For a lot of people it’s easy to get caught up in the world of plastic. Credit Cards that is. Instant gratification, but you’ve got to pay for it later. While I never live beyond my means and always pay by Credit Cards off (CC for short), some months I go beyond my set budget which means I put less away into savings. I’ve been doing it quite a bit lately. And I don’t really have all that much to show for it. Meaningless things (maybe a deeper meaning there). Mainly online purchases. It is so easy to just push a button. I had boxes from Amazon, Zappos, Nordstroms, etc. showing up at my house practically every other day. I would inevitably feel guilty and return some (but not all). My savings wasn’t feeling the love it normally does.
It all kind of started when I bought my new car (more on the new car later). For some reason I felt that since I bought this new car, I had all this money and needed to keep up with the Jones’ (what Jones’?, I don’t know any Jones’). Reminded me of this funny cellphone commercial – “I think I drive the same car as a Hip Hop Mogual because I’m feeling richer effect”. I had the “feeling richer effect”. All my CC’s are paid off and I have returned most of the items (I did keep and wear a few things). And now I am on a strict CASH only purchase budget. I had always had a monthly budget for food, rent, bills, incidentals and enough left over for investments and savings. Being on a budget and putting money away was the reason I was able to afford the car in the first place.
To know where your money is spent, you need to track it. There are a lot of programs out there to track your purchases, but I’m kinda old school and just use Excel. Simple spreadsheet with columns for different categories. I enter in all my purchases and expenses. Now, I’m all CASH. As soon as I am paid, I transfer the designated amount into my savings and pull out Cash for groceries & incidentals. Bills are paid online. I used to be really good about not over-spending, but needed to take drastic measures to build my savings back up.
CC’s can be dangerous and I know a lot of Americans have thousands of dollars outstanding on CC’s. I am so fortunate for that not to be the case for me. Need to take charge and make sure that never happens (knock on wood).