Shop With Purpose

How to stay out of debt this holiday season

Whether you are shopping for “retail therapy,” household items or holiday decorations and gifts, it is important to be aware that how you spend often reflects and impacts your inner mood and perception of yourself. Unfortunately, many Americans suffer from financial obesity, one’s obsessive and self-sabotaging need to constantly overspend and remain financially unhealthy.

It is especially important to keep this in mind during the holidays, as retailers and advertisers will strategically time their can’t-resist offers, discounts and other spend-inducing techniques to exploit a person’s emotional outcomes. As a result, we often tend to become blinded by the supposed emotional gratification that comes with spending and end up neglecting our focus on the needed fiscal responsibilities that, if not kept in check, could seriously derail our future success.

To overcome this, you will need to practice good savings habits to help you become a better money manager, which will help you to constantly generate income and ultimately create new wealth opportunities for success.

There’s no better time to start shopping with purpose than now. As you make your shopping list, especially if it is a holiday shopping list, it is important you have a good understanding of the difference between ‘good debt’ versus ‘bad debt.’ Bad debt includes any form of debt that requires you to pay interest on monies that you borrow from a lender in order to either purchase or acquire something that will never generate any possible revenue (profits) for you in the future. Good debt refers to those times when it is okay to borrow money from a bank, investor or credit card company, but ONLY if you use this borrowed money to purchase things that will ultimately help you to generate more revenue (profits) in the future and restore the original amount borrowed plus any interest required to the lender. Most importantly, you need to exhibit excellent money management skills in order to balance both types of debt.

Your shopping trips will be guilt free and you can end the year on a truly festive note if you sit down and draft out a realistic budget for yourself.

Do this especially before you begin indulging in your creative or last minute impulsive holiday shopping. Don’t get me wrong, being creative with your gift ideas can be both fun and inspiring, but you also need to keep your expectations and spending in check. Too often, we carelessly choose gifts that we think others will want based upon unrealistic expectations or desired outcomes and we may go overboard. By taking the time to really sit down and carefully draft a manageable budget, you can still be creative. Simply choose something that you know the recipient would truly appreciate and enjoy (e.g. buying something fun that they would never think to buy for themselves or something that will be a nice reminder of you) that does not have to result in you spending a lot of money.

To help you get started, here are five questions to ask yourself before you decide to start spending your hard-earned cash or, even worse, incur any future unnecessary credit card debt and interest:

  1. Why am I really buying this product or service?
  2. How will I or the recipient use this product or service in the future?
  3. How long do I plan to use this product or service before it becomes useless?
  4. Does this purchase provide me with any immediate revenue-generating opportunities?
  5. And the hardest question of them all: What would happen if I chose to wait another two to six months until I could truly afford this purchase without using borrowed money (credit or loan)? If nothing bad will happen as a result of postponing the purchase consider waiting, or to use an old cliché, “Sleep on it.”

Shopping can be fun, stress free and debt free, even during the holiday shopping season, but only with the proper planning. Please remember, the financially obese are not broke; they are broken! Do not let fear or unfounded expectations prevent you from achieving the personal and financial success you desire.

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