Budget Busting Habits

We can do things differently or buy things differently in order to loosen the budget, but certain things are created to work against us to bust those budgets. The end result is we fail. The best way to live on a tight budget is to tear up the bank card... and credit cards. When the habit to use bank cards or credit cards is formed, instead of the wiser habit of using cash, the budget is typically busted. Yes, it’s a habit and like any addiction it needs to go.

So the first thing to do to balance a budget is to sit down and create a budget, with cash flow as smooth as possible. This means if the paychecks come in weekly, put that week’s mortgage or rent money aside immediately. Next, look up the dates of all other bills. Make sure they are paid on different weeks than other bills. This will smooth out the weekly budget, so there are fewer ups and downs.

After creating a cash flow chart, complete with any money to save for a rainy day (for the lucky ones to afford such a luxury) pull out the desired cash each week. Once that cash is gone, that’s it. It’s gone until next payday. Yes, cash is truly king. By limiting a budget to cash there are no more mistakes, where the husband or wife spends or uses a bank card or credit card without the other knowing.

Now in order to fully understand how important it is to maintain a strict budget, we must first understand the credit card game. Yes, it’s a game and it’s been set up for us to lose. The larger our habits of using the cards, the more likely we will make minimum payments, or lose track of our budget, or pay late. This is all very good for the credit card company. Since banks are now a part of credit cards, this decreases the money in our accounts very quickly, which means a higher chance of paying an overdraft fee, the bread and butter of the bank’s income from us.

Although this is hard for most of us to understand, this idea of living on what we earn will negatively affect our credit score with one of the companies. There are 3 companies which do credit ratings, and one calculates their score by how often we use our credit cards. Yes, by taking less risk, by not using the cards, our credit score goes down. They like to see 3 credit cards in use at all times. But, unless we’re buying a house does it really matter? Later we can easily raise our scores. In the meantime, it is of more benefit to break the card habit.

Not only will we be helping ourselves, but we will be helping all those stores, especially the small businesses, who are currently pressured into accepting these bank cards... for a fee. These small businesses would much rather not pay a percentage of their profits to credit card fees and offer us lower prices in return. Let’s help them. Isn’t it time to return to cash? To stop the card habit? To push these budget busters from our lives?