Avoid Temptation To Break Your Budget

Budgets are financial diets that trim the fat from your expenses.

But like diets meant to keep your body lean, the best-laid financial plans can fall victim to temptation. You’re just one slice of cheesecake -- or, in this case, a high-ticket item such as an appliance, car or new home -- away from blowing the whole thing.

Experts say the quickest road to debt is via credit cards. It’s debt that sneaks up on you a couple of dollars at a time.

"Credit cards may offer you the convenience of getting what you want when you want it," says certified financial planner Sheri Hoble. "But if you get trapped into making minimum payments, you'll be paying predominantly interest."

You could spend years paying it off, she said.

Most financial experts will tell you that people go into debt to fill an unfulfilled need in their lives. We won't delve here into the psyche of why people go into debt. Our goal is to seek the answers to really important questions, such as “How can I avoid being seduced by that oversized, mega-pixel, plasma television that won't even fit in my living room?”

You'll also get a few simple strategies to help you avoid overspending next time you find yourself in the grip of an "I gotta have this!" attack.

Electrical Elation

A casual stroll through the electronics section of any department store is an invitation to gorge the debt monster. To make matters worse, the salesman following you around keeps chanting a mantra: "You can buy today and not make a payment for three years!”

"Most people wouldn't buy high-ticket items without credit cards,” Hoble says. Those buy-now, pay-later deals are the hardest to pass up. But if you read the fine print, you'll note that interest continues to accrue. If you don't pay off the item in full the day it's due, you'll be hit with three years' worth of interest as well.

The experts suggest using cash as much as possible. If you pay with "real money," it feels like you're spending more.

Showroom Stupor

If you've managed to walk out of the department store without buying anything, you might be feeling pretty good about yourself. Then you get into your car and notice a bright red convertible parked right next to yours.

"That car you're driving is so last year," it scoffs.

Next stop: Your friendly neighborhood car dealership.

While the salesman is busy convincing you that you can own that new car for no money down and only $300 a month, you should be doing some calculating on your own. "Plan on spending 17 percent of your total monthly budget on all automotive expenses," says Lisa Smith, finance manager for a South Florida car dealership. "If you're buying a new car, your warranty will cover major repairs, but you'll still have to pay for routine maintenance. A new car will also mean higher insurance costs." If your old car is costing you more in repairs than a new car would cost, then you should consider buying a new one. Otherwise, avoid the temptation.

If you do decide you need a new car, Hoble offers this bit of advice.

"Get pre-approved for a loan before you go to the dealership. That way you avoid gimmicks," she says.

You may very well leave the lot realizing that a good car wash is really all your old car needed to be the envy of anyone going through a mid-life crisis.

It's time to head home, to your castle.

Home Sweet Home

You jump on the interstate, credit cards intact, enjoying the ride in your just-washed-and-waxed vehicle, when a billboard catches your eye: "Ecstasy Estates: New Homes For The Life You Deserve."

Welcome to the next temptation on your way to a debt-free life.

Before buying a new house, consider how long you're planning to stay in it.

"If you're only planning to stay there for a year or two, then you should reconsider," says financial analyst Rob Stanton. "When you buy and sell a home, you pay a lot of fees. The property would have to appreciate in value very quickly to turn a profit. In some cases, you may even lose money if you sell too soon after a purchase."

"There's nothing wrong with buying a home, as long as it fits into your financial goals and your budget," Hoble says.

You should also remember that while your house payment technically isn't considered debt, everything you buy to furnish and upkeep that house is. So, focus not only on the mortgage payment, but on the total expenses and how they will affect your budget.

Satisfied, Not Stuffed

The fact is, no matter how many times you walk away from the luxury-item buffet, there is always another one waiting for you.

Self-discipline is the key to a debt diet. This means paying your balances off each month. Debt not only ruins your bank account, it zaps you of the pleasure of enjoying the very things you bought that got you into debt.

If the stress of making the payments to buy something offsets the pleasure of owning it, then you don't need it.