Let’s face it. Some of us are just spendthrifts! We can’t let a good deal pass us, especially during the holiday season, when you can find countless deals. However, not every good-sounding deal is a good deal! So, you must be strategic about your spending.
You spend tons of money to ensure every family member is happy. Come January; many will be crying and frustrated, not knowing how to bounce back. We invite you to follow the steps below to help dig yourself out of the financial holes you may find yourself in too often.
10. Make Sure You Don’t Miss Your Payment
Open the mail Immediately! No need to hide away or dawdle over paying the bills. After splurging, you’ll feel better to get that bill out of the way rather than allowing it to loom over your head.
You don’t want to start the new year developing bad credit, do you? You will send up your cost and drive down your credit rating. If you miss one payment, it could take a long time to recover your good credit status!
9. Be More Frugal
So, you have paid your first bill, and now it’s time to do an inventory. Where have you spent the most? What have you spent the most on? What have you bought that you never use anymore? Take a hard look at your spending practices! Apply some cutbacks and plan for a bright future!
8. Track Habits
Have you paid your credit card bill yet? Remember that you should pay that bill to keep you in their good books by all means necessary! At this point, you ought to take a holistic look at how you spend money.
Do you usually only overspend during the holidays, or has it been a nagging, bad habit? Track your spending habits and make the tough but necessary adjustment. No need to make yourself unhappy by throwing away such an ideal credit card convenience!
7. Create a New Budget
After faithfully going over your spending habits with a microscope, what do you do now? This step is the most necessary part of your recovery and the most challenging. You now need a budget that works for you– something realistic.
You keep paying your bills and determinedly cutting back, so you have less to pay! But what can you use as a motivator? Buy the things that make you happy in these trying times, but do it on a budget. Seek out things that cost less but that you can still enjoy.
6. Don’t Depend on Rewards
The rewards you get every time you swipe your card should not be the motivator to continue to overspend! You are still in up to the neck debt that you must pay off. Those rewards won’t stop interest from compounding your problems either.
Yes, getting cash-back and earning points is commendable, but that’s all it is. You still owe your card provider. Instead of spending to earn points, think how fulfilling it would be to see a lower credit card balance each month!
5. Save Up Some Of Your Available Credit
Spending up to your credit limit is in no way good for your credit score! If you are an over-spender, you’re probably always near your limit. Making your payments on time and keeping your balances low is a sure way to land those loans and finance those big purchases you desire. The rule still stands–use no more than 30% of your limit. The lower your balance, the higher your score!
4. Don’t Panic and Close Your Card
There is always the temptation to close your card, but resist that urge! The urge will be more tempting when you get the dreaded bill at the end of the month, but closing your card may be a big mistake.
Close that card will make your balance goes down, but the limit to balance ratio goes up! So pay your balance and focus on the long term instead. Your credit balance goes with you everywhere.
The interest rate varies, depending on what credit card you have. You could be using the credit card with the most expensive interest rate, so pay attention.
You should be able to consolidate your debts on one or two cards where the interest rates are lower. This way, you can pay down your debt more promptly, which will help you save some money.
2. Don’t Use Money That You Don’t Have
You are not forking out hard cash, so it may not seem like you incur debt with a card. Many transactions happen in a cloud of unreality, and you forget that bills don’t pay themself.
Try and live within your means, and you will not be in debt. That’s reality! Spend only what you have right now and not what you will earn later. It’s easier said than done, and if we all did that, credit cards would be out of business.
1. No More Impulsive Purchases
You can store credit card information on your phone, which makes it so easy to go on a shopping spree. There seem to be so many tempting sales that are hard to resist.
These sales often lead up to impulsively buying things you don’t need, and once you have these things, you can’t bother to return them. This situation calls for disciplining yourself to buy only what you need.
To be debt-free is to be stress-free. Take a few days to consider a purchase before swiping your card or tapping your phone to create a debt. You can avoid the painful journey back to an acceptable balance by living within your means.