Do you know that there is a right way to use a credit card and a wrong way? However, many people have no idea. When you are given ‘things’ in life you usually get instructions. It is then up to you to actually read it. However when it comes to credit cards, we receive no directions on how to use it. In fact, most of us learn from trial and error or follow the pattern of our family. Here are some hints to help you get the best out of your credit card:
* Believe that you are good with money – If you do not feel confident in managing money, then you are setting yourself up to fail. Have faith in yourself and your ability to manage your money.
* Just because you did not like maths at school does not mean you are bad at managing money - Many people struggled with maths at school so believe that they are not able to manage money. They do not like to deal with ‘numbers’. Managing money does not require you to do a complicated algebra formula. If you can add and subtract (with a calculator) then you are great at managing money.
* Money is neither good nor bad- Some people believe that money is bad or evil and that to desire money is being selfish. Money is neutral; you can use it for good or bad. It depends on the person using the money and what their purpose is. Money can be used for donations such as caring for children in orphanages. It can be used to feed and provide shelter for the homeless. Religious institutions are constantly asking for financial assistance. Let go of any negative attitudes you may have towards money.
* Affirm that you are good at managing money – affirmations help you change your internal thoughts. Tell yourself whenever you remember that you are good at managing money. Swap any negative thoughts with positive ‘self-talk’ about money.
* Love yourself and your needs first – You may think it is a strange concept to have under money. Loving yourself has everything to do with you having a good relationship with money. If you do not look after yourself and learn to take
care of your emotional needs, you will be left feeling empty on the inside. You may then be tempted to use ‘shopping’ or ‘eating’ as a substitute to feel good. Both involve you spending money unnecessarily. When you feel good on the
inside, there is no need to buy ‘things’ to feel better. I have met many people who are in debt because they have no self-esteem and believe that they do not deserve any financial ‘happiness’. Examine how you feel about yourself and then
make the changes so that you are a happier person.
* Surround yourself with supportive people – The people in your life need to make you feel safe and loved. I have met many people who are in unhappy relationships and surprise, surprise they are in credit card debt. If there are people who put you down so that you start to feel worthless, then it is time to reassess the relationship. Fearing anyone in your life means that it is an unhealthy relationship. You then have to decide how much you want to fight for your happiness.
* Pay off the total balance of your credit card by the monthly due date – Some people buy ‘stuff’ on their credit card and then only pay the minimum or part of the total amount due each month. If you do this, you will start to pay interest on your card. Overtime your credit card debt will grow and you will be paying significant interest. So whenever you make a purchase, ensure that you are able to pay off the full amount by the due date.
For instance, you receive your monthly statement which states that your total credit card balance is $500 and that your minimum payment is $20. You have to pay the $500, nothing less. If you cannot afford to pay off the total balance, then reduce your spending.
* Have a practical budget – if you have a habit of losing track of your spending, set up a budget. A budget will help you only spend the money that you have.
* Save your money – Instead of using your credit card to make big purchases such as holidays, save your money first. Set up a separate savings account which is hard for you to access. Then every pay day put aside a portion of your salary into
the account. You will be surprised how $20 a week can add up to $200 after 10 weeks and $1,040 after a year. So when you decide to go on a holiday or buy that dress, you can initially put it on your credit card and then, use some of the
money from your savings, to pay off your credit card by the due date.
For instance, Jill bought a dress for $120 with her credit card. She had saved up $2,200 in her savings account. When it came time to pay off her credit card, her credit card balance was $220. She used $120 from her savings account and $100 from her everyday banking account.
* Use automatic repayments to pay off any credit card debt – There are people who are already in credit card debt and feel lost and helpless. Here are some suggestions to help you get out of debt.
1. Visit a bank and get a personal loan to pay off all your credit cards.
2. Set up an automatic payment system where each pay day, a set amount is taken out of your everyday account and pays off your loan.
3. Cut up all your credit cards except for one.
4. Reduce the credit limit of your one card so that you know you can pay it off each month.
5. Only put items on your card if you know you can pay off the total balance each month.
6. Forget about your debt and focus on enjoying life.
I was inspired to write this blog as I have heard of many people who are living with significant credit card debt. They are depressed and miserable about the situation they are in. My hope is this blog will help you feel more confident about managing your money, so that you can lead a happier life.
