Why You Should Use a Credit Card for Christmas Shopping

One can argue that you should use a credit card for all purchases you make in a given month, but if you are afraid to totally rely on a credit card I don’t blame you, after all, it takes discipline to keep the balance down enough so that you can pay it off entirely by the statement due date, otherwise interest starts to incur.  If you want to try out baby steps and just use for Christmas shopping only, then you can start to see why using credit cards actually make plenty of financial sense.

Better Fraud Protection

When you use your debit card and your card gets compromised, your entire checking account could potentially get wiped out if you don’t catch the fraudulent charges in time.  Sure, you can dispute them, but what if you have bills pending that need to be paid.  The delay in getting the disputed charges returned to you could put your finances in jeopardy, so at least with a credit card if your information is taken and charges are made, at least they’ll remain pending until resolved without putting you on the hook.

Build Up Rewards

Probably the best reason to use a credit card and why it can be argued to be used for all purchases are the credit card rewards.  Now I don’t know if say a victoria secret credit card would give the same perks as the other cards out there, but by making purchases that you would normally make anyways you can earn points to redeem for gift cards to restaurants, earn points for free hotel rooms, or just accumulate dollars that you would receive in a check back to you once a year, either way, not using a credit card is like essentially leaving free money on the table.

Improve Credit Score

You may that that credit score is not important, but if you ever want to buy or refinance your home, get a personal loan, car lease, or even employment, then credit score really does matter when it comes to showing if you are a responsible borrower or not.  While it will not help your score to carry a balance over each month as that would add to your credit utilization, by charging and paying off each month it can not only improve your score with on-time payments, you can also gain credit line increases as well which will add to your overall credit available.

Simplifies Spending

It can be a lot to juggle cash, debit, credit, while staying within a budget and not going overboard.  After all, if you continue to pile up the charges sooner or later you will have to pay them off, so why not simplify purchases with say a credit card.  You can earn rewards while you are making purchases, give yourself a little grace period of paying back, and only have to track purchases on one account and statement to review line by line to see what you purchased the month prior to see any room for improvement.

Money Moves to Make Now to Improve Finances

As we wind down 2017 it can be a great time to reflect back on what we accomplish this year, and what we did not.  Like most of us who create a resolution probably stuck with it for a while, only to give up and go back to living normal life.  While most strive to lose weight, others can focus on getting finances in order.  There is still time to make good on your resolution and set yourself up for success in 2018.

Finalize Tax Write-Offs

Whether you are not sure if you are going to owe and want to make the most of your return, are feeling charitable, or it’s ok to admit a combination of both, now is the time to finalize tax write-offs before the year ends, so there are still a couple weeks.  Take a look in your closet for clothes you no longer wear, check the basement storage for items that may have collected dust, or kitchen items that you are needing to replace soon, all can be great items to donate to the less-fortunate and get a tax write off in return.

Create a Budget

It’s no surprise the most American’s do not use a budget, two-thirds in fact, so if you are in a place where you find yourself living paycheck to paycheck, it may be time to look to free up extra money and keep a clamp on spending, where you may have not in the past.  Who knows, you may be finding out that more money is going out than coming in, and find yourself getting further into debt.  By creating a budget, you can work on allocating funds to monthly bills, food, gas, and spending, and continuing to tweak to make sure there isn’t too much/too little.

Look to Reduce Expenses

If you are looking to free up extra money each month, if you can reduce the amount you’re spending, both in monthly bills and spending money, you’ll be on the right track to see the savings adding up.  Whether it’s going grocery shopping instead of eating out, checking is lyft cheaper than uber, or cutting your cable bill altogether, you may have to think outside the box, while making sacrifices along the way in order to reach the final goal, which is having no debt and having enough saved up for in the future during retirement.

Increase Savings Contributions

While retirement may be decades away still, that is all the more reason to start saving now, the earlier the better, so that it can continue to grow over time.  Whether you are not contributing anything, to having a large percent of your pay going, now that the new year is coming soon, it’s time to increase contributions even further, even by a percent, so you don’t feel the burden as much, as your money is leaving your check and going into your retirement account.  I know you’d rather spend it now, but you will need it to live off when you are finally ready to walk away from work.

