Keeping Up with the Jones: It Only Causes Debt

These days, it seems as though everybody is competing for a certain status in society. Many Americans today are living well beyond their means. We may see that our neighbor has a 48-inch big screen TV and begin drooling in envy. So what do we do? We go out and apply for more credit so we can have a big screen TV as well, only we don't settle for a 48-inch, we need to have a 52-incher. Wouldn't it just be great to invite the neighborhood over to watch the Super Bowl on your monster-sized TV with surround sound? You may have bragging rights and it sounds great, but you're probably going to be paying for that big screen for the next twenty years or so.

Living within your means, means not falling into the credit card trap. It's extremely easy to be enticed by credit cards, the credit card companies make it so easy to apply for it via the Internet and in most cases, instant approval. It's very tempting when you crave a new luxury. You may see your neighbor again pull in their driveway pulling a new shiny speedboat behind their Hummer and think, how are they affording these things, I know they can't be making that large of a salary. Well, chances are, they can't afford it.

We live in a society that see's it, wants it and buys it, not thinking about all of the debt they have created will eventually catch up with them. It happens to smart people and it happens to good people. Anybody can fall victim to consumer debt because unfortunately, we rely on credit. It's so easy to just pull out those little plastic monsters on the spur of the moment to buy what our heart's desire.

Many American's do not live within their means, they generally spend more than they make and a mountain of debt is the result. What happens when the stress of debt takes over, people usually begin to borrow more, hence the phrase, "robbing Peter to pay Paul." Obtaining more debt only adds fuel to the fire. Some refinance their mortgage to consolidate debt which in many cases, only creates room to create more debt, not to mention higher mortgage payments.

Spending is not necessarily a need, it's a lack of discipline. If one can discipline themselves from impulse spending, chances are they won't fall victim of a never ending trail of debt. It is difficult no doubt, because we see something and the desire to have it takes control. The first thing to look at is a budgeting plan, you need to get your spending under control. Who cares that the neighbor has a shiny new boat? We sometimes make purchases because we want to compete with the Jones' so to speak. I can't tell you how many times my 12-year old has begged me for his own cell phone. He always reminds me that so and so has a cell phone, why can't I? Well personally, I don't care what so and so has. My 12-year old doesn't need a cell phone, I didn't have a cell phone when I was twelve, we used these strange things called phone booths and my parents new where I was at and who I was with.

What about the electronics industry? How about a Playstation3 for $600? I'll admit it, we have an X-box and a Playstation 2 in our home, but I draw the line when my 12-year old asked for an Playstation3 this past Christmas. Yes, once again I heard about how so and so got a PS3 for Christmas. They get you one way or another because they make these new gaming consoles so you eventually can't play the newly released games on the old ones. So what do we do? We give in and buy it and create some more debt for ourselves.

We always want to please our children by giving them the things they need, but sometimes we just have to draw the line. If we don't, we will continue to spend more and well beyond our means. Children don't seem to be happy with what they have anymore, there is always a bigger and better version to everything. Trying to pry my children away from all of the techno gadgets is quite a chore, they always want more. We have to learn to say no and have will power to not be persuaded into buying more.

If you find yourself struggling to pay off your debt due to impulse spending, you will need to take control. After creating your budget, you need to come up with a plan to minimize the debt you have created. One thing you can do to prevent impulse spending is to not carry your credit cards with you. If you don't have them with you, you won't be able to make an impulse purchase. Try to pay off cards with the highest interest rate first and try to pay twice the minimum due at the least. If you have multiple cards, cut them up and only keep one for emergencies. If you don't wish to get rid of all of your cards, one thing people have recommended is to place them in the freezer in a bowl of water so when you have the urge to spend, you have to thaw the ice block out to get your card. Usually by the time you are able to retrieve your card, the impulse may have passed.

We don't need an over abundance of luxuries to be happy, actually, you probably will be happier by not having everything we want because we will have a better appreciation for the things we do have, so think about what truly makes you happy before you create debt to gain something you don't need.