The Budget Fashionista

How many times have you stumbled across a massive clearance or enticing sale at your favorite store right around the time when you ran out of money until the next payday? If you are like most people, chances are when this occurs your first instinct might be to grab your credit card and start charging.  After all, you don’t want to miss the deals the store is offering.  80% off on clothing? Who in their right mind would pass up a deal like that?

If you don’t have the money in your wallet or in your bank account then you should be the type of person to pass on a deal like this.  It doesn’t matter if you’re favorite brand of jeans winds up on the clearance rack and the store wants to eliminate the stock pronto.  If you’re trying to get your finances in order and get out of debt then you need to avoid situations where you whip out your credit card.

Yes, that includes situations when a great deal is staring you in the face.

Think about what happens when you use your credit card to buy something, even if it’s on a fantastic clearance:

1.  You buy your item on a credit card, fully intending on paying the balance off once you get paid.  You congratulate yourself for finding such a great deal.

2.  If your credit card had a zero balance before the purchase of the clearance item, you are now psychologically equipped to make more purchases on the credit card because of the small balance.  You start charging more purchases, still sure that you’ll pay it off when the statement comes.

3.  The statement comes, and you’re shocked and bewildered by the balance.  You know that you bought a few things, but weren’t they all on clearance?

4.  You’re unable to pay the balance in full, and now that you’re despondent over the whole situation you send in the minimum balance and go spend some more money on your credit card.

5.  You eventually wind up paying more money in credit card interest charges on your clearance purchase than if you had bought it for full price with cash.

This isn’t an absolute outcome for everyone, but it’s quite a common scenario.  You may have the noblest intentions of paying off the credit card purchases once the statement comes, but all too often it turns into something bad.  If you don’t have the cash to buy it, don’t buy it. Even if the clearance rack is chock full of fabulous clothes in your size you should first think about the financial repercussions of charging up a credit card that you are desperately trying to pay off (or keep paid off). 

Don’t let the lure of a good sale keep you from your financial goals.