How to Use Your Credit Card

That magical piece of plastic.  Once you get your first one, you are rich!!! You can go to the store and buy almost anything that you want.  Here is the big problem, you still have to pay for it.

Credit cards are like modern day slavery.  I know, that is a harsh word to use, but let’s take a look at this. The idea behind the credit card is to tempt you to buy something with money that you do not have, and then charge you for using the credit card.  Now that you have an extra bill to pay, chances are that you will not have money for something else, so you charge it.  You become a slave to the credit provider, constantly sending your hard earned cash to them, but getting less and less back from your purchases.

Here is a little bit of advice from my Grandpa.  If you cannot afford to pay for it today, don’t buy it.  We live in a society that demands that we spend money.  I once heard that the average American gets 37,000 advertisement impressions per day. You need to resist this urge to splurge.

Save enough money to purchase the item in cash.  Use your credit card for the purchase and then go online to your bank and pay it off.  You will avoid the extra charges from your credit card company for using their money to by your toy.  Another plus, this will help raise your credit score.

It is OK to use a credit card, just make sure that you can pay it off right away. If you cannot pay it off today, the toy can wait.

Save on Meals

We all love to go out to eat while on vacation.  Here in America, it is not uncommon for a meal served at a restaurant to exceed more than half the recommended calories for an adult.  Here is a way to eat out for half the price, half the calories, and still not feel deprived.  As soon as each course of the meal comes, ask for a take home box.  Most hotel rooms now have a refrigerator and a microwave.  By taking half off your plate, you will not be tempted to eat it. You are also cutting your dining bill for tonight and tomorrow night in half, yet still eating restaurant food each night.  Best of all, you will not ruin your night by being stuffed.

Here is another idea. Most American homes have a microwave and a fridge in each home.  Get the hint?

Who Needs to See it in the Theater?

Let me tell you about a place to go see movies where candy is $1 per person.  The movie (for the whole family) is $1.28 with tax.  The bathrooms are a lot cleaner (usually). Oh, and you do not need to pack everybody into the car. 

Take a look at Red Box. You can rent a movie online and then go to the store to pick it up.  While you are there, take a look at the Kroger $1.00 bags of candy.  If you do not want to step out, try Google Play.  I rent movies to my Android device for anywhere from $.99 to $4.99.  Yes, I watched a classic Disney flick the other night in my hotel room.  Much cheaper entertainment then hitting the theater. If you are watching from home, you do not need to go into a disgusting public restroom either.  I only had to wait about 30 seconds before starting the movie. Oh, and they pause the movie if you need to go to the fridge or the little boys room.

I stood in line on Black Friday at 5 am to get the 60 inch plasma TV that I had been waiting for for 8 years to come down in price.  Got a huge discount on it. $8000 off for waiting 8 years + another $800 Clack Friday special.  Now, we watch our movies from home on big cushy leather couches.  So what if I have to wait 3 months before they can be rented.  It’s worth it!

Save a Little on the Road

As we enter the peak of the summer driving season, here is a little tip from our house hold to help save you some dough.  No, it is not the latest fad in fuel savings gimmicks.  Pack your lunch.

Take a cooler and pack lunch for the family.  Just lunch, no snacks. That would lead to some unhealthy munching.  What is the price for a family of 5 to eat lunch at FatDonalds?  I mean besides the cost of diabetes and heart attacks.  What ever the cost, you can pack a good, healthy, and satisfying lunch for your family that will be cheaper than handing cash over to the clown. 

Hear is another option for those of you who rent places with a kitchen.  We will make things like taco meat and all the sides.  We may even make a big serving of pot roast.  We freeze it the night before and pack it in a cooler with with ice.  After traveling all day, it is still rock solid frozen.  No need to go pay the big bucks for dinner every night.

Yes, go out to eat every once and a while.  You are on vacation.  Just remember that your urge to go out dinning will go away once your belly is fully of home cooking.

