Many people admit to living from paycheck to paycheck, with little hope or few ideas for getting out of debt. Yet the first step is simply recognizing how you got into debt in the first place.

Three common financial traps are easy to fall into: the Can't Wait Trap, the Comparison Trap and the Commendation Trap.

The Can't Wait Trap trips us up whenever we decide, "I must have that now!" We live in an instant-gratification society of microwave food, instant messages and push-button entertainment. Our addiction to immediacy conditions us to spend money the same way. All we need is a credit card to fulfill our wishes as fast as we dream them.

We fall into the Comparison Trap whenever we say, "Everybody else has one." Our buying decisions are often determined by what those around us have even if we can't afford it. Television, movies and advertising provide even more reference points to which we can-and do-compare ourselves. As long as we have our credit lines, we can be like anybody and "everybody" else.

Whenever we spend money to reward ourselves, we've fallen into the Commendation Trap. This trap is seductive because it preys on our desire to feel good about ourselves. "Money talks," the saying goes, and one of the things it often says is, "Go ahead; buy it. You're worth it."

The fallacy that spending money will make us feel better is at the root of all three. Even if money is tight, these traps give us reasons to spend money we don't have, buy things we don't need and, by so doing, grant ourselves the happiness and enjoyment we're seeking. But these traps promise something that can't be delivered.

The truth is that long-term financial and emotional costs of debt usually outweigh the short-term "highs" of a purchase. Over time, the long-term usefulness of what we buy gives us pleasure; the fading fun of a bargain buy, however, does not. What's more, people who make cash purchases spend about 30 percent less than those who use credit. And those who take time to save for large purchases often end up either deciding they don't really need it or spending less on something similar but less costly.

So the next time you see something enticing and feel the urge to use your credit card, ask yourself, "Do I really need this, or am I just falling into a trap?"

---

Article copyright © 2003, Ray Linder.
All rights reserved. International copyright secured.
Used by permission.

Ray Linder is the founder and CEO of Goodstewardship.com and an internationally recognized teacher of team success and personal development. He is author of three books, including What Should I Do With My Money? — How Your Personality Affects Your Financial Behavior. Ray is an associate of Otto Kroeger Associates, the world’s leading training firm for the Myers-Briggs Type Indicator. He has over 25 years of business experience including corporate finance, investment management, fundraising and development, consulting, sales, pastoral ministry, and small business management. Ray, his wife Christine and their two daughters live in Sterling, Virginia.