Month: November 2020

  • 11 Ways to Stick to a Budget Every Month

    I used to blow my budget almost every month. I’m not proud to admit it, but I’m guessing plenty of other people can relate.

    While I had the best of intentions, I was making a lot of mistakes with my budget. I wasn’t being realistic, I wasn’t planning ahead, and I wasn’t leaving any room in the budget for fun.

    And let’s be honest — budgets like that just don’t work. When you restrict yourself or create a budget that doesn’t fit your life, it’s nearly impossible to stick to it.

    Over the years, I’ve learned plenty of tricks on how to stick to a budget every month. Picking up just a few of these budgeting tips can seriously transform your finances!


    11 Ways to Stick to Your Budget Every Month

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Be realistic

    One of the biggest mistakes that people make when they set up their budget is that they simply aren’t realistic. They budget based on what they’d like to spend in a perfect world rather than what they’ll really be able to spend.

    People can get a little over-ambitious when it comes to their budget — trust me, I’ve been there! I would set an eating-out budget, and then my husband and I would go way over it every month.

    Finally, we sat down and admitted that the amount we were budgeting wasn’t realistic. We love eating out, and it’s something that we value. Our budget can and should reflect that.

    If you find that you have a hard time sticking to your monthly budget, go through and see if there are any categories where you aren’t being fully honest with yourself.


    Budget differently for every month

    People I talk to about this topic are almost always surprised to hear that their budgets should look different every month.

    Traditional budgeting apps like Mint give the impression that a budget is a set-it-and-forget-it tool. You create it once, and then you’re supposed to stick to it every month.

    But the fact is, no two months are the same. And as a result, no two monthly budgets should look the same.

    At the start of each month, sit down and look at the month ahead. What’s on your calendar? Look for special events, holidays, birthdays, etc., that might mean you’ll be spending a little extra money in one spending category. Then you can figure out where you can cut back this month to make up for it. 


    Use sinking funds

    You know those pesky expenses that you don’t budget for because they don’t come up every month? But then, when they do come up, they totally break your budget? It’s okay, we’ve all been there! I used to go over budget nearly every month because of an unforeseen expense that, honestly, I should have foreseen. 

    That’s where sinking funds come in. Sinking funds are a way of saving up for annual expenses all year long. Let’s say you spend $600 every year at Christmas. Instead of trying to find room for $600 in your December budget, you can set aside $50 per month all year long.

    You can use sinking funds for tons of different expenses, including:

    • Holidays
    • Birthdays
    • Vehicle registration
    • Car repairs
    • Medical expenses
    • Pet expenses
    • Association dues
    • Home repairs
    • Tuition
    • Annual subscriptions


    Budget fun money

    So many people avoid budgeting because they think it’s restrictive and prevents them from spending their money on things they enjoy.

    But that doesn’t have to be the case!

    Rather than looking at my budget as restrictive, I look at it as incredibly freeing. I can spend money on my hobbies without the slightest bit of guilt because I know I’ve budgeted for them.

    If there’s something that brings you joy and you enjoy spending money on, make room for it in the budget!

    You can even budget for spontaneous purchases. If you know that you and your partner love a last-minute Sunday brunch, set aside money every month for exactly that.


    Schedule your purchases in advance

    Impulse purchases can kill your budget faster than just about anything else. An easy way around that is to schedule your purchases in advance.

    Let’s say you’re at the store and you see an outfit that you absolutely must have. You can totally buy the outfit, but don’t buy it on the spot. Instead, go home and look at the budget. 

    Do you have room in your clothing spending category for this month? If not, schedule the purchase for next month.

    Even if you know you have the money in the budget, going home and scheduling the purchase for a future date is still a good idea since it prevents you from impulse purchasing. It forces you to really make thoughtful purchases.


    Identify your spending triggers and avoid them

    We all have our unique spending triggers. For some people, it’s sale emails in their inboxes. For others, it’s their favorite influencer rocking a new outfit or accessory on Instagram. Chances are, you know what your biggest triggers are.

