It can be really easy to throw down your credit card and say, put it on my tab! However, the lingering financial hangover of paying off debt for months is more brutal than nursing your migraine from all those margaritas.
1. An evening out
Pay with cash when you go out for the evening. Setting aside a designated amount of cash for your evening out will help you stay in budget, and not get a flashback when you get your statement at the end of the month.
2. Buying a car
Unless you are going to pay your entire balance right away, buying a car with a credit card is not a good idea. You will likely pay more in interest and fees than if you looked into financing.
3. Household bills
Again, if you’re not going to pay your entire credit card balance when you receive your bill, paying for household bills with your credit card will just make your bills cost more.
4. Emotional spending
I know, a new pair of shoes is absolutely going to make you feel better after that tornado of a day at work. You can budget for that, with cash. Using your card for emotional purchases will have you going way over budget and, then, when you get your credit card bill, you’ll be in need of a pick-me-up again. It’s a vicious cycle. You can allow yourself controlled emotional spending if you set aside an amount within your monthly budget for that type of expense and you pay in cash.
5. When It’s All About Rewards Points
Don’t charge a bunch of things you don’t need, just so you can pay for your upcoming trip with points. Instead, shop around for better hotel and flight rates. With the travel industry suffering dramatically due to the coronavirus, there are plenty of deals available on necessary travel.
You may have focused on salary when considering taking your current job or looking at a new opportunity. Don’t forget; your time, flexibility, health and sanity are also currencies that you should be focused on earning. Many employers offer benefits that you may already have and can easily take advantage of, at little or no cost.