Spending money we don’t have has become a common vice and although in the beginning it might seem petty, you can get into to deep trouble if it turns into a habit. Who doesn’t love to shop? It lifts your spirits instantly. Its easy to get carried away feeding your endless indulgences but our monthly income is limited. That’s when we turn to the credit card. Here are some of my tips and tricks to make sure things never get out of hand.
Categorize your expenses: - Categorize your expenses and assign a mode of payment for each category. For example:
Use cash for small spontaneous plans like going out for ice cream in the middle of the week.
Use Direct Debit or online banking to pay off your monthly utility bills like electricity, phone and water.
For bigger indulgences like a fancy dinner with family and friends use your debit card.
Save your credit card for emergencies or small transactions here and there when you have run out of cash.
This will keep you grounded and avoid over indulging. Further still make sure your credit card bill is not more than 1/10th of the money you make every month.
Do NOT get more than 1 credit card: - Pick a good one and stick with it. Do not get baited in to getting multiple credit cards because of all those discounts offered by banks. If you need to switch, switch. But at no point have more than one. I know some people who have landed themselves in to an ocean of debt, due to the use of more than 1 credit card.
Use Direct Debit - Saves you the time and trouble of paying each bill yourself but more importantly you know in your head that your bank balance will be hit on such and such date every month. So, you automatically make sure you always have the minimum amount of funds sitting on your account waiting to take the hit. I find that this really will help those who lack the self discipline to control themselves. Don’t sweat it! Happens to the best of us! Even me sometimes. :p
Do NOT carry over your debt from one month to the next! - Always pay the ENTIRE amount that is due and NOT the minimum due amount. I have seen many people do it. They pay the minimum due, the rest attracts an unreasonable rate of interest. This lands them into a never-ending nightmare.
Delink or remove the credit card saved on your frequently used shopping sites - How many times it would have happened that you would be in double thoughts of buying any stuff while browsing over the internet. At that time the one critical decision to buy hinges on the fact that you only need to punch in the OTP/CVV or address pin code as all the other information is already saved and TADAAA its bought.
It’s just simpler and easier with e-tailers providing same day shipping or even free shipping, you can literally rack up thousands of rupees in spending in just a few clicks. This wasn’t that easy a while back where you had to physically go and buy with the cash.
The solution? - Make it harder on you to make that buying decision really count! Simply deleting the saved information of your credit card from the sites will do the trick as when it is important you will make the effort of putting the information and processing the payment.
The only thing that really matter is we Spend responsibly and be disciplined towards your savings !
- Blog by Bhavesh Rajendra Kalapi
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