Creditcard3

Two minus four equals trouble when you are talking your budget. If you spend more money than you make, you will have money problems.

The problem is that you usually don’t realize what you’ve done until it is too late. It’s hard enough to keep track of checking account spending, but add credit cards, and spending can get out of hand. How many times have you used your credit cards to buy clothes, impulse items or even groceries, and said you’ll pay it back? But at the end of the month, you have nothing to pay it back with.

It’s easy to say you will pay it back next month, or when you get that bonus at work, or when you get your tax returns. Before you know it, it’s added up to a mountain of debt.

While credit cards aren’t the only way to spend more than you make, they are a number one enabler. Other ways to spend more than you make is by taking out cash advance loans or having an interest only mortgage. In the long run, they rarely work for your benefit.

It’s not easy to stop spending more than you make. But it is possible. Start by creating a budget. List all of your bills and all of your expenses and see what you have left over. Do this every paycheck. You have to know exactly how much money you have if you want to avoid spending too much. If you need to, sit and look at your bank account register for three minutes every morning. Write down what you’ve spent the day before.

Personally, my husband and I have found that the longer we go between looking at the checking account ledger, the more we spend. When we know every day how much we have left, we are able to spend more frugally. But if we both just assume that we still have x amount left, we get into trouble.

If you are a shopaholic, then there are ways to cut your need to spend. The number one way is to never step foot in the store. If you know that you will buy too much other stuff at Walmart, don’t go there for groceries. If you want to go in Hobby Lobby just to look, but know that every time you look, you spend 200 — don’t go in.

Another way to reduce that need is to go through what you already have. When you see how many things you already have, the need for more is lessened.

You know, everyone has lapses. If you have lived on a 5,000 a month spending habit on a 3,000 income for a while, you may be used to juggling things. And even when it starts falling in, you want to spend that 5,000. You may go out and spend too much every once in a while — you just have to deal with yourself when you do. Then get back on track.

There are people out there that live comfortably on 500 a month. There are others that make 5,000 a month that can’t make ends meet. It doesn’t matter how much money you make, it’s how you use that money. By keeping close daily track of your income and purchases each month, you can make it on almost anything.

Credit Cards – Can You Really Live Without Them?

In 2007, having a credit card is no longer a luxury or even a convenience – it’s a necessity. You can’t rent a car, check into a motel, or order online without a credit card. If you want a cell phone, you’ll probably have to purchase prepaid minutes – at a premium – unless you have some plastic with your name on it. And without a credit card, you either have to carry around a lot of cash, make frequent trips to the bank, or hope that the stores you patronize will accept your personal checks.

Credit Cards Can Be Lifesavers in the Case of an Emergency

Worst of all, people who lack sufficient access to credit are the most likely to use payday loan services. Later in this series we will explore this subject in depth, but for now, just consider this: If a single mother is hit with a sudden, unexpected expense – say a car repair for 600 – what can she do if she doesn’t have the money? She needs the car to get to work, and she doesn’t know anyone who can afford to lend her the money out of friendship. So she decides to use the local payday loan shop and ends up paying a 530 percent APR (annual percentage rate) interest. If, instead, she had a credit card with at least 600 of available credit, she wouldn’t have had to use the payday charlatans, and would have paid a much, much lower interest rate. Many people who use payday loan services, even once, fall into an inescapable spiral of debt, where they work all week to pay back their payday loans, and then have to take out new payday loans to meet their weekly expenses. People who use their credit cards responsibly never fall victim to this scenario.

Credit Cards Can Help With Budgeting

Credit cards help spendthrifts easily track their expenditures. One simple technique is to use one credit card to automatically pay your recurring monthly expenses (phone, cable, utilities, etc.), another to buy your groceries and gas, and a third for all other expenses (entertainment, eating out, etc.). When you get your bills each month you can compare how much you spent on your wants versus your needs and make adjustments as necessary.

Protections Offered by Credit Cards

Although the media likes to focus on the “epidemic” of identity theft, the truth is that using a credit card is much safer than using cash, a check, or virtually any other means of exchange. If you’re carrying cash and your wallet is stolen, you’ll never see a dime of your money. If a merchant cashes your check and refuses to grant you a refund, chances are, you’re out of luck. But in either scenario, using a credit card would have offered you protection.

If, for example, your wallet full of credit cards is stolen, you will not be liable for any more than 50 of fraudulent charges, per card. This is the legal limit, but in reality, most card issuers don’t even hold you liable for the first 50 – they just stick the merchants with the bill. And if a merchant refuses to give you a refund that you deserve, you can file a “chargeback,” in which the credit card company will side with you 99 percent of the time. Paying in cash or with a check offers no such protections.

Your Credit Card – Don’t Leave Home Without It

Credit cards are ideal for traveling abroad because they automatically convert to the local currency. This means you won’t have to waste time with the money changer or carry around several foreign currencies, and of course, not carrying cash makes you much less susceptible to pick-pocketing.

The main thing to understand is that credit cards can be wonderful tools that greatly enhance our lives. All that we need to do is be informed, active, and responsible users of these powerful little pieces of plastic.

Stay safe.

Sincerely,

James
www.CC-Yes.com