How Credit Card Debt Can Quickly Spin Out of Control

In this cashless society, relying pretty much on credit and debit cards, especially with the ease of purchases between online shopping and swiping in-store, as the purchases continue to pile up, so does the credit card debt.  When you carry a balance over to the next month is when things can start to add up, now that you are paying interest and the monthly payment will need to be large enough to cover interest and chip away at the balance, before credit card debt can spiral out of control.

Charging to Earn Rewards

Rewards is probably one of the best perks when it comes to using a credit card, earning free money on the purchases you would be making anyways, whether that is in the form of airline miles, points to redeem gift cards, or even get a cashback check each year.  The problem is, once you start to see the rewards adding up, you may be tempted to start making extra purchases just for the rewards.  If you start to carryover a balance and pay interest, that would probably outweigh any rewards you would get in return anyways.

Lack of Emergency Fund

You never know when a large unexpected charge will come up, whether it’s an auto repair, home appliance replacement, or vet bill, that can put a strain on you if you don’t have the available funds and need to put on a credit card, trying to figure out how and when to pay back.  If you can set aside a few months’ worth of reserves, that would give yourself a nice cushion in case something comes up.  From there, saving your retirement would be your next bet, whether that’s a  401k vs ira, it may be best to consult a professional on your best option.

Using Credit Instead of Cash

When you pay with cash you actually see the money leaving your hand and going into the cash register, watching your hard-earned money leave pretty quickly, probably enough to make you wonder if the purchase is worth it in the first place, going back to the days when you would actually think about it and come back to finally make the purchase.  These days you can just swipe your card with no worries, that is until the bill comes in and scares you, but there really is no second guessing when it comes to swiping your credit card.

Not Tracking Purchases

If you don’t know where your money is going, now is the perfect time to take a look at last month’s credit and debit card statements and actually go line by line and see what and where all of your purchases were.  From there you can take a look to see which ones were necessary monthly bills and expenses, and what probably could have been avoided.  A good place to start would be looking at food expenses, specifically going out to eat, something you could have avoided if you would have gone grocery shopping and prepared your meals at home, for a fraction of the cost.

Smart Ways to Become Financially Successful

Handling the household finances can, I mean, is a tough job and is not to be taken lightly.  The wrong money moves and you could be set back years in debt, while risking saving for the future.  Whether it’s a family or friend that you can trust, or the opinion of a professional, it’s always a good idea to make sure that you are maximizing the potential of the finances, to make sure you are in good shape going forward, on the path to becoming financially successful.

Preparing for the Unexpected

You never know what life will throw at you, so it’s always a good idea to be as prepared as you can, so you don’t have to throw money on a credit card that you not only can’t afford right now, but will most likely not be able to pay back right away anyways, even years of debt.  If you are able to stash away a few months’ worth of expenses, you can be prepared in the even of an auto repair, vet bill, or even be able to cover you if you were to suffer an unfortunate job loss.

Living Within Your Means

While it may be common sense that you need to make sure that your income coming in is more than the amount going out, so that means making sure the expenses are within what you are able to comfortably afford, and not racking up a credit card bill that you are not able to afford, just to keep up with those around you.  We all make different salaries and can afford more or less than our peers, so instead of it being a competition, do what is best for you, as you will not regret it in the future when you don’t have mounds of debt to deal with.

Saving for the Future

Speaking of the future, there is not much more important than making sure you are able to not only keep up the lifestyle that you have right now, but that you have enough to survive on.  We cannot be sure that Social Security will be there, and even that it’s not going to make you wealthy, so it’s best to save for retirement, and the early you can save, the more it has to make money over time.  If you can take advantage of employer-matching contributions, you can avoid leaving free money on the table and earn even more.

Adjusting Over Time

Expenses change along with life, such as getting married, having kids, buying a new house, in that you need to be able to be flexible and adjust your budget and spending to ensure that it’s not only up to date, but still a working model and efficient for what you are actually needing in allotting of funds.  It’s no secret that most either don’t have a budget or had one but it failed, so if you can keep it going and updating as you go, you could be in even better shape financially for the present and future.

