There are so many debt
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What is compulsive spending?
Compulsive spending is something a wide variety of people struggle with. Psychology Today puts it this way:
Compulsive spending, sometimes called compulsive buying disorder or oniomania, is spending far beyond what is necessary. Though it often causes financial harm, people of means may engage in compulsive spending without suffering serious financial disaster. In an increasingly materialistic society, it can be difficult to differentiate compulsive spending from the overbuying in which most people engage.Read the full article on Psychology Today
Simply put, compulsive spending is the desire to keep buying things for the instant gratification that can sometimes lead to buyers remorse.
Buyers Remorse – The sense of regret after having made a purchase.
Why should you work to pay off debt?
Take a moment and add up the amount of money you pay toward debt each month. All debt (besides your mortgage), can fall into the following categories:
- Credit cards
- Student loans
- Medical bills
- Car loans
Take a moment to add up how much money you put toward these types of debts each month. You can even check this credit card interest calculator to help you see how much extra cash you spend in interest!
Credit card interest calculator
Imagine life without debt
That’s why you should be working to pay off debt. You are literally taking your own money back.
Best debt payoff plan for compulsive spenders
Because compulsive spenders struggle with the desire for instant gratification, it makes sense to find a debt payoff plan that gives them that same sense of instant gratification. In my opinion, the best method to do this is the Debt Snowball by Dave Ramsey.
How the Debt Snowball works
The Debt Snowball is designed to pay off your smallest debts first and then work toward your larger debts. You can watch a quick 5-minute break down of how the Debt Snowball works or read more here.
Why this method works for compulsive spenders
While some debt payoff plans insist the best way to become debt free is by paying off your debts with the largest interest rate, the Debt Snowball works by paying off your smallest debt first.
The Debt Snowball is the best debt payoff plan because you are a lot more likely to get that instant gratification that you feel similar to compulsive spending.
When you find your extra $200 per month to begin the Debt Snowball method, you might even be able to pay off a small credit card within just a few weeks. This sends your brain a massive rush of serotonin.
You get to visually see your results
You can even
How to get started
Before you begin working on your Debt Snowball, make sure you have a secure $1,000 emergency fund in place. Here are some ways to build an emergency fund fast.
You can start the Debt Snowball by simply finding an additional $200 per month to put toward your smallest debt.
Can you bring in more than $200?
Absolutely! The more money you can bring in each month to put toward your Debt Snowball, the better. For our family, the additional income I made from blogging was enough to help us knock out all of our debt in 1 year. Learn more.
Extra tips for debt payoff plan success
The Debt Snowball plan is the best debt payoff plan for compulsive spenders because it gets quick results, but that doesn’t mean it’s always easy.
In order to keep yourself on track and get your debt paid off, there are some additional things you can do:
- Get an accountability partner whether it’s a friend or a spouse
- Join a Financial Peace University group near you
- Get helpful books on finances
- Create a vision board to help remind yourself why you started
Getting connected with others, keeping the knowledge flowing and reminding yourself of your big financial goals are sure ways to help you stay on track.