A few weeks ago I was talking to my co-worker about credit cards. She made a point that I have never considered before: all the rewards you earn from your credit cards, you essentially pay for through interest on your cards so you aren’t actually saving anything.
Unless you’re paying off your cards as soon as you use them (not me), this should be mind-blowing to you if you haven’t already made this connection. I was quite appalled. And that’s pretty much when I decided I’m working towards debt-free.
Here are some small steps I’m taking to kick-start this “journey”, if you will:
Create a Budget
Creating a budget can seem daunting at first, but it’s actually kind of fun when you actually get it done. I love creating spreadsheets and playing with numbers. Your initial budget should just be a compilation of the money you’ve spent over the past month or so. It’s good to understand where your money is currently going so you can see more realistically the steps to take to move in a better direction.
Think Big & Start Small
Don’t try to tackle too many things at once. If you notice you’re grabbing a coffee every morning, just switch it up to every other day. This is a lifestyle change if anything. It’s not only easier to accomplish smaller money goals, but when you do accomplish these goals it encourages you to keep going.
Take out Money for Spending
Every paycheck, I’ve gotten in the habit of taking out cash for spending. Anything that is outside of my budget, I pay with cash. This has become especially useful if you’ve had a vodka tonic at dinner and you’re consider buying a round of shots for the table.
Cutting the Cards
Okay I haven’t actually cut up my cards, but I’ve stopped using them. If anything, life has become a little more simpler because of it. I used to swipe my card and tell myself I’d worry about it later. Well now it’s later and I’m worried. I’m sure I’m not alone in this either. I pay all my bills on time and even overpay when I can, but getting into the habit of using your card and then having to remember to pay it off just adds a whole other dynamic of stress to your life.
I’m thinking about making some more detailed posts on paying off your debt, as this has been a big theme in my life recently, but this is a short synopsis of how I’m getting started.
I hope you enjoyed!