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How To Manage Your Credit Card Spending


If your credit card spending is out of control, the tips below will help you get a handle on it – permanently!

  • Get your logic involved – 99% of your out of control credit card spending can be traced back to your emotions. I know, I’ve been there! Sit down with yourself and have a brief reality check. If you’re familiar with the excitement / spending / guilt / remorse pattern, jump off the roller coaster a second and take a look at your motivations. Why exactly are you impulse spending? What’s driving you? Is there some other way to satisfy that need?
  • Set a budget – Yes, I know it’s tedious. In the beginning you may have to alter it quite a few times. It really is like riding a bike though. Once you get your balance, you will never forget how to do it, and you’ll be cruising before you know it. Just don’t give up.

    Grab a piece of paper, a pencil, and go to it. Don’t expect it to be perfect, just get something going that you can refer to when you want to something unexpectedly.

    Next time an expense comes up, and you think you need to it right now, try working out a way to save for it instead. If you can’t you can’t, but the exercise in planning will get you one step closer to your goal. Success builds upon success – but you have to plan for it first.

  • Know your net worth – Your net worth is simply your assets minus your liabilities. If you haven’t already taken the time to do this, why not? Your net worth gives you a concrete way to measure your successes and failures.

    Now, not everyone swears by net worth. One of my favorite blogs, No Debt Plan, looks at net worth this way:

    Some argue that net worth is a meaningless number while others claim it to be the financial holy grail. I’m somewhere in the middle. To me net worth is simply a big picture, bird’s eye view, of where you stand financially. A lot of the numbers I use are estimates as there is simply no way to tell what our all of our assets would sell for if we had to sell all at the same time.

    Additionally, I don’t track every single thing we own. The silverware in our kitchen doesn’t count toward net worth. Our television doesn’t either. I stick to the big items for the most part.

    I’ve always found that my own net worth was a good indicator of my spending habits. If it’s shrinking, (and not as a result of my investments) it means I need to curtail my impulse s.

    the more I monitor my own net worth, the more I want to see that number go up instead of down. It’s just like anything else. Whatever you devote your time and energy to is what you will see prosper. If you devote your time and energy focusing on the next new electronic toy, chances are you will get that toy.

    However, if you devote your time and energy to focusing on your net worth, chances are you will find a way to make that number go up.

    Pick your focus carefully, and find a way to monitor your progress.

  • Plan for emergencies, holidays and birthdays – Benjamin Franklin may have said that the only certain things were death and taxes, but I would personally like to add that emergencies, birthdays and holidays all happen regularly too. If you are using your credit to compensate for a lack of planning for these things – find a way to change your outlook. If you know these things will happen, then you can prepare for them. If you prepare for them, you won’t have to put them on credit.
  • The Ultimate Credit Card Secret – Don’t carry a balance. It’s that simple. If you have balances on your credit cards, make paying them off your first priority. When you carry a balance you are essentially paying someone else interest for your own lack of financial management. Take responsibility for those balances, and pay them down. Once you do, a whole new world will open up to you.

    Once your credit card balances are paid down, you will see a number of things change. First and foremost, you won’t have revolving debt (besides a mortgage or car payment if you have them) that’s the immediate benefit. Aside from that though, your credit score will go up because you are no longer using as much of your available credit. This means that your future loans will be cheaper. Next in line is the ability to use reward credit cards, or cash back credit cards. Once you reach this point, you know you’re winning the credit game. This is the point where credit card companies begin to pay you for using their credit cards – instead of the other way around.

  • Simple tenets? Yes. Hard to do? Sometimes. Everyone’s situation is different. If you work through these steps in the order above, it will give you the greatest chance for success.

    Mastering your emotions will eliminate more than 90% of your credit problems. The rest really is easy, and you will have a completely different financial outlook.

    How about you? Do you have any tips for mastering your credit card spending? Leave us a comment below so that everyone can benefit!


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