    Once you know what your triggers are, you can work on avoiding them. Examples might include:

    • Unsubscribing from store emails
    • Unfollowing people on social media who make you want to spend money
    • Removing your credit card information from your favorite store’s website


    Use a zero-based budget

    The premise of a zero-based budget is that you give every dollar a job and budget down to zero.

    Let’s say you bring home $4,000 per month. You wouldn’t just budget for your monthly bills and then leave the rest as spending money. Instead, you’d decide exactly how much you plan to put toward discretionary spending, saving, and your debt payoff plan.

    Using a zero-based budget can help you stick to your budget because there simply isn’t extra money to work with. You’ve already allocated your excess money to debt or savings, so you can’t afford to impulse spend on food or clothes.

    The budgeting app You Need a Budget is hands-down the best app out there for zero-based budgeting!


    Plan your meals ahead of time

    I used to never meal plan. Instead, I’d head to the grocery store every week and just stock up on foods I liked. But then I’d either end up throwing food away at the end of the week, or I wouldn’t have enough for every meal and I’d end up eating out.

    Planning your meals ahead of time ensures that:

    • You only buy what you need
    • You’ve accounted for every meal
    • You can estimate the budget ahead of time


    Pay yourself first

    It’s easy to tell yourself that you’ll transfer whatever money you have left at the end of each month to savings. But inevitably, the end of the month rolls around, and there’s nothing else.

    That’s where the concept of paying yourself first comes in. When you pay yourself first, you decide how much you want to save each month. Then, you transfer that money to savings as soon as you get paid. And you only have what’s left over to spend the rest of the month.

    Paying yourself first can be used for literally any financial goal, including building your emergency fund, saving for a specific purchase, or paying off debt.


    Track your expenses

    I’m embarrassed to say that I was in my mid-twenties before I ever tracked my expenses. My partner at the time and I made a decent amount of money but never seemed to have any left. Finally, I decided to start tracking where our money was going.

    If I’m being honest, I was a little horrified. I couldn’t believe how much we were spending on takeout each month!

    Once I knew where my money was going, I could decide where I wanted my money to be going instead. And tracking my expenses throughout the month helps me to make sure I’m sticking to my plan.

    I use the budgeting app You Need a Budget to track my expenses throughout the month.


    Figure out your “worth-it” expenses

    One trick I recommend to people is to keep a spreadsheet of their expenses and then go through it later and decide whether each expense was worth it to them. In other words, are they glad they made that purchase, and would they make it again?

    A really good example of this comes into play with eating out. My husband and I love eating out, and our date nights are sacred to us. They’re always a worth-it expense.

    But we really don’t eat at chain restaurants or fast food often. So when we impulsively grab a quick dinner because we don’t feel like cooking, it’s less likely to feel worth it. I remember that when we’re feeling the urge to spend, it helps us to save unless it’s a worth-it expense.

    You can use this tool for so many things. Another example for me is makeup. I don’t wear makeup every day, and I’m fine with the drugstore stuff. Therefore, expensive makeup just wouldn’t be worth it for me. But there are plenty of other areas in my budget where I’m happy to splurge for the nicer stuff. For example, I will never pass on seeing my favorite bands in concert, no matter the cost of the tickets.


    Final Thoughts

    We’ve all gone over budget — don’t beat yourself up over it! There are plenty of easy tricks that you can start implementing in your budget and your life to help you stick to a budget every month (or at least almost every month).

  • What is a High-Yield Savings Account (and Why You Need One)

    I haven’t always been good at saving. I’ve always kept a savings account at my regular bank, but admittedly, I didn’t put much money into it.

    I always said I’d transfer whatever money I had left at the end of each month. But whenever the end of the month rolled around, there was nothing left.

    When I finally decided to turn my finances around, one of the first things I did was build a small emergency fund.

    But then the problem was that I had a large sum of money sitting in the bank, earning next to nothing in interest. So I finally got around to opening a high-yield savings account, meaning my money is making even more money.

    Are you going to get rich using a high-yield savings account? Definitely not. But they’re an excellent first step for anyone who wants to maximize their savings and earn a bit of extra money each month without any additional work.


    What is a High Yield Savings Account (And Why You Need One)


    What is a high-yield savings account?

