Episode No. 64

How to Handle Impulse Spending with Credit Cards

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Table of Contents

I’m going to be 100% honest, I, Allison Baggerly, owner of a budget and personal finance company, have issues with overspending on my credit card!

Here’s the deal, I don’t feel the pain when I use a credit card. So it’s very easy for me to just swipe, swipe, swipe and then everything feels norma.. UNTIL my balance is due. Then I sit here thinking, what did I do? How much money did I spend? How did I let it get out of hand?

On top of that, when I start overspending my money on my credit card, I actually start to crave spending money MORE! I can feel it in my body, I can feel it in my system. I want to spend the money! It’s like a drug!

If you can relate, then this episode is for you.

When I get into this cycle, this impulse spending cycle, especially on my credit card, I have to go cold turkey to quit! I almost have to have this detox to help break myself out of my credit card spending. And when I think about it, I really do this for my own good, because I don’t want to be held captive by that desire, that desire to spin and feeling like I have zero control over my actions when it comes to my credit card and spending money on it.

So if you have any sort of impulse spending with your credit card, you know that it can actually lead to guilt and shame and frustration. And it also keeps you from reaching your money goals. But most importantly, it makes you feel like you have zero control, or zero power over yourself, your money, and your actions. And I’ve been there. So I’m going to be sharing two things. Two things I do when I start to impulse spend with my credit cards. Two things that I do when I have that crave and desire to overspend to help get me back on the right track with my money. Because although I do struggle with this, it doesn’t happen often anymore. And that’s because I do these two things. So I’m going to dive into them right now.

Disclaimer: I do believe that credit cards can be used as a tool. My husband and I don’t use our credit card for every single purchase we make because I need those boundaries. But we do still use a credit card for things like travel hacking and sometimes it’s just for convenience or because we don’t want to give out our debit card information. However, I do know that sometimes we can over indulge in credit cards. I just wanted to add that disclaimer really quickly!

Okay, NOW to the action steps!

Seek Accountability

The very first thing that I do when I start to feel tempted to impulse spend or overspend on my credit card is I get accountability.

Several years ago, I was overspending like crazy around Christmas time. Of course we had set aside money for our Christmas spending and we had money to spend, but I had that money in savings. I was using a credit card to buy all of my purchases. And then I was going to take the money out of savings and pay off the credit card. Super simple, super easy, right? However, for me, when I start swiping, I get into this cycle and I have trouble stopping spending. So I found myself not just buying things for Christmas gifts, but I found myself buying things for anything I wanted. And so I had gotten into this overspending cycle. And I knew it was happening. I could feel it in me. My husband knew because he could see what I was spending money on. And so I said, okay, I know I don’t want to feel like this anymore, I don’t want to have this temptation, I don’t have this desire. So I said, I need to have accountability! I went to my husband, and I said, will you help hold me accountable? Will you help me put a boundary in place. And because I was the one that went to him and said, I want to put this boundary in place, I want you to help hold me accountable, I felt empowered. I felt like I had control.

However, if it had been flipped, if he was the one that came to me and said, Alison, you need to stop, here’s what you need to do, I think I would have just been like, No, you don’t get to tell me what to do. I’m an adult, I’m going to do what I want to do. However, because I took that upon myself to create these boundaries, I didn’t feel that way, I didn’t have any resentment towards my husband.

Here’s exactly how I asked him to be an accountability partner for me. Together, we decide that neither of us will use the credit card or put anything new on the credit card that’s not planned. That’s not any normal bills that come out automatically on it, neither of us will use a credit card unless we have a conversation and agree about it in advance. And that to me, puts almost this speed bump in my way it allows me to figure out, Okay, do I really want to have this conversation? Can I actually justify the purchase I want to make? And a lot of times I can have that internal conversation. And it’s just this little speed bump that allows me to say, No, this really isn’t a purchase I need to make, I’m not going to do it, I’m not even going to have the conversation. And what that does is it trains my mind to pause and think through the purchases that I’m making. Instead of just spending, spending, spending, it forces me to slow down. And that’s what having an accountability partner does. It’s not for them to just hold a carrot in front of your face and say you can’t do this or try to hold you accountable and an unkind way. For me, asking for accountability is not so I can let someone else have control over me. It’s so that I can be forced to slow down and take back my own control. So how do you do this if you’re not married, or if you have a partner that’s not on board or if your partner spends more money than you do? I think that you can totally have accountability with someone whether it’s a friend, whether it’s a family member, it doesn’t need to be your partner or your spouse, it can be someone online, I know that inside of my Inspired Budget Inner Circle membership, there’s people that actually have formed accountability groups, and so they will message each other and they will hold each other accountable and be that person for someone else, and then someone else is that person for them.

Give Yourself a Cash Allowance

The second thing that I do whenever I’ve fallen into this spending cycle with credit cards is that I actually give myself spending money. BUT the key here is that I make it a cash allowance.

