Our debt counselors say that a spending freeze can be a great tool against consumer debt. While it’s a fairly straightforward concept, there are some important steps, tricks, and rules that can be overlooked.
A spending freeze is effective for getting back on track from your debt.
The Basics of a Spending Freeze
A spending freeze can last for as long as best suits your needs. It could be a week or a month. If you are doing a spending freeze on just a few budget categories, it could last for several months. Let’s break down the reasons behind the different lengths of time.
If you recently went on a bit of a spending spree, then a week long freeze might be just what you need. Think of it as a way to get back to your routine. A quick pause in spending can help shift behavior away from destructive habits that haven’t completely taken over and stop more personal credit card debt.
Another reason for a freeze might be due to a major purchase you recently made. Dropping a lot of cash or credit on a purchase can sometimes stretch the budget more than expected following that transaction. Therefore, a spending freeze can help to slow things down. It can also help to stop any thrill spending. I admit that spending money can be a hoot, especially a lot at one time. A spending freeze can act as a guard rail to prevent any overspending.
Do you have a major financial goal you are trying to achieve? Cutting back on a few budget categories can really make your savings add up fast. Clothing, entertainment, dining out are some of the common categories that can be put on hold while saving for a goal. Whether it’s managing credit card debt, saving for a down payment or putting money aside for college, a spending freeze can help.
More Tips for a Spending Freeze
Although it’s simple on paper, committing to a spending freeze can be difficult. Here are a few ways to help stay on track:
- Keep a small fund for “emergencies.” Try not to use it consistently. It’s for the tough times.
- Tell someone your plan. Having an accountability partner can be a great way to keep things on track.
- Create and display a visual reminder of your end goal. A little note to yourself on the mirror or a big inspiration poster can make a big difference.
- Start small. Try it out for a weekend and then add a few more days. You could also go on and off every other month.
Whether you need to save money or create better habits, a freeze on spending is a useful debt management tool.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.