    A high-yield savings account (HYSA) is just like any other type of savings account, except it pays a much higher return.

    The savings account at your regular bank pays you interest each month. But in most cases, it’s a few cents per month. Not really anything to get excited about. But the rates on high-yield savings accounts can be significantly larger.

    Consider this: the rate on a typical savings account is about 0.05%. The rate on a high-yield savings account is usually at least 0.50%. And when interest rates are higher, it can be 2.0% or higher. So the rate on a high-yield savings account is 20x to 40x the rate on a traditional savings account.


    How do high-yield savings accounts work?

    High-yield savings accounts use compound interest, meaning you earn interest each month, and then that money gets added to your principal. 

    Your interest rate is known as your APY (annual percentage yield). But most of these accounts pay monthly.

    Imagine that you have your $10,000 emergency fund in your savings account with an interest rate of 1.0%. 

    In the first month, you’d earn $8.30 in interest. The next month, you’d earn interest on the full $10,008.30. It doesn’t sound like it makes a big difference, and it’s definitely not enough to get rich. But after one year, you’d earn about $100.46 in interest. 

    And when interest rates are higher and your savings account has a return of 2.0% or more, you would have earned $201.84 in your first year.


    What should you use a high-yield savings account for?

    A high-yield savings account is not an investment. If you’re looking for an investment opportunity to grow your wealth, a savings account isn’t a replacement for a brokerage account.

    It’s also not the best place for money that you expect to need soon. It can take a few days to transfer money from your high-yield savings account to your checking account. For money you use regularly, it might be better kept in a savings account at your normal bank or in your checking account.

    Here are some good uses for your high-yield savings account:

    • Your emergency fund. This is my favorite. It’s just a big chunk of money sitting in the bank not getting touched. By putting it in a high-yield savings account, I can earn a little money on it each month. And here’s a tip for you: Every month when my emergency fund earns interest, I put that money toward one of my other financial goals. 
    • Financial goals less than 3-5 years out. The stock market can be a great way to save for financial goals, but not short-term financial goals. The market can be volatile, and the last thing you want is to have your brokerage account take a nosedive right before you plan to use that house downpayment fund. As a result, use a savings account for goals less than 3-5 years out. Brandon and I want to buy a house in the next couple of years, so we’re using our Ally savings account to save.


    Is my money safe in a high-yield savings account?

    As I mentioned earlier, a high-yield savings account is not an investment account. And it doesn’t come with the same risks as investing. In other words, there’s no chance of your account balance decreasing unless you actually take money out.

    As long as the bank you choose is federally insured (it should say if it is on the website), your money is insured by the FDIC up to $250,000 per person across all of your accounts.


    What to look for in a high-yield savings account


    The interest rate should be one of the biggest factors you consider when choosing the right savings account. After all, that’s the whole point, right?

    The interest rate you can get is going to vary by bank. Right now (November 2020), the good ones are anywhere from 0.50% to 1.0%.

    Keep in mind that they can change. When I signed up for my Ally account, the interest rate was 2.0%. Right now, it’s 0.60%.

    When the Fed lowers interest rates, rates go down across the board — including in high-yield savings accounts. When interest rates increase again, you can bet that the rates on these savings accounts will also increase.

    And if you sign up for an account and the rate suddenly goes down, don’t panic. If one bank is lowering its rate, chances are the rest are too.

    Edit: This post was originally written in 2020 when interest rates were at historically low amounts. At the end of 2022, when interest rates are higher, the rates in HYSAs are nearing 3%.



    Before signing up for a high-yield savings account, read up on what special features the bank offers. For example, Ally Bank offers a bucket feature. You can create individual buckets within your savings account for different things you’re saving for. I have one bucket for my emergency fund and one for my future house downpayment. 



    Obviously, you want to be able to get ahold of your money when you need it. And I’ve seen many people who prefer to keep their money in a savings account at the same bank as their checking account so they can do instant transfers.

    While I agree that you should make sure you can easily transfer money from your savings account, I actually like the idea of having it at a different bank.

