From the time I was in high school, my father emphasized the importance of paying off credit cards each month. As a consequence, I have very rarely carried a credit card balance – only in my student days, and only for a minimal length of time.
But as I’ve mentioned previously, I love using my credit cards because of the points and miles I accumulate. The problem we kept running into, though, and which I suspect is a common one, is that we would spend more than our monthly budget provided for. We would still be able to pay off the entire balance, but we were also spending more than we wanted to.
I finally hit upon a relatively easy solution. It’s incredibly simple to track your credit card balance online or via telephone. So I sat down with our Quicken budget and figured out how much discretionary spending we could afford each month. The number I arrived at included groceries and household items, which is our biggest discretionary expense, as well as monthly bills I pay with our credit card, such as our cell phone and landline bills. Every day, I check our balance online and make sure that we are staying within our budget. If we get close to the limit before the billing cycle ends, we pay closer attention to our spending and minimize non-essential purchases. This system helps us reach our financial goals that much faster.