How You Can Save Money Around the Holidays

Now that we’re in mid-November, holiday shopping is about to go in full-force, if it hasn’t already.  This doesn’t just include Christmas shopping and party planning, but also around Thanksgiving as well, which can add up to be another costly holiday, which makes all the more reason to save money where you can.  By starting as early as you can at least you can break up the burden over many paychecks instead of all at once, but there are also a few tricks where you can maximize savings.

Set a Budget

If you’re not careful, you can add up your credit card balance pretty quickly when it comes to holiday shopping.  You get into the festive mood and want to overdo it on food, drinks, decorations, and gifts, so you keep loading up your shopping cart.  The best way to keep spending until control is to set a budget, or a sub category to your household budget that you have already.  This way, maybe it’s have a set amount of cash to use until it’s gone, you can spend what you can afford and hopefully not go overbudget with the risk of not being able to pay the balance and have to pay interest.

Build Credit Card Rewards

Probably the best reason to use a credit card is the amount of rewards that you can get in return for just making the normal purchases you would be making anyways, and get back rewards in the form of airline miles, points that you can redeem for gift cards, or a simple cashback check.  While you’re doing your holiday shopping you might as well not leave free money on the table and use your credit card instead of a debit card.  You just have to be careful though, when you see the rewards start to add up, you may be inclined to go on a spending spree just for the rewards, but if you can’t pay the balance and have to pay interest, that can outweigh any rewards you would get in return.

Take Advantage of Sales

The end of the year sales around the holidays can be the best time of the year not only for Christmas shopping, but also any items that you may need around the house.  While sales such as Black Friday, and most of that weekend really, not to mention sales every weekend to get you to go shopping, you can find basically anything on sale from TV’s, to clothes, to even cars.

Compare Prices

It used to be that when you are comparing prices you would have to drive all over town to see what that store was charging, wasting your whole day to maybe save a few bucks, but fortunately now whether you are in-store, you can always compare online to Amazon, or comparable sites within minutes to see if you’re getting a good deal.  Instead of wasting your day, you can click from website to website in the matter of seconds, to determine if you should buy the product in-store or online.

Smart Ways to Invest in Your Own Future

Although it may be decades until you retire, it may sound cliché to start the earlier the better, but it is 100% true.  The longer you wait, the less you will have in your account to compound over the next few decades.  By missing out on contributing a couple hundred dollars a month could be missing out on a few hundred thousand over time.  If you can make the sacrifices early on to free up extra money, the money you are contributing will feel like less of a burden so you can invest in your future.

Build an Emergency Fund

You never know what life will throw at you, so it’s always good to be prepared for the unexpected.  Instead of throwing an unexpected charge on a credit card when you don’t have the money, you risk going into debt, possibly taking years to pay off with interest accruing every month.  If you can put a few months’ worth of expenses in an account for an auto repair, home appliance upgrade, or even medical bills, you can have money available if you ever need it.

Compare Roth vs. Traditional 401(k)

Now while your emergency fund is important, you want to make sure that you are not leaving too much in there, otherwise it will not earn anything with the very low interest rates of a savings account.  From there you should be saving for retirement, whether that is a Roth IRA or employer 401(k) account.  With a Roth IRA you can contribute after taxes so that you can withdraw tax-free in retirement, while 401(k) will be taxed later, but reduces your taxable income to save on your income tax now.  That will depend on your situation whether it is better to worry about taxes now or later.

Don’t Leave Free Money on the Table

Speaking of employer based 401(k) accounts, you could be able to take part in company matching contributions, some even match up to 6% of contributions.  If you make $50,000 a year, that would be $3,000 that you and your employer would both contribute, for a total of $6,000.  By contributing less than 6% you are leaving free money on the table that not only are you investing, but missing out on the company match investments would could be a huge hit if you figure missing that amount compounding over the next few decades.

Leave it Alone

When you see the amount of money piling up in your retirement account you may be tempted to use that money to pay off debt, use for a down payment for a house, or even take out for a vacation, but you could seriously be jeopardizing your future by taking this money out.  By removing this money if will not be earning compound interest over time, so figure if you wipe out your account, there will be nothing there to grow.  Instead, it’s better to do the old-fashioned way and save up for big purchases, not to mention continuing to contribute to retirement accounts even if you are paying down credit card balances, as it will help you over time.

