Avoid the Dog’s Life – Stop Spending Money You Don’t Have

The best way to dig yourself out of debt is to avoid getting into debt in the first place

A few years ago, I had to help one of my best friends. We have known each other since high school, he’s like my brother. However, it shows we haven’t been raised by the same parents. This friend of mine was always stuck with money problems. Instead of lending him money and simply postponing his problems to next month, I offered him to sit down and take a look at his personal finances. After all, what good does blogging all day about personal finance serve if you can’t help people close to you, huh?

The root of the problem was easy to find

When I looked at his personal situation, I wasn’t surprised to learn that he wasn’t good with budgets. In fact, he told me he doesn’t have the patience and the consistency of keeping track of all his expenses. At one point, a few bills slips out of his pocket and fall in the recycle bin before he can take note of them.

The other problem I found was even worse. While you don’t necessarily need a budget to not overspend your paycheck, things get sour when you use your credit card as a means of payment. I admit it, credit cards have become a more attractive way of payment. They show no transaction fees, bonus points and rewards. How can you expect more?

However, towards the end of the month, you can get stuck with high interest rates on a balance that you either didn’t or couldn’t pay off in full.  The credit card company starts charging you a small fortune in interest if you can’t pay it off in full. Several people make the wrong assumption that they can control their spending throughout the whole month by using their credit card and not busting their budget. If you don’t know how much you spend, using your credit card may not be the best idea.

Here’s a simple but effective solution

If you can’t keep track of your transactions and have an unpaid balance on your credit card, I will give you the solution I suggested to my friend: pay with Interac® Debit! Paying with Interac Debit is as simple to use as your credit card but shows the benefit of using strictly money you truly have as the payment is taken directly from your bank account in real time.

I recently saw this fun video about Interac Debit vs Credit card usage. It relates to the story of a dog that was stuck with credit card debts (yeah… not exactly a true story but not too far from the truth either). In fact, the dog in the video went pretty much into the same situation as my friend did!

You don’t need to keep up with an excel spreadsheet budget to not fall into debt. The solution is simply to use your debit card instead of your credit card! It’s much harder to go into debt if you use the money in your bank account in the first place This is why paying with Interac Debit is the wise thing to do to keep control of your finances!

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