How You Can Use Your Credit Cards Properly

Many people are experiencing difficulties in managing their credit cards these days. While it is true that credit cards do offer a certain level of assistance financially, many have mismanaged their credit accounts and have compiled somewhat insurmountable bills and arrears. These people get trapped in the quagmire of mounting debt that recovering from this malady seems to be a daunting if not impossible task.

With enough determination and hard work, things can get better by getting their debt back to manageable levels, and they can start turning a new leaf in their lives and use their cards properly so as to spend less.

How to use your credit cards properly

Know your billswoman happily using laptop

If you experience problems with the payment of your credit card bills, the first thing to do is to stop and look at all your bills. Take time to mull about your payables, evaluate the interest rates being charged to you and the monthly payments you have to make. Then, make a decisive effort to discontinue using your credit card for the time being.

Balancing budget

The next step is to balance your budget. Sit down and figure out the gross income that you earn monthly. Then compute the total expenses you incur each month. If you find out that your expenses are higher than your income, then you should either trim down or cut back on your expenses or try to augment your monthly income by perhaps getting a second job or getting into part time business.

Do not spend on non-essentials

Avoid spending on the non-essentials for the meantime. This includes refraining from eating out especially in fancy restaurants, preceding with gym and club memberships, doing away with cable television, and even buying your morning coffee from classy coffee shops. With the money you effectively save from these unnecessary expenses, you can already update the payment of your credit cards one at a time.

credit cards in pocketYou can pay your bills from a few months to a couple of years depending on the total amount of your debts and the amount of resource that you can muster to pay those debts. The stronger your determination, the quicker you can level out your financial position. Once you have zeroed out on your outstanding balance, then you can start over with your cards, only this time taking more responsibility for managing your accounts.

You can now enjoy various purchase rewards and rebates, free or discounted travel opportunities, and cash back options with your renewed use of your cards. Just make sure that you use your cards prudently and avoid haphazard purchases that could lead you back to troublesome indebtedness, and you can continue enjoying your credit activities.

Steps to Become Financially Independent

To become financially independent, you need to make primary goals in your life. These are common objectives for many people since almost everyone wants to be able to make a living without having to go to a job. In today’s tumultuous financial world, this has become an even bigger issue as job security is lower than it used to be.

Steps to gain financial independence

1. Start with avision

Not trying to get philosophical with you, but you needs to have a vision of your life when you are financially independent. By creating the vision of your ideal life will help when you are trying to save money for retirement. Of course, financial independence does not have to wait until you are 60 years old. Take the time to imagine how different your life would be if you did not owe any money on your home, car or credit cards. How much money could you save every month?piggy bank on table

2. Take action

The vision part is essential, but taking action is the most important step. The action is deciding to save a little more each month and spend a little less. Unfortunately today too many people do the exact opposite. Instead, they spend more each month by increasing their credit card debt.

What I always find amazing is seeing people charge their dinner on a credit card, but then never pay off the credit card. Are they still enjoying their dinner two or three months later? Of course not, so why do people live this way? Simple, they never developed a vision of gaining control of their finances.

Taking action is saving money. The goal should be to save the maximum amount in both of those accounts each year. The other part is to balance paying off your debt along with saving for retirement. Only paying off debt or saving money will not allow you to gain financial independence.

3. Live the dreamman shadow steps on bar graph

Gaining financial independence is about living the dream. The “dream” is whatever you make it. I cannot tell you what will make you happy. Everyone’s dream is different, but I do know not owing any money needs to be part of your dream.

Part of living the dream is having peace of mind without money worries. True financial independence is when you can live off the interest your money earns each year.

4. Incorporate the help of your family

Becoming financially independent is a life changing process and so will require a good deal of effort. Therefore, it’s essential that you enlist the support and understanding of your family, this can show itself in a variety of ways; just make sure that you have it when you need it.

5. Control your expenses

To create an income stream that will allow you to live without a day job you need to control your expenses. The less you spend, the less you need to sustain yourself and the more you have for the all too important step.

Take some time today to create a vision of financial independence for your life.