    I use my high-yield savings account for my emergency fund. If I need to transfer money, it takes 2-4 days to hit my checking account. This means that I can’t impulsively spend that money. But 2-4 days is still short enough that if I lose my income and need to live off my emergency fund, I’ll have it in my checking account in time.



    Anytime you’re going to sign up for a financial product, you should find out what fees come attached to it. None of the best high-yield savings accounts I’ve seen have fees. So if the one you’re looking at does, run the other way.


    Which is the best high-yield savings account?

    There are so many high-yield savings accounts to choose from, and there really isn’t one that’s better than all the rest. It’s all about finding one that feels good to you.

    My favorite savings account is Ally (<< that’s not an affiliate link, I just really love their product). I really love the buckets features. I can visually break up my financial goals without having to open multiple savings accounts.

    I also use a Capital One high-yield savings account for my business — it’s where I keep my tax money until it’s time to send it to the IRS.

    A few other popular options are:

    • Marcus by Goldman Sachs
    • Citibank
    • SoFi


    Final Thoughts

    A high-yield savings account is a great way to earn a little extra cash on the money you’d be putting into savings anyway. It’s the perfect place to store your emergency fund or the money you’re saving for a big financial goal.

  • Financial Tips for Newlyweds: 5 Things to Do After Getting Married

    Brandon and I had a four-month engagement before our wedding for no other reason than that once we decided to get married, we just wanted to be married. 

    Wedding planning is one of the most exciting times of someone’s life.  And needless to say, planning your dream wedding in four months takes a lot of planning and preparation.

    And the planning isn’t over once the way day is over. Instead, you move from the wedding planning checklist to the newlywed financial checklist.

    Unfortunately, many people go into marriage without thinking of the financial implications. There’s far more to marriage and finances than we can discuss in one article, we can at least cover the basics.

    If you’re a newlywed or plan to get married soon, make sure to do these five financial tips for newlyweds.


    Financial Tips for Newlyweds - 5 Things to Do After Getting Married


    Decide how you’ll manage your newlywed finances together

    There’s no right or wrong way to manage your finances as a married couple. What really matters is that you come up with a system that works for you and that you have open communication about money. Here are a few different methods you can use to manage your money together.

    • Joint finances: You and your partner go all-in and combine your bank accounts. With this money management style, the two of you have joint checking and savings accounts. All money flows into and out of the same accounts.
    • Separate accounts: You and your partner each maintain your own bank accounts. You decide together how you’ll split expenses and who will be responsible for covering each bill.
    • Joint and separate accounts: You and your partner have a joint checking bank account where your income flows into and expenses flow out of. You also each maintain a separate checking account for personal spending.

    Read More: The Best Budgeting Apps for Couples to Manage Money Together


    Update your insurance coverages and beneficiaries

    One of the first things you’ll want to do after getting married is to update your insurance policies and beneficiaries. You want to make sure that if an emergency happens, you’re both prepared.

    • Life insurance: If you don’t currently have life insurance, now is a good time to set one up. While no one wants to think about the worst-case scenario, you don’t want to leave your partner unprepared if something happens to you. If you already have life insurance, be sure you both update your name and beneficiary as necessary.
    • Health insurance: If one of you will be joining the other’s health insurance policy, check with your employer to figure out what paperwork they’ll need to make that happen. If you each have health insurance through your employer, you can look at the policies and see who has a better or most cost-effective policy.
    • Car insurance: While your car insurance cover might be easy to overlook after you get married, this one is important! If you don’t already have a joint policy, now is a good time to set one up. If you do have a joint policy, be sure to update your name and marital status. When I got married, my insurance premium went down considerably!


    Update your financial accounts

    After you get married, you and your partner might decide to combine your finances and have joint bank accounts. You might also decide to add one another as authorized users on your credit cards. Even if you choose to maintain separate accounts, you can still update the beneficiary on your accounts. 

    Your checking, savings, retirement, and investment accounts can have beneficiaries listed so that if something happens to you, the money in the accounts will go to your spouse. 


    Create an estate plan

    No one enjoys talking about one of you dying right after you’ve gotten married, but it’s a necessary discussion. It’s important that both of you have an estate plan in place so that if something happens, there’s a clear plan for your assets.

