Sunday 24 March 2013

Keeping it frugal...

I have allowed credit card debt to get out of control before and I find myself in the same position again - luckily I know how to solve the problem, sadly I lack discipline once the hard part is over and show a tendency to relapse...
The last time that this became an issue for me, I was tracking my credit card balances on a spreadsheet with graphs to give a visual indication of the debt reducing. It is significant when going over these spreadsheets to bring them back up to date, that when I stopped monitoring on a monthly basis is exactly when the debt started to rise. The conclusion is of course that the monitoring works as a tool to bring down debt - many people do not monitor their debt effectively which is why there is so much debt about.
I must resolve to continue the monitoring of debt even when I think I have it under control, one problem is that the monitoring is manual - I need to manually link the end of month figure into the spreadsheet, if there was an effective way to automate this procedure, I reckon this would help to resolve the problem of losing focus on the debt graph. In fact I reckon if I could work this out, I should probably make the resulting spreadsheet readily available to anyone who needs help in tracking their debt....
Basically, implementing frugal living starts with perception - if I perceive that I have sufficient funds, I will spend money - on the other hand if I am aware that my debt is growing, this should curb the tendency to spend. In economic terms, this is call 'propensity' and describes an individuals willingness to consume - propensity to buy is based on a state of mind, so this is where our quest for frugality begins.

2 comments:

Rachel said...

I always pay off all of my credit card each month, then it cannot get out of control as the credit limit is set to a manageable amount. Obviously you will need to pay it off first or else you will just have an overdraft instead! Good luck with this, I cannot imagine it will be easy but as you have done it before, you know that it is possible!

jay said...

Thanks Rachel - as with everything, it starts with a state of mind....