How To Use Credit Wisely And Achieve An Abundant Life Part 4

So, you think you know all there is to know about abundant living and credit card use? Think again. You have a few more steps to go to get on that path to that prosperous life you want. The fourth article in this series gives you some last tips and tricks to help you use credit wisely. Yep, we're not done yet, baby!

We talked about paring down your number of credit cards last time and transferring your balances to lower interest rate cards if possible. Now here's your plan of attack for the credit cards you still have--Prioritize your cards so you pay off the highest interest rate and lowest balance one first, then the one with the next highest interest rate and lowest balance, and so on. (Of course continue to make the minimum payments on the others while you are focused on paying off one card or you'll be drowning in penalties and fees!) Once you've paid off the highest interest/lowest balance card, apply THE SAME AMOUNT that you were allocating to pay off THAT card to the NEXT card in line—You won't miss the money since you were paying it to the other card first! (Read this paragraph again, hon--It's really the bright, bright bulb you need in your mind's chandelirer!)

A vital note: Many people make the mistake of rewarding themselves financially for paying off one card and then reducing the amount that goes to their credit cards when the highest interest one is paid off. Don't be a fool--Keep allocating the same amount--or more--and you'll make the biggest dent in your debt . And don't you DARE buy yourself a big gift when you pay off one card! Big Sister Barnsley is watching you, dear. Keep on truckin'.

Fourth, make it a game to see how fast you can pay down ALL your credit card debt . For example, discover how much you can save by cutting down on your ongoing expenses such as your cable, internet, cell phone service, and memberships (any kind of membership!). One client of mine just cut down to the basic cable plan, and now applies that extra $40 of savings to her highest credit card ABOVE what she was paying before. She's making great headway in paying her highest interest rate card down, and she doesn't even miss the channels! (She's tuned to the "Get Out of Debt and Be Free" channel, the best one out there!) Honestly, do you need 2,000 channels when you only watch 10?

That's another thing. Be honest with yourself. Don't lie to yourself about money and purchases. It doesn't do anyone any good. Do you REALLY need those extra channels? Do you need to get that mocha-frappe-whippity thing every day on your way to work? Collect the money you save from those unnecessary expenditures in a jar and watch the funds pile up. Then apply that to another credit card bill--above and beyond the amount you are currently paying.

Also, try to cut out your overspending across the board and find a cheaper way to get your needs met whenever possible. For example, do you go out to a movie once a week? Does it cost you about $20 to $50 a week depending on the size of your family? I thought so. Rent movies for a buck with Red Box or get a $7.99 monthly membership to Netflix so you can watch unlimited movies on your tv. Does your child have a movie you must rent and watch religiously? Find it and buy it. (LittleTimmy will be overjoyed and you can get some R & R while his eyes are glued to the tv set.) Cutting expenses is easy to do once you get the hang of it. Hey, it can even be fun, and just think of all the pleasure you'll have when you are free of credit card debt !

Finally, remember to give yourself low-cost or free rewards along the way—a day at the swimming pool, a hike in the woods, a cup of hot cocoa with a splash of Bailey's, or other things you love that won't break your financial back. Yes, there are plenty of things you love to experience that don't cost a dime. Be sure to do and enjoy those things INTENTIONALLY and FREQUENTLY to support yourself in crawling out of your debt hole. Remember, your goal is not only to get OUT of debt but also to establish a lifestyle full of experiences you love that won't get you into debt in the first place! Money may be your rope, but those little things, like spending time with friends, are the grappling hooks and anchors of your life.

So now, let's take a look at the new financially savvy "future you" once you've read and implemented the info in all four articles in this series. Drumroll please! You're making carefully planned purchases for which you have already saved the funds. You're being extra-mindful about your spending. You've frozen your credit cards--literally! You've paid off your highest rate and lowest balance card first and then attacked the next in line, and so on. You now know that though you did incur credit card debt before, there's a lot you can do about it. And you use credit wisely to pay for something ONLY when you know you have the funds to pay off the purchase BEFORE it begins accruing interest (i.e. when the bill comes due for that new purchase, you pay it off then--IN FULL--rather than making a minimum or partial payment). You know to save up the amount you need for the purchase in your savings account (and you keep your hands OFF it, mind you!) so those funds are ready when the credit card bill comes due.

Credit is a convenience that can become a costly burden if you don't use it well. But when you master how to use credit wisely, you will be in control of your spending and on the way to an abundant life. Your money saving strategies and credit card use will enhance your financial prosperity , not destroy it. I wish you the best of luck. You can do it. I believe in you and your ability to make wise, financially smart choices.