We were never really taught about credit and taxes and managing funds in school and what little I knew of it, I kind of picked up from books and magazines and tidbits of overheard adult talk.
I was always amazed at how much power a microchipped piece of plastic can yield. Blinded mostly, by the sheer convenience of just swiping away hard earned salary I literally couldn’t see. There’s a huge difference between paying cold hard cash and paying with a card, and it’s mostly psychological. No money in my wallet, nothing to spend. Simple. Credit card equals “I’ll pay this right after. Will go to the bank. Promise. Wipe this clean next payday.” Etcetera etcetera. The lies I told my 20-something self are now so cringey. 😅
Unless you were born into a family of financial gurus (I wasn’t) or was fortunate enough to be exposed to financial literacy during the developmental ages (nope, not I) or was born with an uncanny knack for math, fund management and self-control (def not me!), well then, my friend, we’re probably on the same boat. 😆
When we’re young and impressionable, we don’t initially pay attention to the interest rates or annual charges or the other details in the fine print. Until we have been sucked into the abysmal world of credit card debt.
At one point, I had 4 credit cards with credit limits exorbitant enough to pay for ten of my neighbors’ children. And as i was young, wild, free and reckless, didn’t really bother much with due dates and what nots. Until the bank and the bank’s collection arm started to bother me with it. Bothered me enough to awaken my financial conscience and take control of my wanton spending. What did I swipe for? Shoes, gadgets, bags. Mostly revolved around those items. Long story short, I slowly paid off my credit cards and stuck with only one.😊
Now, I usually prefer paying with a debit card instead. Or cash. Because out of sight, out of mind (this refers to my virtualy tucked away money, whether I really do have money to spend or not) and tangible money or money I can see/smell/touch, triggers my visual brain that no-money-in-wallet means nothing to pay for my shopping.
So what are the simple steps in saying no way josè to piling up credit card debt?
1. Read the fine print a.k.a. T&C (Terms and Conditions) of the bank. Some banks offer low interests rates and zero annual fees. Collect and select.
2. Be aware of your due dates. Calendarize it. Write it down. Set an alarm. Tell your mother. Do it. Pay on time.
3. Self-control. If you don’t need it, don’t buy it. No Lizette, you don’t need 30 Muji ballpens, 10 notebooks and 5 different sizes of acrylic boxes plus a cute stapler.
4. Use the reward points. Credit card companies usually have marketing promos. “Get a free 2 piece Jollibee chickenjoy meal for every Php5000 single receipt purchase.” Yes! That means that’s one free lunch somewhere in the future. Most people use this feature to redeem miles for their #travelgoals but I’m really just happy with free meals.
5. Relative to #2: Pay on time. And pay in full. If you can. The idea of a credit card is to pay for something in advance. This is where the old adage comes in: Give credit where credit is due. (?!) And when credit is due, pay it pronto. This means you are a responsible, trustworthy adult who has enough discipline to maintain good credit standing in all aspects of the banking universe and with this, you can sleep in restful peace.
6. Relative to #5: If you have current credit card billS, the trick is to pay this off with consistency and persistency. Slowly but surely is the key to success. If you’re a visual person like me, type up or write up your budget and expenses in excel file and use the hoarded multi-colored highlighters and Muji pens to really see where your money goes.
Financial awakening is similar to the process of mourning: Denial (WTF I.do.not.spend.that.much.in.a. month!), Anger (pistingyawaanimalkulerabitok kamahal ba diay!), Bargaining (dear self, if you stop spending, I swear I will…*insert half hearted promise*), Depression (huhuhuhu self pity crying) and then finally, Acceptance and Awareness. And I would like to believe that this is where the real journey towards financial freedom truly begins.
Thank you for taking time to read as I’m really just writing this to remind myself not to repeat my past mistakes. 😇 The road to financial awareness is an interesting, but tough one. If you see me at the mall with my credit card, please approach me and check if the items I’m purchasing are essentials.😅 Catch you on the next installment of #moneymatters 🤗
The Marketing Mama diaries. 