You may not even remember what it was you bought or why you wanted it so bad.Ĭonsumer credit card debt is a huge problem, and you could get stuck paying high-interest payments if you’re unable to pay off the full credit card balance each month. Once that credit card bill comes, you’ll have that same head-spinning moment as you have when scrambling to finish a school project the next day. The moral tax gets blurred with credit cards…when you’re consuming, you’re not thinking about the payments, and when you’re paying, you don’t know what you’re paying for.
A 2011 study by MIT revealed that people are prone to spending 20% more for items using plastic as opposed to cash.Īs MIT Sloan School of Management professor and neuroeconomics specialist, Drazen Prelec teaches, credit cards disconnect the pleasure of consumption from the pain of purchase. Cash rules everythingĬredit cards might allow you to solve your problems with one swipe, but it can also swipe away all your money if you can’t control yourself. Once you have established those goals, such as buying your first car, crashing in your own apartment and so on, get your savings account going if you haven’t already. You give to causes that make sense, invest in something meaningful, save what you can for things that will last, and make your spending worthwhile. This helps you develop self-control and prioritize necessities. One way to organize your spending, according to financial educator and founder of The Zela Wela Way program, Nancy Phillips, is the Give, Invest, Save, Spend (GISS) method.
There are many apps available that can help you manage your money and identify where you’re spending the most money. Having a budget app helps you with money management when on the go.
This allows you to manage your cash flow responsibly. Write down all the sources of income you make, excluding any allowances or money you receive from your parents, then write down your expenses. As with anything in life, having a plan is a great place to start.
0 kommentar(er)