I’ve learned the hard way that it’s really difficult to just go cold turkey when it comes to stopping the swipe. Whenever it comes down to your spending, especially if you’ve had this cycle of spending money, it takes intention to pull yourself out. However, I have found that if I give myself no spending money whatsoever, it will actually lead to almost like a binge-spending session where I just want to spend all the money. I’ll do really well for a while and then I just go overboard with spending money. But when I allow myself to have spending money, when I allow myself to have a cash allowance, and I say cash because it does not associate swiping a card for it for me, then it’s a lot easier for me to track what I’ve spent and how much I have left. When I give myself a cash allowance. It allows me to still feel like I have control over my money and not feel like I’m a child. Right? Because going cold turkey and taking away that credit card can actually kind of make you feel like you’ve lost all of your control.

But the truth is, you’re an adult. You deserve control over your life. You’re not a toddler. We don’t need to remove sharp objects from you. You want to be treated like an adult. And by giving yourself spending money, and particularly for me a cash, you’re treating yourself with respect as an adult. And I’m saying, we’re just changing the form of payment. You still get to spend money, but you get this $100 bill instead of a credit card that has a $10,000 credit limit.

So this way, I give myself back the control. And it allows me to feel like I can still spend money on what I love. It allows me to feel like I’m not being punished for my past choices. Because when I do feel like that, I have no motivation. I have no motivation to do better.

So those are the two things that I do to help me gain back control whenever I fall into this impulse spending cycle with credit cards. And just to recap, the first one is, I get accountability. And remember, I get accountability in the right way, meaning I reach out for accountability. And I still feel empowered, I don’t get accountability by someone punishing me and telling me what to do, because that would backfire.

And the second thing I do is I give myself spending money. And I give myself spending money in cash. Cash spending money. Because it still allows me to feel like an adult and feel like I have control over my money. And it allows me to still be able to spend money on what I love. But within a set boundary, one that makes sense for my budget.

Now you might be wondering, Alison, does this really work for other people? I mean, okay, maybe these two things work for you. I want to give a shout out to Rhea. Rhea is an Inspired Budget Inner Circle member, and she has taken back control of her spending, just like we’ve been talking about in this podcast episode. In fact, she says that before, in the past, that she would make a budget not stick to it. She would overspend constantly. It was a vicious cycle. Since starting the inner circle, she says that she has stuck to her budget, and that it’s getting easier!

Have you ever felt like that? Have you ever taken the time and the energy to write a budget, and then something happens, you don’t stick to it? And you just get to this point where you say, “Qhatever, I’m just gonna spend money on what I want. And I’ll deal with it next month!” or “I’ll start again in three months” or “I’ll start again next week.” Right? And then you’re left feeling guilty, you’re left feeling stuck, you’re left feeling like I have been trying to do this and I’m not making progress. And why is it so hard? But that’s why Rhea joined the Inner Circle. It gave her an opportunity to have a literal a step by step system and a plan that works. And it’s making her life and her finances so much easier to manage. It allows her to reach her money goals!

So this isn’t just theory, I promise you, it works. If you are struggling with impulse spending with credit cards, I want you to try these two things. Number one, find an accountability partner. And number two, give yourself spending money. This will help create boundaries for you to actually detox yourself from that impulse spending cycle and create better money habits when it comes to using your credit cards.

I hope you enjoy today’s podcast episode. If you’re sitting here thinking yes, Alison, I want to take back control of my spending my impulse spending with my credit cards, and I need to find myself an accountability partner, then I want you to actually share this podcast episode — this exact episode with someone that you think you’ll want to be your accountability partner. So whether that’s a spouse or a partner or a loved one, maybe it’s a friend, share it with them and just say, “Hey, what do you think about being accountability partners when it comes to our money?” And then let them listen to the episode and see if they’re interested. Also, if you’re enjoying the Inspired Budget {odcast, go ahead and leave a rating or review on Apple podcasts or Spotify. I really look forward to going and checking out any new reviews. It actually makes my day and it’s something that I really enjoy. I’d love to hear how you’re liking the podcast. I hope this episode helps you live your best life and reach your money goals. I’ll be back next Thursday with another brand new episode. See you then!

Today’s episode is brought to you by my free Budgeting and Debt Payoff Cheat Sheet. In this cheat sheet, I’m going to be giving you everything you need to kickstart your budget and start paying off debt fast. I’ll be sharing with you the most important part of budgeting so that way you can focus on what really matters and works for you. I’ll also be sharing with you how to find more money in your budget to throw towards debt. This cheat sheet is so amazing! And you can grab it for free by signing up below!

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Meet Allison

Allison Baggerly is a blogger, author, influencer, speaker, podcaster, and founder of Inspired Budget, which is proudly a Latinx and women-owned business. A former teacher, Allison blends her talents for teaching with her passion for personal finances to help others learn how to start budgeting and build a life they love.

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