The “Ice Glass Method” of curbing credit card spending

I’m listening to a very interesting audio book right now, “Predictable Irrationality”. The book talks about how we think we make decisions versus how we actually make them.

On the topic of impulse spending and excessive credit card debt, the author discusses a possible solution, known as the “Ice Glass Method”. Here’s how it works: You take your credit card, put it in a glass of water, and throw it in the freezer. This way, your credit card is ready for use, just not right at the moment of your irrational impulse to buy. If you really want that paintball tank (yes it’s a real thing), all you have to do is pay cash, or you can wait until your credit card thaws out. By that time, your emotions may have cooled, allowing you time to realize that you can probably do without the paintball tank.

Another interesting tidbit from the book: While the U.S. had a negative savings rate at the time the book was written in 2008, Europe saves around 20% of it’s income, Japan 25%, and China saves around 50%!!!

So think about using some better role models than your neighbors who buy a new car every two years. Remember, they very likely have a negative savings rate and are racking up the debt. Think about how secure and worry free you’d be if you had even one year’s worth of expenses in the bank…


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