Surveys found that half of American households report having trouble making even the minimum payments on their credit cards. What’s going on?
A lot of people are using credit cards for credit and not just for convenience, and they find themselves living beyond their means. So, here are 4 simple rules for using credit cards and if you can’t follow all of them, you need to perform some plastic surgery as soon as possible and stop using the cards.
- Use a credit card only for budgeted purchases. Oh yeah . . . that means you have to be living on a budget (spending plan). If you’re not, it’s going to be tough to stay out of credit card debt. If you need help with starting a budget, visit www.compass1.org and click on “Connect with a Coach.” One of our volunteer Compass Coaches will contact you online to assist you.
- Pay credit cards off on time and in full every month. This way there’s no interest charges, no late payment fees, and no debt.
- The very first month you can’t pay a credit card bill in full, take out the scissors, and destroy the card.
- Just because you can afford to buy something doesn’t mean you should. Force yourself to wait a couple of days and pray about the decision. More often than not, if it’s an impulsive decision, the impulse will go away, and you will save money.
If you are in serious credit card debt, remember what Proverbs 22:7 says, “The borrower is slave to the lender.” The Lord wants us free to serve Him and not our creditors.
So, begin to “snowball” your plastic by making the minimum payments on all the cards, and focus on paying off the one with the smallest balance. If you need help from a debt repayment company, we recommend checking out www.repaydebt.org (ClearPoint). They used to be named Consumer Credit Counseling Service of Atlanta and for decades have worked with consumers helping them pay off their cards.
When you think about it, a budget is only as good as what you recognize you’re going to be buying. Unfortunately, a lot of people leave these items out of their budget.
- Pets. There are regular vet visits, food, treats, and kennel stays. Americans spent about $55 billion on their pets last year.
- Travel. Trips by auto or plane to see family, go to class reunions, go on vacations, or go see friends.
- Home Maintenance. There are all kinds of “sneaky expenses” – leaky gutters, painting, replacing the water heater, and repairing a leaky roof –the list goes on and on.
- Non-monthly bills, such as, property taxes, and homeowners and auto insurance.
- Gifts. Gifts for birthdays, holidays, office parties, graduations, weddings . . . well you get the idea. Budget what you can afford for gifts and stick to it.
- Fun Money. My mom used to call it Mad Money. It’s a good idea for husbands and wives to have a monthly allowance that can be spent any way they want until the allowance is used up.
Remember, that a budget – I prefer to call it a spending plan – can be your friend. It’s the financial tool that will help you get out of debt, become more generous, and save and invest for the future. To learn more log on to www.compass1.org.
Warmly in Christ,
When you hear the word budget, what’s your reaction? If you’re like most people, confining or complex come to mind . . . a financial straight jacket that’s going to require hours of tedious bookkeeping.
That’s why we call it a Spending Plan – because it’s simply a way to make sure you spend your money in ways that are most important to you instead of getting caught up in impulsive spending. Proverbs 27:23 says, “Know well the condition of your flocks, and pay attention to your herds; for riches are not forever, nor does a crown endure to all generations.” These days fewer of us have flocks and herds, but the principle of staying on top of your finances still applies.
So, the first step is to decide the best type of spending plan for you to use. You might choose to use a pencil and paper budget, a software program, or a popular online budget like www.Mint.com which is free.
Then, track your income and spending for 30 days to develop an estimated budget where you’ll break down your spending by category; for example, giving, housing, food, and transportation. You can visit www.compass1.org to see suggested percentages of what you should be spending for each category.
Once you start your Spending Plan, you’ll realize that it’s dynamic as your income changes and as life happens – you’ll always be tweaking it to make it more accurate.
A budget – a spending plan – is the most effective financial tool to help you make real progress on your journey to true financial freedom.
Warmly in Christ,
Tell me the truth! Have you already broken your New Year’s Resolutions yet?
That’s the reason that I don’t do resolutions But I do work on goals for the year. I break my goals down into 5 categories: SPIRITUAL, PHYSICAL, FAMILY, WORK & FINANCIAL
Whether you make resolutions or establish goals, here’s the first thing you need to know. It’s never too late to start or restart a “New Year’s” resolution or annual goals. The important thing is that you do it. So if you’ve already broken your resolution, say, to start paying down your debt, don’t lose heart. Just pick yourself up and start over. Here are three things to consider:
- Re-examine your resolution. Did you really want to achieve that goal? If you’re not committed to it, chuck it. But if it’s still important to you—and getting out of debt should be—then make it a new priority.
- Start with “baby steps.” Set a one-day goal and don’t think about the whole year ahead. Just meet your goal today. Then do it again tomorrow, and the next day, and so on.
- Tap into the true source of inspiration, the Holy Spirit. Flesh can’t conquer flesh, but the Spirit can. Galatians 5:16 says, “Walk by the Spirit, and you will not carry out the desire of the flesh.” Ask the Holy Spirit to renew your mind and keep you on track.
If you need help setting up a budget or finding ways to cut spending and save money, that’s why we exist. Log on to www.compass1.org
Warmly in Christ,
The first time I saw her, I knew! I knew I wanted to marry Bev and spend the rest of my life with the most beautiful, captivating woman I’d ever seen. The last thing to enter my mind: is she out of debt and using a budget?
When couples first fall in love they have a hard time believing they will ever have arguments over money. But it’s one of the leading causes of fractured marriages. We’ve learned in working with thousands of newly married couples that before you tie the knot, it’s super important for you and your fiancé to talk about some money issues.
So, for the long term health of your marriage and your checkbook, here are some simple steps to take and questions to answer:
- Be completely transparent and honest about your finances. Trade credit reports and financial statements with each other. Think no financial surprises. Nothing damages the trust relationship with your new spouse more than discovering a hidden financial problem.
- Talk about your philosophy of giving, spending, saving, and debt. Disclose to your fiancé whether you are a saver or a spender.
- What are your financial goals?
- Which one of us is going to do the bookkeeping and pay the bills?
- Decide if you both are going to work. What happens when you have children – will the wife want to be a stay at home mom?
- How are the two of you going to combine your assets and income? If one of you has the view that the money they earn is their money, and not our money, this is a red flag.
The best advice we gave our children when they became engaged, was to encourage them to participate in a Navigating Your Finances God’s Way or a Money and Marriage God’s Way small group study. Nothing is healthier than both the husband and wife understanding God’s way of handling money.