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The No-nos of Money Continued

Using credit to make up for the past
This point may have some psychological overtones to it but it is nonetheless very true for some people. Take this example – Jane feels that she didn’t have a very rich childhood in terms of material possessions. Now that she has the “power” of credit, she swipes easily and thoughtlessly, thinking that she didn’t have this luxury when she was a child and that she can compensate for that now. Before she knows it, she is in big trouble with credit card debt. My take – use that card in moderation and for needs. Do not attempt to make up for the past thoughtlessly. Otherwise, it will only lead to a worse future.

Seeing the situation in a different way than it really is
I know there is another psychological term for this, I just can’t seem to think of it right now. This is what I mean though – let’s say I have a £5,000 credit limit on my card. I don’t max it out all at once but I do owe quite a lot. However, the statement says to pay only £50 and I’ll be fine. So I do that. I keep on doing that each month thinking that I don’t have to pay more than that anyway. Where do I end up? In the deep sticky cycle of debt. Sometimes, to make things easier and to keep on with the way of life that we want, we tend to paint things in a different light. It may help for a while but in the end, it is no good.

(more next time)