You have the power to decide where your money goes.
How I used to “manage” manage my credit card use.
Previously my husband and I would use credit cards for EVERYTHING, we didn’t have debit cards and we hardly ever had cash. Grocery store, swipe, gas station, swipe, coffee shop, swipe, visiting a new place and hitting up local shops, swipe, even if we didn’t truly need the item and was more of an impulse purchase, swipe, there was other things and times we would just swipe the card.
What about my budget, right?
Exactly, we had a budget, but we weren’t sticking to it. I was tracking where the money went after the fact, instead of telling it where to go ahead of time. Bad idea!
When the credit card statement would arrive in my inbox I would feel my anxiety level rise. The thought that would go through my mind was “how bad is it going to be”? I was so nervous about opening it and seeing that dollar amount glaring at me.
Granted we paid our credit card off each month, so we didn’t pay the interest, but I still have to figure out where the money was going to come from, because a lot of time between the total of the credit card bill and other reoccurring expenses, it was over our income for the month,
What did I do? Well for us, I was thankful that we had the money available in our savings to pay the card, but that is NOT the way we should be doing things. Changes had to be made.
How do I get away from credit cards?
First it starts with going back to the budget. Telling every dollar where to go, instead of leaving it up to chance. For us we also closed our credit cards and cut them up. Immediately we stopped using them all together.
Doing that changed the spending in a quick hurry, between having the budget set for the month, knowing what was coming in and what expenses were expected, as well as what amounts were set for other categories, then the spending that was to happen would be within the amounts budgeted.
How did that change the emotional impact? Credit Card vs. following a Budget?
Once we weren’t using the credit cards there was therefore no bill coming in for the card. Therefore, I didn’t receive the email, my anxiety level didn’t go up and I wasn’t nervous to open the email.
Now when we go to the store, or have an outing planned we stick to the budget as to what we have allocated for each category of spending. We are in control of our money and where it is going. It truly is a freeing experience. There isn’t guilt of making a purchase, because I have already budgeted for it, and I have set the money aside for it.
What if I stop using my credit cards, but I still have a balance?
You are not alone, this is very common and understandable, but also something that can be changed. When creating your budget, set your budget with your income and expenses (Check out last week’s blog What is a budget? Why do I need a budget?) including making the minimum payment on the credit card or more if possible. Stop using them, cut them up and make sure to disconnect them from any auto payments and/or Apple Pay, Google Pay, etc. so you don’t use the card because it is there.
Stick to the budget and keep paying down the credit card balances, focus on the smallest one first and pay it off as quickly as possible, then move to the next smallest one. This is coined as the “debt snowball” by Dave Ramsey. As you pay off debt it gives you more and more motivation to keep going.
This makes sense, but I would like help!
I’ve got you! We can go at things alone, but we can get there faster with help and guidance. That is what I am here to do. Whether you are just starting out and need to create a budget, set up an emergency fund, pay off debt, start putting three to six months of expenses into a savings account or you are ready to start investing in your future and living life debt free, I am here for you.
Schedule your free consultation call HERE and we can discuss where you are now, where you want to go and how to get there.