Your Money_ The Missing Manual - J. D. Roth [35]
Where to Find Help
The sad truth is that not everyone can dig out of debt alone. For some, life just deals too many blows, or they can't seem to control their spending, or they don't earn enough money to make headway on their payments.
Your Money And Your Life: The 30-Day Rule
There's no shame in using mind games to keep from buying things you don't need. In fact, these little tricks (or "money hacks", as some call them) can be a fun way to use psychology in your favor. For example, the 30-day rule is a simple way to control impulse spending. Here's how it works:
Whenever you feel the urge to splurge—whether it's for new shoes, a new video game, or a new car—force yourself to stop. If you're already holding the item, put it down. Now leave the store.
When you get home, take a piece of paper and write down the name of the item, the store where you found it, the price you were going to pay, and the date.
Post this note someplace obvious: on a calendar, the fridge, or a bulletin board.
For the next 30 days, think about the item and whether you really want it, but don't buy it—not yet.
If, at the end of a month, you still have the urge, then consider purchasing it (but don't pay with credit).
That's all there is to it. It's simple, but surprisingly effective.
The 30-day rule works because you aren't actually denying yourself—you're simply delaying gratification. This process also teaches you to think through your purchases and breaks the cycle of instant gratification that can lead to compulsive spending.
This rule has another advantage: It gives you a chance to research the item you want to purchase. You may find that there's a better product out there, or that you can get it for a better price at another store!
If you feel like you've tried everything but you still need help, don't turn to the debt-settlement companies that advertise on TV and radio. They don't have your best interests at heart—they're in it to make money. (For more on the problems with debt-settlement companies, check out this article at MSN Money: http://tinyurl.com/msn-debtsettlement.)
If you need help with debt, turn to reputable sources. First, go to your public library and borrow two books: How to Get Out of Debt, Stay Out of Debt & Live Prosperously by Jerrold Mundis (Bantam, 2003) and The Total Money Makeover by Dave Ramsey.
Tip
In his book, Mundis recommends one simple action to start you on the path to debt-free living: "Just for today, one day, do not incur any new debt. Not one." Make—and keep—this promise to yourself, just for today. (And then make and keep the same promise tomorrow.)
This chapter has already covered many of the key lessons from these books, but they go into a lot greater detail than we can here. If you're struggling, take the time to read these books and apply their lessons. If you still need help, the next few sections discuss a few different places you can turn.
Debtors Anonymous
Debtors Anonymous (DA) is a twelve-step program for people struggling with debt and compulsive spending. DA started in 1968 when a group of Alcoholics Anonymous members noticed that, for them, debting (spending money they didn't have) was an addiction just like alcoholism.
Debtors Anonymous believes that many people get into trouble with debt because they don't really pay attention to their spending. They spend without thinking about the consequences. To fight this habit, DA encourages members to track their spending (as described on Tracking Your Spending) and develop some sort of budget. (Many DA members use the envelope method explained on Envelope Budgeting.) The Jerrold Mundis book recommended above is based on DA's principles.
To learn more about DA, go to www.debtorsanonymous.org or call 1-800-421-2383.
Tip
Being hounded by debt collectors? Know your rights! The Federal Trade Commission has a handy guide to the Fair Debt Collection Practices Act at http://tinyurl.com/FTCcollections. Don't let creditors push you around.
Consumer credit counseling
The National