Strategy: The Big Chill - Put Your Plastic On Ice

• A credit card is helpful for emergencies, but emergencies rarely happen at the mall!
• Buying something on SALE is still SPENDING--not SAVING!
• Credit card debt is not an investment. In fact, it reduces your ability to invest!
• Debt from credit cards can make it more difficult to achieve your financial goals.
• How do you use your credit card(s)? Do you use them only for real emergencies, or do you sometimes use them impulsively to buy things you may not need? Test yourself with the following experiment. It can help you manage your credit and minimize the debt you incur.

The Big Chill: Put Your Plastic On Ice

On Thursday night:

• Calculate what you can spend from Friday morning until Monday morning.
• Withdraw the amount you've allowed for the weekend.
• Put all your "plastic cards" in a metal bowl.
• Fill the bowl with water, FREEZE it, and keep it frozen until Monday.
• Then, enjoy the weekend, but spend your money wisely.

By putting all of your "plastic" (i.e., your credit cards, ATM cards, and debit cards) "on ice," you'll have to defrost the cards before you can use them. The metal bowl prevents you from being able to thaw the frozen cards in a microwave. The time it will take to go home to defrost the bowl will give you a chance to reconsider if you really want to purchase the item(s) in question.

On Monday, ask yourself the following questions:

• Did I thaw out the cards before Monday morning? If so, was it worth it?
• Did I want and/or need more money over the weekend? Why?
• Did I want and/or need to use my credit cards over the weekend? Why?

If you have to thaw out your cards and use your plastic during the weekend, you'll be exceeding the budget you set for yourself on Thursday night. In other words, you'll be spending more than you thought you could afford that weekend. That will require you to do without later in the month, or to increase your debt, or both. Is it worth it? If not, try to consume with cash, not credit!