Shopping Triggers and How to Curb Them: Plastic Instead of Paper

by Stacy Francis, CFP®, CDFA

Yesterday, a dear friend invited me to a pre-sale event in a major department store. There would be free champagne, she told me, excellent service, fun music, wonderful people and above all – of course – some killer outfits, just off the catwalk. Now, the thing is, this has been quite an expensive month for me, with vacation times along with some unforeseen expenses. So I told her that unfortunately, I’d have to pass because of money.

“Why,” she asked, “don’t you just charge it?” I nearly gulped out loud! Doesn’t she remember that I am a financial planner? That is like telling a dietician to start living only on a diet of McDonalds!

This leads us to our next shopping trigger: those wonderful, glistening, magic little cards that are sometimes able to bring us so much pleasure. Because, we reason, why would we pass up fabulous deals and pay more for the things we want later, when we can just seal the deal by charging them, and then pay them off when we do have the money?

The answer goes a little deeper than the obvious one of the financing charges that make most personal finance experts recommend that we double the sum of each purchase we charge but do not intend to pay off the same month, to get an idea of the actual cost. It is also this very behavior– to seal the deal fast by putting up the plastic — that gets so many of us in debt, severely damaging our financial futures. Instead, think about how much better of a deal it is to pay cash when you actually have the money, and stay clear of the murky depths of credit card debt.

Check out the other articles in our series on Shopping Triggers.

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