Budgeting Tip #1
Get rid of those credit cards! You aren't beating the system by paying your balance in full at the end of the month. That small percentage back isn't helping you save money. All the credit card does is make it easier to spend money and spend more of it. I'm serious! Think about it. Christmas is expensive, isn't it? But eh, it doesn't really hurt when you don't have to pay the bill until late January or February. Where did all the money go anyways.
If you are anything like me, you pay your balance in full at the end of the month. So then, what's wrong with credit? It's nice to get the little percentage back. You're actually making money using that credit card... yeah you're actually outsmarting the system, right? WRONG!!
As I've listened to the Dave Ramsey Show podcast (go listen if you haven't), I've learned how wrong I am. I've learned that these huge credit card companies know what they're doing and yes, they're smarter than me. They would not offer percentages back or cash back bonuses if they did not come out ahead. All of these incentives actually encourage you to spend more money. And I did. I think back to those times where I would actually calculate the total amount of a purchase and then adjust it for the amount I would get back later for using my credit card... I really wasn't spending that much money, I'd rationalize. Ah and how I loved store credit cards! Gosh how could I turn down extra discounts on clothes I was already going to buy?
Yeahhh, like I said, how wrong I was. It's too easy to use a credit card. That money takes too long to come out of your bank account. By the time it comes out, you've long forgotten what you even bought and the fact that it wasn't necessary. So now I'm trying to use cash, or my debit card at the very least. I've also created a budget and I will talk more about that in the future. It helps me feel the weight of every purchase. Every penny that we don't spend goes towards paying off our student loans. We are working Dave Ramsey's baby steps to financial freedom. It's tough, but we're committed. Wish us luck :)
Are you brave enough to cut up your credit cards?
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