    One question to ask yourself when estate planning is: how can we simplify the process in the event that one of us passes away? As someone who has been the executor of an estate, I can’t emphasize enough just how important this is.

    Estate planning is even more important if you have children, either with your current partner or from a previous relationship. In that case, you’ll want to set up guardianship for your child(ren) in case something happens to you, as well as make sure they’ll be taken care of financially.

    You may want to consult an attorney to help establish a will or trust, medical directive, and power of attorney. They can help you determine what steps you can put in place to protect each other and other loved ones.


    Set joint financial goals

    Now that you’re married, it’s time to set some joint financial goals together. While many of the financial tips for newlyweds on this list are serious and, frankly, a little depressing, this one is actually fun!

    Setting financial goals together is all about dreaming about and making a plan for your future. Sit down together and do some brainstorming about what you want your life to look like one, five, ten, and even twenty years from now. Where do you want to live? Do you want to travel? Buy a home? Start a business? Retire early? Will you have children?

    Once you have that vision, write down all of the goals you would have to reach to get there. While some of these goals may seem a long way off, now is the time to start preparing your finances for them!

    Read my entire guide on how to set financial goals to help you get started.


    Final Thoughts

    Getting married is an exciting time. Allow yourself to be swept up in it for a while! But make sure that once you tie the knot, you take time to complete these financial tips for newlyweds.

  • How to Pay Off Credit Card Debt Fast

    I know first-hand how financially and emotionally draining credit card debt can be.

    The interest rates on credit cards are insanely high, making it hard to make real progress paying while it off. But they are also all kinds of crazy feelings that credit card debt brings up.

    Guilt from having gotten yourself into debt.

    Resentment at whatever outside factors led to you going into debt.

    Fear that you’ll never pay off the debt.

    Trust me, I’ve been there and I’ve felt all of those feelings. But I’ve also learned how to overcome the roadblocks that keep us in debt, and so in this article, I’m teaching you how to finally pay off your credit card debt and how to do it fast. 


    How to Pay Off Credit Card Debt Fast

    There are affiliate links in this post, meaning I may make a small commission at no additional cost to you. For more information, see my full disclosure policy here.


    Pay more than the minimum payment

    Have you ever rationalized paying just the minimum payment on your credit card because that’s all you “had to” pay? Or told yourself it wasn’t a big deal because it was such a small amount every month?

    Credit card debt can be deceiving. It seems like it’s not a big problem because the monthly payments are so low.

    But here’s the catch — the minimum payments are low because credit card companies want you to stay in debt.

    Every month that you don’t pay off your balance in full, they get to charge you interest. That’s how they keep making money off you.

    I’m going to let you in on an eye-opening fact.

    If you have $5,000 in credit card debt with a 22% interest rate (fairly standard for millennials) — you wanna know how long it’s going to take you to pay it off?

    23 years.

    Yes, you read that right. $5,000 will take you just over 23 years to pay off. And the even scarier number?

    You’ll pay over $8,500 in interest.

    Now that you understand how important it is to get this debt paid off fast, you’re ready to dive into the rest of the tips.

    Read More: How We’re Planning to Pay Off Six Figures of Debt


    Focus on one debt at a time

    When I get new clients that have credit card debt, they’ve usually tried to tackle their credit card debt before. They know they need to make more than the minimum payment, so they pay a little extra to each card every month.

    Here’s the problem with that strategy: you’re paying each card off slightly faster than you would have, but aren’t really gaining any momentum.

    Rather than spreading your extra cash over all of your debts, focus on one and go all in. 

    Now you might be asking yourself — how do you decide which debt to focus on first?



    The two most popular debt payoff methods are the debt snowball and the debt avalanche.

    Debt snowball

    With the debt snowball, you make the minimum payment on all of your debts except the one with the smallest balance. You put any extra money each month toward that debt.

    Once you pay off the smallest debt, you take all the money you were putting toward it and instead put it toward your next smallest debt. Do that until you’ve snowballed into one giant monthly payment you can pay toward your biggest debt


    Debt avalanche

    The debt avalanche is similar to the debt snowball. But instead of paying off your debts smallest to largest, you first focus on the debt with the highest interest rate and slowly work your way toward the small interest rate.

