How do you save money after a shopping spree?
The first time we’re given leeway to make our own financial decisions can feel all-powerful; like we’re finally adults, like we can finally get what we want when we want it. But left unchecked, it can quickly lead to a rabbit hole of debt and financial strain.
Take it from Rookie writer Victoria Chiu, whose own financial journey started with the tap of a button.
“I’ve been a shopaholic for as long as I can reasonably recall. It started when I was about twelve or so, when I got my first iTunes account and suddenly had access to all these different albums and movies and audiobooks, all available at the tap of a finger. Before then I’d always had to ask my parents for permission for all my purchases, but with iTunes gift cards and internet access, suddenly the entire store was within reach—and that’s when the madness began,” she writes in her piece.
Like most of us, having access to frivolous but trendy things, especially as young adults who can immediately hand their bill over to mom and dad, it wasn’t an easy period for Victoria when reality finally hit that all those things she got at the swipe of a screen weren’t free at all, and that the bills would soon arrive.
“It came to a head when my dad saw my bill one day near the end of the year and noticed the annual total: over two thousand dollars spent almost entirely on iTunes, all on credit. (That is INSANE, and my dad was rightfully alarmed and pissed.)”
Terrifying, especially when you find that at the end of every month you don’t have the physical cash to shell out to the crediting companies.
“The issue wasn’t merely that I was a frivolous spender—it was that I had a really inaccurate concept of the ownership of money and the responsibilities that came with it. Sure, I was making payments on the bills I racked up, but I’d fallen into the trap of only making the minimum payments each month, while the interest piled on,” she wrote, and while she doesn’t spend on iTunes anymore, she said that the time she was spending could have been a time to start saving up a little nest fund for things she would need in the future after she moved out: clothes, food, text books, and rent.
But with her increasing independence came more knowledge on how to spend money she earned wisely, and to develop healthy financial habits along the way to manage her debt.
“I know how it feels to be stuck in that crappy spiral of debt, but just because you might have taken on some debt doesn’t mean you’re a bad, awful person who should never have access to money again. Debt is a big deal, but with determination, the right knowledge, and dedication, you can move to toward squashing it entirely and foster healthy money habits at the same time.”
First: Common non-cash “money.”
There’s the cash you can count and keep, then there’s the “cash” that comes in the form of a little plastic card, which you don’t own, but owe to the companies who let you borrow money from them.
“Credit cards are fast, convenient ways to access money without carrying wads of cash around at the mall. But because you’re just handing over a piece of plastic to pay for stuff and never exactly see how much you’re spending like you would if you used cash, it’s extra important to always be checking how much you’re putting on your card. Think of credit cards as loans from the credit card company: eventually, you’ll be held liable for paying back every cent of what you borrowed from Visa, MasterCard, or whatever credit card company you’ve chosen,” Victoria writes.
And you can’t run away from it either: you’d be labeled an irresponsible loaner, and if time comes you need to swipe money for a real emergency, it might not be as easy to get access.
Remember, the way that credit cards work is that they charge major interest on whatever you owe if you don’t pay for it on time every end of the billing month.
“It [interest] seems OK when the bill is under twenty bucks, but consider if that 15% had been charged on $100, $1000, or $10,000, and interest charges can wreak total havoc someone’s financial situation.”
So, in summary, Victoria advises, especially for those considering credit cards:
“Make sure you understand the terms!”
“Try to pay off as much of your monthly bill as you can.”
“Pay your bills on time.”
And some tips for those considering taking out student loans:
“Spend your funds wisely!”
“Remember: it’s a loan, not a freebie.”
Second: Money and the people around you.
You may think your to saving money and spending habits only concern you and your money, but outside factors like the people around you play a part, too.
“Ever since I started driving frequently, I’ve gotten requests from people I know for free rides to various destinations—people who, in return, will not drive me anywhere, either because they legally cannot or because they don’t want to. I drive a gas-guzzling hand-me-down SUV, and gas is very expensive for me—upwards of $85 a tank, which generally lasts me about one week—and because of that, driving other people and picking them up can quite literally cost me a lot of money,” Victoria starts.
“Now, I’m not opposed at all to doing a few favors for good friends, but when it becomes a recurring expectation that I’ll immediately drive anyone who asks, it becomes a problem. Since my finances are so strained (I’m workin’ on it, like I said, but it’s still not an easy road), I often feel pressured to accept these requests even when it would be better for my wallet and my financially anxious brain if I politely turned them down. But it’s not so easy to say no, because on some level I understand where these requests are coming from: I have a car, it seems like it would be no trouble for me to drive five, ten, fifteen minutes to drop off someone who’s on my side of town. I get it—but the fact remains that it drains my gas, my money, and my peace of mind.”
Of course, the easiest recourse is to ask these carpoolers to chip in for gas, or refuse them rides when it isn’t urgent. But admittedly, it isn’t always easy, especially if it’s a good friend, or that they’ve come to expect it from you.
“Now, except for special circumstances, I make sure to clearly explain my situation to anyone who asks for a ride—and if they won’t contribute a couple bucks, I just let them find their own way as long as it’s not a dire situation. To be honest, I still feel a little guilty, but I have to remember that healing my own financial security is key to preventing the snowballing of my debt into the future,” said Victoria.
It’s not just driving people around too: thinking about your immediate financial situation can also mean declining invites to dine out, or other enjoyable but expensive activities like watching a movie.
“Whatever you choose, don’t be ashamed—you’re just doing what’s best for you, and the people around you have to respect that.”
Lastly, it’s important too to be sensitive to the situation of others, because you may not know that people are a little hard up if they don’t tell you outright. So don’t take it too hard if a buddy is declining nights out or a day-long meetup, Victoria says to extend to them the same respect you would appreciate if you were in their shoes.
“This mutual respect, empathy, and support is another huge part of being unafraid to tackle debt,” Victoria said.
Know any other tips to save money? Leave us a comment below.