I know the holidays are coming up and that gives us another
excuse to have a cookout to enjoy time with friends and family. But what always
happens with many of us is that we look at our bank account and realize that
there is not enough money left over from paying bills or our impulse buys to
purchase the food or other supplies needed to play host or hostess. So what do most of us do? We put it on a
credit card and then spend the next few months to a year paying only the
minimum like mindless drones. We don’t even realize how much more money we are
spending by paying interest on the cards for food we digested months ago. So
let’s start now with a new concept when using credit cards.
First and foremost, never spend more money on your credit
card that you can’t pay off by next pay check. I know some of you are like, Ms.
Smart I already have credit card debt how is that going to help me now? Well,
be patient, we will touch on that too by coming up with a plan using that
dreaded “B” word of a budget to pay it off. Especially because in just six
months Christmas will be here again and I want all of us in a better financial
situation and get off the endless loop called debt.
If you follow this simple rule of thumb then you can pay
your card off as soon as you get paid and most often your balance will be paid
off before the due date. Plus, the added bonus of paying your card off before
it is due is that it will lower your debt ratio and improve your credit and
credit score. So if bad credit and/or a low credit score are a problem for you,
this small change in your spending habit can help you tremendously.
Now, for those of you who already have credit card debt and little things just keep coming up where
you find yourself continuously adding more and more money to your card before
you can even pay it down. The simplest
solution is to first start with a budget. This will help you first to figure
out where your money is going, then two, help you figure out how much money you
have left at your disposal. Once you see how
much money you have left over split it up and start putting some toward
savings. Because let’s face it, if you had an emergency fund you wouldn’t have
to charge your purchases. Then put any other extra money you can find toward
your credit card to pay it off faster. This will start to decrease your balance
faster and lessen the amount of interest you give away to the credit card
company. This in turn will keep more money in your pocket. Click here to read my previous article on
budgeting and/or here for my suggestions on starting a savings account with
more tips and detailed information.
Ms. Smart
