Stating the Obvious and the Unclear

It’s obvious that if you don’t pay it off each month, every time you use your credit card, you’re going to spend more money for that item than the price you were charged. The additional amount you pay is interest. What’s not so clear is that…using cash wisely will actually save you money. I know you’re what you’re thinking, “you just said the same thing flip flopped”. Yes that is true, but let me ask you this: how many people actually look at it that way?

Not many.




Using a credit card is like throwing money out the window!

So, let’s ask the obvious question. Why do people use credit cards? Well that’s easy…because they don’t have the cash on hand. Here’s something not so obvious. If you don’t have the cash on hand and you’re tempted to use your credit card, have you ever thought…do I really need this? I mean really need it? Not “do I want it” or “is there a strong temptation”, the question is do I need it? Most of the time, the answer is NO!

So what’s my point? Establish a cash-based budget that is very disciplined and specific. In your plan specify how much will go towards required monthly expenses (bills, mortgage, groceries, gasoline for vehicles) and how much will go to discretionary spending (clothes, entertainment, snacks). For anything outside of that budget, or if you end up in a situation where you feel you must use your card. Think really hard about if you can live without it. (Please re-read that last sentence- it’s a doozy). If you can live without it, then DON’T buy it.

Spend Spends tip: The more purchases you pass up, the more money you save. In the end, you’ll end up with less junk and more cash.