    While the debt snowball gives you emotional victories when you pay off your smallest debts, the debt avalanche will actually save you the most money, since you’re tackling that high interest first.


    Use a balance transfer to lower your interest

    I’m going to be upfront and tell you that there are some mixed reviews in the personal finance world when it comes to balance transfers. Let me tell you where I stand.

    I’m a huge fan of balance transfers.

    A balance transfer is when you open a new credit card and then transfer the balance of an old credit card to the new one. 

    These are a useful tool because when you open a new card, you typically get 12-18 months interest-free. This can help you to pay off your credit card debt much faster.

    The reason that some personal finance experts recommend against balance transfers is that they act as an enabler. People transfer their balance, but then continue making the minimum payment.

    With my money coaching clients, that’s simply not allowed. We use these cards as a tool to help you pay off your debt way faster because your money isn’t going toward interest. 

    If you’re going to use a balance transfer card, you have to commit. Commit to making more than the minimum payment so you can pay the card off before the interest kicks in.

    Interested in learning more? I have an entire guide about balance transfers and how to do one. Additionally, here are my favorite balance transfer cards for paying off credit card debt:

    • Chase Freedom Unlimited: This is hands-down my favorite all-purpose credit card. It comes with higher cash back than you’ll find on many other cards, along with extra rewards on bonus categories. Plus, it offers 0% for 15 months on balance transfers.
    • Capital One Quicksilver: This was my very first credit card, and it’s one I still have in my wallet. In addition to the cash back rewards it offers, you’ll get 0% for 15 months on all balance transfers.
    • Discover It Cash Back: This card is another one I’ve had for years, and it offers elevated cash back on certain bonus categories. Plus, you’ll get 0% for 14 months on all balance transfers.


    Try a debt consolidation loan

    A debt consolidation loan is when you borrow money from a financial institution (typically in the form of a personal loan) to pay off your credit cards. Then, rather than making several monthly payments to several credit cards, you have just one monthly payment.

    I think debt consolidation loans can be a useful tool for people who have a lot of credit card debt and either can’t get a balance transfer card big enough to pay it all off or who know they won’t be able to pay the debt off within the next year or two.

    Debt consolidation loans come with fairly high interest rates, so they aren’t my first choice. But if a balance transfer card doesn’t work for your situation, then this type of loan can help you save money and pay your debt off faster.


    Figure out where you can cut costs

    I’ve got some news that you probably aren’t going to like. Finding the right tools, like balance transfer cards and debt consolidation loans, isn’t going to get your credit card debt paid off.

    What’s actually going to do the trick is putting more money toward your debt. And in most cases, that requires cutting back on some expenses.

    You might think you’ve done everything you can to cut back and that there’s nowhere else that you can save. And that might be mostly true, but here are a few other ideas to consider:

    • Start a budget. Far too many people don’t have a budget to help them organize their money. If you don’t have one, start one. If you do have one, review it and see where you’re spending a lot of money that you could spend less. 
    • Negotiate your bills. For most of us, it doesn’t occur to us to negotiate our monthly bills. But you totally can! And better yet, an app like Trim can do it on your behalf.
    • Use cash-back apps. There are plenty of apps out there that give you cash back for purchases you make online and in-store. My favorites are Rakuten for online purchases and Ibotta and Fetch Rewards for in-store purchases.

    Read More: 17 Ways to Save Money on a Tight Budget


    Increase your income

    There are only two ways to make more room in your budget: cut your expenses or increase your income. And you and I both know we can only cut our expenses so much. But there’s no cap on how much you can earn.

    There are so many ways to increase your income. Some of my favorites include:

    • Become a freelancer. While working full-time, I was also making thousands of dollars per month as a freelance writer. It finally allowed me to quit my job, and I still freelance write alongside my money coaching business. You can freelance doing just about any type of job!
    • Join the gig economy. Apps like Uber, Doordash, Rover, etc. allow you to perform tasks for other people and get paid. You can do it whenever you have time in your schedule.
    • Get a second job. When Brandon and I were saving for our RV, he worked a few nights per week as a bartender after working at his full-time job. He was able to save a ton during that time!