Take care and remember, you are great at managing your own finances.
* Believe that you are good with money – If you do not feel confident in managing money, then you are setting yourself up to fail. Have faith in yourself and your ability to manage your money.
* Just because you did not like maths at school does not mean you are bad at managing money - Many people struggled with maths at school so believe that they are not able to manage money. They do not like to deal with ‘numbers’. Managing money does not require you to do a complicated algebra formula. If you can add and subtract (with a calculator) then you are great at managing money.
* Money is neither good nor bad- Some people believe that money is bad or evil and that to desire money is being selfish. Money is neutral; you can use it for good or bad. It depends on the person using the money and what their purpose is. Money can be used for donations such as caring for children in orphanages. It can be used to feed and provide shelter for the homeless. Religious institutions are constantly asking for financial assistance. Let go of any negative attitudes you may have towards money.
* Affirm that you are good at managing money – affirmations help you change your internal thoughts. Tell yourself whenever you remember that you are good at managing money. Swap any negative thoughts with positive ‘self-talk’ about money.
* Love yourself and your needs first – You may think it is a strange concept to have under money. Loving yourself has everything to do with you having a good relationship with money. If you do not look after yourself and learn to take
care of your emotional needs, you will be left feeling empty on the inside. You may then be tempted to use ‘shopping’ or ‘eating’ as a substitute to feel good. Both involve you spending money unnecessarily. When you feel good on the
inside, there is no need to buy ‘things’ to feel better. I have met many people who are in debt because they have no self-esteem and believe that they do not deserve any financial ‘happiness’. Examine how you feel about yourself and then
make the changes so that you are a happier person.
* Surround yourself with supportive people – The people in your life need to make you feel safe and loved. I have met many people who are in unhappy relationships and surprise, surprise they are in credit card debt. If there are people who put you down so that you start to feel worthless, then it is time to reassess the relationship. Fearing anyone in your life means that it is an unhealthy relationship. You then have to decide how much you want to fight for your happiness.
* Pay off the total balance of your credit card by the monthly due date – Some people buy ‘stuff’ on their credit card and then only pay the minimum or part of the total amount due each month. If you do this, you will start to pay interest on your card. Overtime your credit card debt will grow and you will be paying significant interest. So whenever you make a purchase, ensure that you are able to pay off the full amount by the due date.
For instance, you receive your monthly statement which states that your total credit card balance is $500 and that your minimum payment is $20. You have to pay the $500, nothing less. If you cannot afford to pay off the total balance, then reduce your spending.
* Have a practical budget – if you have a habit of losing track of your spending, set up a budget. A budget will help you only spend the money that you have.
* Save your money – Instead of using your credit card to make big purchases such as holidays, save your money first. Set up a separate savings account which is hard for you to access. Then every pay day put aside a portion of your salary into
the account. You will be surprised how $20 a week can add up to $200 after 10 weeks and $1,040 after a year. So when you decide to go on a holiday or buy that dress, you can initially put it on your credit card and then, use some of the
money from your savings, to pay off your credit card by the due date.
For instance, Jill bought a dress for $120 with her credit card. She had saved up $2,200 in her savings account. When it came time to pay off her credit card, her credit card balance was $220. She used $120 from her savings account and $100 from her everyday banking account.
* Use automatic repayments to pay off any credit card debt – There are people who are already in credit card debt and feel lost and helpless. Here are some suggestions to help you get out of debt.
1. Visit a bank and get a personal loan to pay off all your credit cards.
2. Set up an automatic payment system where each pay day, a set amount is taken out of your everyday account and pays off your loan.
3. Cut up all your credit cards except for one.
4. Reduce the credit limit of your one card so that you know you can pay it off each month.
5. Only put items on your card if you know you can pay off the total balance each month.
6. Forget about your debt and focus on enjoying life.
I was inspired to write this blog as I have heard of many people who are living with significant credit card debt. They are depressed and miserable about the situation they are in. My hope is this blog will help you feel more confident about managing your money, so that you can lead a happier life.
Take care and remember, you are great at managing your own finances.
RSS Feed