How to Help Reduce Monthly Expenses

It’s hard enough to make sure that the amount of money coming in exceeds what’s going out.  By the time you pay your monthly bills, not to mention food, gas, spending, plus hopefully creating an emergency fund and saving for the future, the money is spread pretty thin.  While, sure, you could get a second job to make a little more money, but who has time for that, so the next step is to try and free up money on monthly expenses wherever you can find a spot.

Try a Spending Budget

While clearly not for everyone since experts have said that two-thirds of the population doesn’t follow a budget, but that is probably not a good thing.  If you are having trouble freeing up extra money you can try allocating where funds are going in the month, and once the money is gone, it’s gone until next paycheck.  Sure, you will probably have to tweak how much you are allotting for, but that is part of the process in having a successful budget.  Maybe it will at least curb spending a bit and you can open up extra money each month.

Make the Tough Cuts

No one ever said saving money is easy, probably the reason why lots of people don’t.  If you are really having trouble freeing up extra money and you have exhausted all attempts, then it is time to make the tough cuts.  For starters, look to cutting the cable cord.  You probably don’t watch enough TV to necessitate spending a couple hundred dollars a month.  With the best shows on streaming services these days anyways, you can get an HD antenna for $20 to get local channels, and then get a streaming service or two like Netflix and HBO, and you’re probably good to go, without paying to flip around with nothing on.

Compare Prices

It used to be that comparing prices would mean you would see the product and then go store to store to find the lowest.  While it may have made sense before, with online shopping now there really is no need to waste gas and time on driving around town when you can click from website to website in a matter of seconds to see what the best price is.  The best part too is the free shipping, so you can shop for the best price and then have it shipped for free, arriving a couple days later.

Discounts are Key

Whether it is clipping coupons to go growing shopping, using Groupon, or mail ads that you receive probably daily, there is still no reason to pay full price on anything that you can help.  Sure, it takes a little legwork, but saving money is the goal in the end.  In addition to coupons, if you can get a good rewards credit card you can money back on the purchases that you were going to make anyways, whether it’s in the form of miles, points, or even rewards dollars.  There are plenty of discounts out there, if you are willing to put in the time to save money.

Smart Ways to Save on Your Food Budget

After paying out all of the needed monthly expenses, whiling continuing to fund your emergency fund, pay down debt, not to mention saving for the future, there may not be much left every month, making it all more important to save every way you can.  Depending on the size of the household/number of incomes, the food budget could take up a significant portion, after all we do need to eat, so any way to free up extra money in that department would be a huge help.

Avoid Going Out to Eat

Whether it’s stopping for coffee in the morning, going out to lunch, or taking the family out to dinner, the price adds up quickly.  After all, you’re paying for someone else’s services.  If you can avoid going out to eat, go grocery shopping, and prepare meals at home you will have significant savings add up right away.  Just think about how long you can make bread, lunch meat, and chips last for a week for a few dollars, compared to spending $10 a day going out to eat.  Or a better example, chopping up ingredients to meal prep salads for lunch.

Never Leave the House Hungry

While sticking to going grocery shopping is important in saving money every month, there are a few areas that are of note to stick to.  If you’ve ever gone to the grocery store you know that everything looks good that you begin to load up the cart with whatever sounds good, throwing your food budget out of whack by the time you ring everything up at the register.  Also, when you’re hungry the items will most definitely not be healthy options, so do yourself a favor and have a meal at home and have a full stomach by the time you head to the grocery store.

Don’t Forget the Shopping List

While you are having a bite to eat before you go, that would be a good time to take inventory of the fridge, pantry, and freezer, to see which items you need so you can start your shopping list.  There is nothing worse than going to the store and coming home without the item you went for, or even worse, spending more on items that you didn’t need.  So, if you can make a list before you go, even organized by section of the store, you will be in better shape entering with a plan, instead of wandering aimlessly.

Take Advantage of the Rewards Card

The store’s shopper’s rewards card is great, not only for in-store sale items, and promos such as the “10 for $10”, but you can also load digital coupons from the store’s website, loaded onto your card so they take off the price at the register.  The only trick is you might need to print the list so you remember.  While your rewards card is entered, by shopping that day you can earn fuel points for savings at the gas pump the next time you have to go fill up.