    Check out lots of more ideas on how to make an extra $1,000 per month.


    What to do after you pay off your debt

    Up until now, we’ve been talking about how to pay off credit card debt. But what happens when you’ve paid it all off?

    I’d love to tell you that you’re home free, but that’s not necessarily the case. Many people pay off their credit card debt, only to get themselves right back in it. And on top of that, there’s some bad advice out there about credit cards, so I want to set the records straight.



    If you follow Dave Ramsey, he’s going to tell you to cut up your credit cards and close your accounts. He’ll try to convince you that’s the only way to be financially free.

    He’s wrong.

    We’ll talk more about how (and why) you can use credit cards responsibly, but right now, I’m just going to tell you to keep the accounts open.

    Your credit score is based on a handful of factors, including your credit utilization and your age of credit. By closing your credit accounts, you’re getting rid of your available credit (aka screwing up your credit utilization). You’re also destroying your age of credit.

    Both of these things can lower your credit score. And if you ever plan to get a loan, a credit card, an apartment, etc., you’ll need your credit score.

    It’s easy for Dave Ramsey to tell you that you don’t need a credit score because you should buy everything in cash. Dave Ramsey is rich and can buy everything in cash. If you’re not likewise rich, this is bad advice.



    There are many reasons people get into credit card debt. Maybe a financial emergency popped up, like unforeseen car repairs or medical bills. Or maybe you have a problem with impulse spending or emotional shopping.

    In my case, it was a couple of factors. I had just gotten divorced, and my ex-husband got basically all the money and stuff. He also made more money than I did. I had to charge a lot on credit cards to get a new apartment and buy new stuff.

    But I also struggled with emotional spending. While we were still married, I would shop to avoid being at home. And after the divorce, I would shop to distract myself from the anxiety I was feeling.

    Now, it’s unlikely I will find myself in that situation again. My current marriage is pretty freaking awesome. But now I know I need to be more prepared for financial emergencies, so I keep a large emergency fund.

    The emotional shopping was a little different. I couldn’t just pay off the debt and ignore the problem. Otherwise, it would have kept happening over and over again.

    Instead, I had to find a way to deal with my emotions other than shopping.

    Really try to get to the core of why you got into credit card debt. Once you know that, you can put safety nets in place to make sure it doesn’t happen again.

    Read More: How to Reduce Impulse Buying Once and For All



    I think credit cards are awesome for so many reasons. First, I love that using a credit card builds my credit score. And having a good credit score allows me to get better deals on loans.

    I also love credit card rewards. My husband and I use both cashback and travel rewards cards. We have a strategy behind how we use them, and we love getting a little free money in our bank account or saving money on travel.

    Finally, I love the perks that come with credit cards. They include:

    • Fraud protection. If someone uses your credit card, you can dispute the charge, and your credit card company won’t make you pay it. This also works if you genuinely buy something but then the seller doesn’t deliver on a promise.
    • Free credit monitoring. Credit card companies keep you up-to-date on your credit score and let you know if anything new was added to your credit report.
    • Random discounts. Depending on what credit card you use, there’s a chance the company may partner with other companies to get you discounts on random stuff.



    You know that you should use credit cards responsibly, but you’re probably wondering what that actually looks like.

    1. Only spend money you already have. People tend to get into a cycle where they put everything on a credit and then pay it off the following month. The problem is that they’re usually using next month’s income to pay this month’s bills. Instead, only spend money that’s actually in your checking account already.
    2. Stay below 30% of your credit limit. Your credit utilization is a big part of determining your credit score. If you use more than 30% of your credit limit, it’ll negatively impact your score.
    3. Pay your balance in full every month. Never carry a balance over. There are myths out there that it only boosts your credit score if you carry a balance. This is incorrect.


    Final Thoughts

    When you’re stuck in credit card debt, it feels like you’ll never get out. But I promise you, that’s not true. Using the tips in this post, you can start making major progress on paying off your credit card debt.