Prioritize savings and leave credit cards at home, says expert

As consumers look to get the new decade started off on the right foot, financially speaking at least, renewing a dedication to savings while cutting down on credit card use may be two ways to do so.

According to Dr. James Roberts, a professor of marketing at Baylor University and a researcher of consumer behavior, families who are worried about their personal finances and looking to get out of debt should make a determined effort to focus on saving money in the new decade.

Roberts said that families that save money in 2010 should allocate it into four separate categories: a college fund for children, contributions to a retirement account, a fund with at least three months worth of cash to fund necessary expenses, and an emergency fund of $2,500, Newswise reported.

“This involves creating an environment that makes it easier to not spend money, such as avoiding the malls, shopping without credit cards and only with cash, using a 24-hour cooling off period for big purchases and paying yourself first to help you attain the four savings goals,” Roberts added.

Additionally, he also suggested that families downplay any tendencies to overuse a credit card for their purchases. Arguing that paying with cash or debit cards carry more of a “pain of paying” that may deter consumers from making some larger, more unnecessary expenses, he said that credit cards removed any immediate hurt from a financial decision that led to more reckless spending as a result.