expenses can push your budget out of whack.  And if you are already in debt, it doesn’t seem to make much difference.  If, for example, you owe $2,000 in credit card debt, another $20 doesn’t seem like much of a difference.  It’s only 1%! However, if you are making the minimum payments, that $20 will be haunting you for years to come – long after the hostess has consumed the wine, the in-laws have finished with their gift, and certainly long after you’ve digested that Applebee’s.  Do it a couple of times, and you may have tacked a few hundred dollars onto your debt.

So, how do you stop that kind of thinking?  It isn’t easy, that’s for sure.  Here are some strategies that may help you:

Define a pretty big financial goal:  "I want to be free of credit card debt before our next PCS."

Make a visual:  A big chart on the wall with your debt numbers should keep you honest.

Calculate: what you will be able to do with the money that
you’re currently spending on debt repayment.  What would you like to do
with an extra $200 a month?  Maybe you could save for a new car, or
start an Individual Retirement Account, or order pizzas on Friday
night, or let your child take horseback riding lessons.  Imagine what
your financial life would feel like with that extra chunk of money
available each month.

Think back: to how you got into debt in the first place.  I don’t imagine that many of us woke up one day and discovered that we had $10,000 in credit card debt.  Your first card probably had a low limit, and you charged a little, then you paid a little.  Over time, the charging was a bit more than the paying, and your balance crept up.  I bet if you went back over your charges, most of them were small.  Individually, not much money, but collectively, it sure is a lot.  If you are in debt, and feeling the weight of the debt each day, then imagine how you would feel if you had twice as much debt.  (Shivers!)  That’s a pretty good reason not to add to your debt.

It’s good for your marriage!  Statistics show that a huge chunk of maritial problems are based around money.  Marriages are hard work under the best of situations, and military marriages have extra excitement:  deployments, moves, injuries, and general worry.  Keeping your finances under control will be one less stressor in your marriage.

I’m going to try to avoid those impulse purchases this month, and even see where I can make a few cuts.  Won’t you join me?

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Rick P

    You need a Total Money MakeOver (TMMO)!!!
    Check out Dave Ramsey’s book, “My Total Money Makeover”. It’s changed my life, and I’m not kidding.

  • Thanks for the suggestion, Rick. I am quite a fan of Ramsey’s book – it’s here on my post about Top Ten Personal Finance books (https://paycheck-chronicles.military.com/2008/11/top-ten-favorit.html.)
    Hopefully your recommendation will encourage others to read it, too.
    Thanks for stopping by the Paycheck Chronicles.

  • Kathleen

    We’ve gone to the “strictly cash” plan. With our larger balance ccards, we’ve been paying minimum due + whatever interest for that month + AT LEAST 3-5% more. Sure, it can be a long process but we’re whittling down the debt slowly but surely.
    While it’s not easy, we’ve had really great luck planning ahead for PCS moves. Stashin’ a small percentage of the paycheck into “The Move Fund” has given us a good cushion for all those incidentals that always come with moving. With this latest move, we stashed what we knew would be deposit refunds, from utilities and cable, into that fund ahead of time. Nickel and dime deposit refunds add up!
    Love your stuff, Kate! Keep writing!
    Kathleen from Carlisle

  • Wendy Gee

    When spending gets out of control (ex: when the credit card cannot be paid off monthly) it is better to tighten the reins by going to a cash allowance system at least for a period of time. Less money is spent if you watch it leave your hand, knowing a finite amount is available for the week. This method is not effective for bill paying but works well for discretionary spending.
    P.S. Great advice Kate, especially in these trying economic times!