Transform Your Current Spending Habits

One problem that many of us face on getting that first credit card is that we imagine that the money flows freely. I thought that my salary could handle all the monthly minimum payments; after all I would be paying for the shoes, clothes, and make-up in installments. Was I ever wrong!

After barely a year, I experienced the humiliation of having a credit card payment declined; that too, in front of my family and friends. That should have worked as a wake up call, but did not. I figured if I paid double the minimum payment, I would still be able to go my expensive hairstylist every week. I could not keep up with my rising bills.

Thank goodness, my friends intervened and helped me realize the mistakes I’ve made with my credit. You see, it is the thought of having so much money at your disposal, money that’s not even yours, that makes spending it so much easier. I was offered a huge credit limit. Somehow, I got the idea that I would benefit with maximum use of my card.

I suppose I was naïve when it came to credit cards and other matters pertaining to finance. In fact, not once did I hear my parents complain about finances while I was growing up. And I wish they had, because if they had given me a slight hint of trouble caused by credit cards I would have stopped myself from spending what I can.

Stories about other people filing for bankruptcy were just that for me — tales that should arouse a little curiosity. Then there is also the fact that finance companies “forget” to tell you about finance charges, late payment charges and other kinds of fees you only thought possible in your nightmares.

Here is a little trick I learned from my mother — after I was camped in my old bedroom, unable to pay for my rent. It was her advice that I should only use my card when I know that I can back that amount up with cash.

– If you don’t need it, don’t buy it. This is the slogan you should keep in mind at great sales that offer you unnecessary stuff at half-price.

– Consciously use cash when it comes to petty bills. If you can, pay for your groceries, gas and other small utility bills in cash.

– Train yourself to become a bargain hunter. Even if they’re cutting off 25% from the price tag, the other store could have it at 50% off.

– Pay more than your minimum monthly payments. If you have extra cash, put it in your retirement fund or pay off some of your debts.

– You do not need dozens of credit cards. One is enough. You really don’t need to be collecting half a dozen unused cards.

– Pay on time! You really cannot get or give better advice than this. Late payment charges will increase your debt and affect your credit rating.

– Banks offer automatic payments for credit card bills from your savings account, and it is best if you avail of this service. Keep a track of your savings and you should have no credit card debt hassles in the future.