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Don't celebrate paying off a credit card with more spending

All too often, debt is an unbreakable cycle. Splurging after getting debt under control only continues that cycle.

LM Otero/AP/File
Hamm argues that when you pay off a credit card, the worst move you can make is spending more money on it.

For a lot of people, debt is a cycle.

They’ll spend themselves to the breaking point, watching their credit card balances surge. Then, once they reach a point where they are having difficulty paying their bills, they cut back and start living frugally for a while until the credit cards are under control. After that, they splurge, and the cycle continues.

I’ve witnessed this with friends and family. I’ve read stories like this from lots of readers.

The cycle of debt can be a long and painful one. It keeps you in financial shackles for your whole life, because you’re never quite free of those debt payments.

It’s time to break free.

The best way to do this is to not necessarily focus on minimizing your debt to the absolute smallest dollar as fast as you can. That’s right, don’t do that.

Instead, focus on spending routines and habits that you can sustain over a long period. Focus on cutting out spending that you don’t find personally important, but make sure that it won’t return to your life by finding new life patterns to replace it.

Cutting back on spending can be a lot like binge dieting. You cut back incredibly hard for a few months and see some great results, but the “honeymoon” phase of it wears off and it becomes harder to stick with the changes.

You rebound. You splurge on something. It’s just once, but now you’ve given yourself permission to do it again, and all of the old routines come back.

That’s why it’s a bad idea to cut all enjoyable spending out of your life. If you go rapidly from spending lots of money frivolously to spending almost none, you’ll go through a honeymoon period of enjoying the debt reduction, but soon the honeymoon will end.

If you haven’t replaced your spending habits with new routines, the old habits will return. We are creatures of habit, after all, and if we haven’t beaten down a new trail, eventually we will return to the well-worn path of the old one.

For example, if you have a routine of eating out every night and you decide to completely stop it, focus not on the money you’re saving, but instead focus on learning how to cook well. Focus on establishing the new routine as strongly as you can and the savings will happen automatically.

So, instead of trying to squeeze out every dime, focus instead on finding new routines and making them work so well that you forget about your old ones. Don’t be a debt binger.

This post is part of a yearlong series called “365 Ways to Live Cheap (Revisited),” in which I’m revisiting the entries from my book “365 Ways to Live Cheap,” which is available at Amazon and at bookstores everywhere. Images courtesy of Brittany Lynne Photography, the proprietor of which is my “photography intern” for this project.

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