Use Financial Roadblocks to Force Good Behavior


financial road blockWe all know what we’re “supposed” to do. We’re supposed to spend within our means. We’re supposed to save for the future. We’re supposed to be responsible and plan ahead. The reality is that personal finance is more about psychology than it is about simple numbers. Everyone knows that if you swipe the plastic more and fail to pay, you’ll get dinged with fees and interest. It’s like losing weight, you know that if you eat that Snickers bar, wash it down with a milkshake, and then take a nap… you’re going to gain weight.

When it comes to doing the right thing financially, it’s sometimes better to trick yourself into being good rather then relying on your willpower. Put roadblocks in the way of your bad behavior in order to force good behavior. That’s part of the logic behind the following ideas that you should implement to help improve your finances.

Freeze Those Credit Cards

One of the classic ways to stop yourself from using your credit cards is to not bring them with you in the first place. If you don’t have the cash on hand to buy something, you don’t buy it. If your credit card isn’t with you, you can’t swipe it. Some people take this advice one step further and they freeze their credit cards in a block of ice! You literally drop the card into a cup and then stick it in the freezer. If you want to use it, you have to defrost the ice. It gives new meaning to the term “cooling off” period.

Lock Up Your Cash

Now that you’ve frozen your credit cards, the next step is to tie up your non-emergency fund cash in a way that’s responsible. I recommend you consider putting it into a certificate of deposit or, at the very least, into a high yield savings account from an online bank. Regardless of what you do, your money won’t be instantaneously available with the swipe of a debit card, which puts enough of a roadblock to stop you from making at least some of your purchases. It’s like forcing you to go to the grocery store to buy a bag of chips, rather than walk into another room. You could easily hop into your car, but it’s not as easy as before.

Don’t Save Credit Information Online

There’s a reason why Amazon.com and other online retailers love it when you save your credit card information – it makes it easier for you to spend money. Between subscriptions and one-click buying, Amazon has perfected the art of getting customers to spend as much and as often as possible. Counter this strategy by never saving your credit card information online. When you are forced to enter your card details each time you buy something, you create a small hurdle to buying. You no longer mindlessly click “Add to Cart” and “Check Out.” You have to get your card, which could be in another room, and that’s often enough.

Don’t Carry A Lot of Cash

Last but not least, don’t carry a lot of cash because it has a funny way of sneaking out of your pocket. Take just enough so that you can cover any purchases you expect to make but not enough that you can make surprise purchases that bust your budget.

These are just a few small roadblocks you can set for yourself in order to keep your spending in check.

(This has been a post contributed by Jim over at Bargaineering.com)

photo by ollesvensson

Written by Jon the Saver

This post was written by yours truly, Jon Elder. My mission is to help you succeed in your personal finance life. Join me on the journey to financial freedom! You can subscribe through RSS FEED or EMAIL updates. You can also find me on TWITTER
and FACEBOOK
. Happy investing 🙂

Jon the Saver

This post was written by yours truly, Jon Elder. My mission is to help you succeed in your personal finance life. Join me on the journey to financial freedom! You can subscribe through RSS FEED or EMAIL updates. You can also find me on TWITTER and FACEBOOK . Happy investing 🙂

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