Temptation & Money

Control is an important word. It is motivating. It implies that you have the power to determine your actions. Society tells us that we can accomplish whatever we put our minds to. Call it woman power, man power, gay power or whatever power applies to you. The message is the same, "You are strong. You are proud, and you can do it". So the natural assumption is that you must look temptation in the face and say, "I will not give in". Unfortunately I think that this is where a lot of people get it wrong.

Avoid Temptation
It is much easier to avoid temptation than to try to resist it. Think about this, every time you've given in to temptation you've been in a position to do so. If you we're not in that position you would not have given in. How many mistakes have you made because you failed to resist temptation?

I realize that some people are going to take this the wrong way. You might feel like I'm suggesting that you avoid your problems rather than deal with them or that you should admit defeat and leave the game. I'm not. I'm just stating a simple truth, It is easier to avoid temptation than it is to resist it.

True, some temptation cannot be avoided, but a lot of it can. So in relation to money, I'll give you a few practical and simple methods for avoiding temptation.

Location, Location, Location
First, avoid places where you'll be tempted to spend. Alright, this is super freakin obvious, but it's true. If you have trouble controlling your spending, stay away from the places where you like to spend.

Before I lose your attention let's get a bit more granular. After auditing my finances for a few months I came to find out that I typically spend a good bit of money each month at the Home Depot and a small fortune eating out. I don't actually spend that much at the guitar store. So with this knowledge I can create a plan to avoid and subsequently spend less at those places.

I suggest that you audit your personal finances for a few months to see what you are spending your money on. You can do this easily with software like Quicken or online at websites like Mint.com. Let me repeat, doing this is easy. You do not need to be a computer nerd or a master of excel spreadsheets. These applications are simple to use and provide you with a detailed report of where your money goes.

While I've just stressed that it's important to know where you are your spending, please note that it's not always the big purchases that get you. Many times it's the little things that add up. I would not be the first to point out that cutting out a daily latte habit can lead to thousands of dollars of savings per year. So you need to take a close look at your spending habits and determine the best places where you can save.

The Ruse
Ever since the economy started going south I've seen a proliferation of advertisements encouraging people to be more responsible with their money. They claim that if you participate in their sale or purchase their quality product you are being responsible. Ads used to have messages like, "You deserve it". Now they're like, "Now is the time to be smart with your money". Don't be a chump. Whether they call it Recession Relief or Cash For Clunkers it's just a ruse to get you to spend money. Avoid being tempted to purchase things you don't need, don't want or simply can't afford. Remember if you do not go to the Sale, you will not have to resist the temptation to spend; you'll avoid it.

Limit Your Access to Money
You might find success avoiding places where you are temped to spend money, but there are times when out of necessity you'll have to go to those places. The second lesson in avoid temptation is to limit your access to money. If you put money out of reach it's harder to spend. People walk around with access to literally hundreds of thousands of dollars in their wallets, and they wonder why they are in debt.

It may be difficult to limit your access to the money in your checking account, but there are a few things you can do. Setting up two checking accounts, one for bills and one for spending, is a great idea. Pay your bills with the bills account. Then put an allowance of cash in the spending account. Carry a debit card with you that only accesses that account. I'll go into more detail about my dual checking account technique in another article.

Second, limit your access to money in your savings accounts, your retirement and brokerage accounts, and access to money you can borrow.

If you have money in a traditional savings account that you can withdraw or spend with a debit card you have a potential problem. Back in the day you had to go to the bank to withdraw money from your savings account. Now it's too easy to spend this money. I recommend using an online savings account for your savings. Generally you'll get a higher interest rate and you'll have less access to your money.

Further if your online bank, brokerage, or retirement account sends you a debit card or checks to use put them in the shredder. This money is for saving not for shopping.

Credit Cards
Credit cards are a huge temptation for most people. The average U.S. household with at least one credit card carries nearly a $10,700 balance, according to CardWeb.com. Want to avoid temptation? Leave the cards at home.

"But what about the all the rewards I get for using my credit cards?", you ask. In my opinion the rewards are not worth it. Consider this, is your bigger goal to get a few free nights in a hotel or an ipod or is it gain the financial freedom you need to follow your dreams? One foolish purchase or penalty can cost you more than the sum of all rewards you've earned.

Credit cards are such a massive issue that I can really only scratch the surface in this article. I'll simply say that if you want to avoid temptation leave them at home. You can survive everyday life without them in your wallet.

Conclusion
I've given you two methods to help you control your spending. First avoid places where you are tempted, and second limit your access to money. It makes sense that it's easier to avoid temptation than it is to resist it. However if you really want to avoid temptation there is an emotional proposition that you must accept. You must be honest with yourself. If you continue to allow yourself to be tempted you will eventually give in. Choose to avoid temptation and you will learn to succeed on your own terms.