Credit Cards: Your Anti-Diet for the Holidays

We know that most diets don’t work in the long run. So why are we trying to apply the failing dieting model to our credit cards and spending during the holidays?

Most diets fail. Statistics vary, but some sources point out that as many as 95% of diets don’t work in the long run. Since we often approach money the same way as we do food, it is no wonder that our cycles of running up credit card charges just to go cold-turkey for a week or two lead to spending relapses and regrets.

How can you get a different result, especially as we head into the holiday season? Try this approach.

First, define your goal

When we set out to improve our eating habits, we usually start with a goal in mind. Lose those 20 lbs. Fit into a pair of once-favorite jeans. Have enough energy to walk to the park and play with the dog.

Managing your credit cards should start in the same place. What are you trying to accomplish? Is it peace of mind, being able to open your mailbox without stress, or building up your savings to fund a vacation? Without a real goal, you are likely to revert to the old ways of mindless spending.

Next, set the rules

There are hundreds of diets and meal plans. Slow carb, WeightWatchers, vegetarian, ketogenic, you name it and it’s probably out there somewhere. Not every approach will work for everyone, and not all are sustainable in the long run (frankly, some are not sustainable at all!) So, before you jump into your new way of feeding your body, be sure you are picking the set of eating rules that is likely to work for your lifestyle, preferences and health.

Same with your finances. If you want to use your money in a thoughtful way, you need to define some spending rules. Will you only use credit cards in a true emergency? Will you develop a formal budget and do your best to stick to it? Will you give yourself a mandatory cooling-off period of 24 hours before making an impulse purchase? How about creating a rule that any prospective Amazon purchases must sit on the “Wish List” for one week before they get promoted to your shopping cart?

Finally, measure progress

What’s the financial equivalent of getting on the bathroom scale once a week? Tracking progress is important, so be sure to set up a way to check in with your results, reward good patterns and learn from missteps. If you use a budgeting app like Mint or Personal Capital, the program will present you with graphics, alert you when you are veering off course, and give you suggestions for improving your results. However, you do not have to use technology – simply reviewing your credit card statements or writing your expenses down in a notepad can be just as effective.

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