My understanding and beliefs about money began at the same place most do – with one’s parents. My parents’ handling of their personal financial life was truly a work of art. Transferring money from one budget envelope to the next to meet a need, hitting all the local auctions and thrift stores, and using the credit card for emergencies were all the norm in our household.
One can’t help but carry those same patterns of behavior into early adulthood. Parental modeling of behavior has that much impact.
So after college, I tried to follow the conventional wisdom about money by being as frugal and disciplined with spending just the same as it was instilled in me during childhood. I also became more in tune with what society had to say regarding personal financial habits. I felt myself growing and becoming grounded with all the practical information I was hearing.
One area that I began to differ from my parents was in the use of credit cards. They had used them mostly for emergencies and rarely for basic purchases. I was hearing a lot of conventional wisdom at the time saying credit cards should be used for everything – absolutely all purchases if possible. The reasons being…
1. It’s more convenient in that you have one bill to pay at the end of the month.
2. It’s safer than carrying a bunch of cash or a checkbook.
3. It offers certain protections on purchases.
4. It helps build one’s credit score, which will be useful when securing any type of loan.
5. It allows the purchaser to earn reward points that can be exchanged for products or services.
I thought these to be worthy arguments, so I dove headlong into the credit card world. Visa, Discover, MasterCard and American Express all found a place in my wallet. And so my life went smoothly along, following the conventional wisdom of society for the next decade.
Along the way, an interesting phenomenon occurred. Somehow, I lost the frugal and disciplined component of what my parents modeled for me and instead became a wild spender. As most bad habits, it didn’t happen overnight but was the result of small decision after small decision over an extended period of time. By my mid-30s, my wife and I routinely spent more each month than we brought in. The money we had saved in the early years of marriage was now being withdrawn from savings each month to pay the credit card bill.
We didn’t like this scenario, my wife more than I as she handled the budget in those days. I felt really confused. Here I was following all this wise advice about using credit cards, yet everywhere I looked there was failure in our monthly spending habits. A change of behavior was definitely required, but we didn’t know how or what needed to be done.
Then, from out of nowhere, two things happened almost simultaneously that righted the ship.
First off, we were exposed to some teaching that outlined a different method to pay for items – use cash or a debit card. It’s not like those methods were new, they had simply not been on our radar screen. The primary argument that drew us toward a debit card payment system was research showing that, on average, people spend less with a debit card and spend even less when using cash. That sounded like what we needed.
The bigger development was that I was undergoing a spiritual conviction in regards to my lack of discipline and views about money – specifically being in debt (which you technically are in when using a credit card). My faith is very important to me and God was teaching me some things though my reading of the Bible that I had never considered before. He was reworking my belief structureI read.
The toughest part was that it greatly conflicted with my beliefs and behaviors of the past ten years. It also produced pressure to be a nonconformist and go against the grain of what society at large said was wise. “Surely people will think I’m weird,” I thought.
Challenging the Conventional Wisdom About Money:
So what does one do when a personal conviction is in conflict with conventional wisdom? It depends on the situation and what values are in conflict. In this case, I followed my conviction, feeling that growing in my faith was the more significant issue.
The inner conflict that evolved as we contemplated altering our patterns of behavior would take too long to detail here. You most likely know how it feels to passionately believe in doing something one way and then realize there is an alternative way that might be better for you. All sorts of thoughts and emotions rattle through our minds as we fight the battle to change or to stick with what we already know.
As the years have passed, I’ve realized the credit card itself was not the problem. It was my own lack of discipline that got us into trouble. The card didn’t spend itself. I was the one who had to pick it up and use it.
However, I believe the cards assisted in opening up a door to my undisciplined side. I conclude this to be true because as soon as we made the switch to using a debit card, our spending dramatically decreased and our savings rate skyrocketed. Within two months, we were no longer spending more than we made each month.
Because of that transformation, we’ve chosen to completely abandon the use of credit cards. I simply don’t want the door to my undisciplined side to be opened ever again.
Your journey towards financial freedom may require some radical changes. Mine certainly has forced me to think outside the box. The solutions may be different than what you’ve been taught or what your friends are doing. Don’t fear confronting those issues. You may find change is a welcome thing.
Have you ever faced a situation where a change meant going against conventional wisdom? What’s the toughest part about change? Did friends and family not understand or poke fun when you got serious about your finances? How have you controlled your level of spending?
About the author: Brian Fourman is a private school teacher and personal finance blogger. His hobbies include rental real estate, running, cooking and sports. In his down time, he loves being a dad to his 4 kids and hearing his wife talk about all the cool things CPAs do at work. You can check him out providing encouragement and inspiration on his blog at Luke1428.com or by connecting with him on Facebook, Google+ and Twitter.
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