Most people in debt don't think about how they spend their money, according to Kathleen Gurney, a psychologist specializing in money-related issues. They pick the menu options they would love to eat, the wine they would like to drink and the items they would like to buy without even thinking about cost or financial and emotional implications until after the money is spent. The key is to be mindful before pulling out the plastic. Dr. Gurney created the following list of questions for her debt-laden clients to ask themselves before any purchase. You have to be able to answer "yes" to all five before you can make the buy.
1. Did I come in here to buy this?
2. Is this a need rather than a want?
3. If it's a need, is this the most cost-effective option?
4. Can I pay for this purchase, in full, in 30 days?
5. Do I currently carry a zero balance on my credit card?
Seemingly simple questions, but if you're in consumer debt, you're probably guilty of impulse buys and occasional, or habitual, mindless spending. I know I was. Therefore, you might benefit from sticking these questions on a Post-it and attaching it to the back of your credit cards. A quick run-through could stop you from taking on more unnecessary debt, and until we are all consistently mindful of how we spend our money, we could probably all use the aid of a few cues.
Angela Self is one of the founders of the Smart Cookies money group. Read her biweekly column on managing debt and saving money at globeinvestor.com.