Ways You Are Jeopardizing Your Wealth

Sure, maybe money isn’t the most important thing to everyone, certainly you have always heard that money doesn’t equal happiness, but there is a fine line on needed enough money to live off, especially during the retirement years when you should be able to leave the workforce behind and enjoy out your remaining years stress-free.  Soon enough you’ll be of retirement age, so it’s best to focus on your personal wealth sooner than later, otherwise you will either be playing catch up, or have little to live off.

Putting Off Saving

A 401(k) account is a great way to save now that can grow over time, but the longer you put off, the less you’ll have to live off during retirement years.  The longer you put off, the more you will have to contribute to catch up to the years where you should have contributed more.  Some employers match contributions, so you should at least be contributing that much, otherwise that would be leaving free money on the table that could be growing over time.  If you are not able to use a 401(k), there are IRA options as well.

Spending is Out of Control

In order to free up extra money every month then you really need to reduce unnecessary spending.  Unless you curb spending, you really could be putting yourself at risk financially.  If you’re not sure where exactly the money is going, a good idea is to take a look at last month’s credit or debit card statement and look line by line to see what was a needed expense and what probably could have been avoided.  Add up all of those charges that could have been avoided and you could be shocked at what could be in your bank account instead.

Not Managing Risk

If you’re getting by with your finances on a month to month basis now that is great, but what is something unexpected happens and you have a huge charge come in such as a needed auto repair or home appliance, how would you pay for?  Probably on a credit card, at which you are then in debt, trying to pay back over time, at which you could be struggling to pay.  If you can create an emergency fund of a few months’ worth of expenses, you could give yourself a pretty good cushion to cover yourself if any unexpected charges come in.

Looking for the Next Get Rich Quick

If you are thinking of playing the lottery next, take a look at the odds of winning and hopefully that will change your mind on playing every week.  The get rich quick scheme are just that, too good to be true, so also avoid any of the Tupperware or candle parties, trying to make a living, other than enjoying some discounts for your friends.  If you are looking for extra income, try getting a second job in your free time, or even look to selling items that are otherwise sitting around the house collecting dust.

4 of the Biggest Credit Card Myths

While there are virtually endless amounts of credit card offers that come in the mail, or you have one that you’ve had but only keep for emergencies, you may not be taking full advantage of the benefits of all that a credit card can do for you.  While they may have had a bad reputation in the past, there are actually more pros then cons for having one, as long as you can curb the spending, so ignore any myths that are out there.

Having a Card is Unnecessary

Well, it’s not life or death that you have a credit card, but they can actually provide plenty of benefits that you would not get otherwise with a debit card.  They provide great fraud protection, especially these days with the number of hacks, if your card is breached, then any charges that you are hit with do not clean out your bank account and can remain pending on the credit card until the dispute process is resolved.  In addition, credit cards offer some of the best rewards, which you can earn cashback on the normal purchases that you would make anyways, so why turn down free money.

Credit Score Isn’t the Most Important

Unless you don’t mind paying a higher APR % and waste money on higher interest payments every month, let alone getting approved at all, go right ahead and let your credit slip.  For those that do care about their credit and strive for it to be the highest it can, are rewarded with the best interest rates on the market, which could save hundreds of dollars a month on say, a mortgage, while keeping car payments lower, and able to pay little interest when repaying a credit card balance.

Closing an Account with Zero Balance

Getting into debt can be a huge weight on your shoulders, and depending on the balance, could take years to get out of, so when you finally do rid yourself of a credit card balance, the first reaction might be to close the account, cut up the card, and never use a credit card again.  Now while you can opt for cutting up the card and never using again, you should actually keep the account open so that the available credit actually improves your score, and closing could great reduce, depending on the size of your other accounts and the balance against it.

Nothing Wrong with Making the Minimum Payment

Now while you will certainly be in good standing with the credit card company by making the minimum payment, as I’m sure you would be their favorite customer, with your monthly payment just barely covering the interest payment and doing little to chip away at the actual balance, could in fact take decades to get rid of the balance.  Sure, you will not be penalized by the company for making the minimum but you are only hurting yourself by wasting money away every month on interest, when it could be best used for more important things like saving for the future, or even taking a vacation.