Articles - Archived Expert Advice

Control a Spending Problem

I am a shopaholic, and have no idea how to control my spending—especially when it comes to buying for my 9-year-old son! Now he wants a computer, and I am still in a financial rut from the holidays. What should I do?

First, congratulate yourself for realizing you may have a spending problem. You are not alone. Spending money on a whim is serious, and may require professional intervention.

It is often highly beneficial to take a good long look at your spending patterns. Look back over your checkbook, credit card statements and receipts to determine how much you spent last year. Use those categories and create a budget for each one. This way, when you are ready to begin holiday shopping this year, you will purchase only what your budget can afford.

Avoid charging items on your high interest rate credit cards, unless you truly have the money to pay it off each month. Instead, pay cash. For example, if you spend $1,000 on a computer using a credit card with a 12 percent interest rate, it would take more than eight years to repay the debt if you only make minimum payments—plus an additional $545 in interest charges! Look at it this way: Your 9-year-old will be nearly 17 when the debt is repaid!

If cash is not an option, consider looking for a lower interest rate credit card, like the LGFCU Visa Credit Card, featuring competitive interest rates and no annual fee. You may even be interested in checking out LGFCU's affordable computer loans, which currently feature an interest rate of 6.5 percent.

As always, if you have questions or need assistance, our experienced staff is here to help. Give us a call at 877.367.5428.