Save a Little at the Grocery Store

Here is a neat exercise.  Write down what you are getting from the grocery store before you go, then take a look at what you purchased.  A grocery store is a business.  They need to sell you things.  They will sell you anything they can convince you to buy.  Where is the milk at?  On the other side of the store from the front door.  You have to walk past and look at a lot of products before you get there. 

The grocery store is trying to get you to do a spontaneous purchase.  Here are a few tips to save you some cash.

• Know why you are going to the grocery store and focus on just those items.
• Get in and out as fast as you can.
• While you are moving through the store, use the “safe aisles.” These are the aisles that have light bulbs, toilet bowl cleaner, paper plates and dog food.  Very little temptation there.
• If you bring the kids, let them know that you will not buy anything they pick up, beg for, or otherwise hint at.  Get in and get out before your kids get targeted by advertisers.  Your children are an income stream for the store as well. It will take a few visits for them to adjust, but they will get used to it.
• Coupons!  Use them.  When I was growing up, I was told coupons were for poor people.  Hey, if they make your everyday products cheaper, use them.  We only use coupons for items that we were going to buy anyway.

Be vigilant and watch your grocery expenses drop.

Pay Ahead

A little more than 10 years ago, I was recalled to Active duty in the US Navy after the attacks of September 11th.  I used that opportunity when I would not have any rent or utility bills to pay off a lot of debt.  Upon my return, I hatched a plan to make sure that I never financially struggle again.

Once I returned home and started getting utility bills again, I decided to pay ahead on them.  I took a looked at each of my bills (from my previous apartment) and determined what my average for each bill was over the course of 12 months.  I then set a month automatic payment to each utility at that amount plus $5.00 so the payment would arrive a week early.  This ensured that I would make my payment and never be hit be a late fee.

For seasonally changing bills, you will need to check each month to make sure you sent enough to cover the bill.  For example, when I did this, we were heading into winter.  I would have to sometimes pay $50 extra dollars to cover my electric bill each month.  Once summer came around, I did not have to do that.  Make sure you check your bills every month for a minimum of 18 months.  At that point you should be far enough ahead that you will be safe.

One of those bills should be your “Focus Utility". This one you will pay $10 a month above your average to get ahead faster.  You also need to decide how far ahead you want to be.  It is a good idea to have 6 months of cash reserves on hand.  Personally I have most of my bills 24 months ahead.  That means if I have a financial disruption, I can go 24 months without my power, water, or other utilities turned off. 

Once you get ahead at the level that you want (Say 12 months) on a bill, reduce your over pay from $5 to $2.  This will help to cover cost increases due to inflation.  Take that extra $3 and add it to your “Focus Bill”.  Remember at the end of each year to review your bills for the last 12 months.  Average the Charges (Not the amount owed) and adjust your automatic payments accordingly.

This is a long term process.  I said that I am almost 24 months ahead.  It has been 10 years since I started.  This process provides minimal disruption to your finances, but once in place it will be there if you need it. 

I was once told “I can’t do that.  I have to have money in the bank to do that.”  That is the point of doing this.  So you will have to have money in the bank.  You have to make a change somewhere.  For many, this means paying an additional $35 to $45 a month.  You can find ways to do it if you are willing to look.

Summary:

• Set up online banking.
• Determine the 12 month average for each bill.
• Set up an automatic payment for each bill so they will be paid a week early.
• Set each bill to pay its average plus $5.
• Focus on one bill by overpaying by $10.
• Determine how many months ahead you want to be.
• Once you are ahead, reduce the monthly overpay to $2.  Add $3 to your “Focus Bill”
• Check your bills for the 1st 18 months and do an extra online payment to cover seasonal highs.

Store Brand vs. Brand Name

I was raised on brand named foods.  Store brand.  That was not for us.  Well, thank God I married the woman that I did.  She showed me the light.  With store brand items, you get two big advantages.  1st off, they cost less.  2nd, they are more likely to have discounts if you have the stores frequent customer card.  double savings!!!

A relative of mine refuses to try store brand.  “It taste different” is their response.  OK, in some cases that may be true.  If so, it may taste better.  After a short period of time, you may even realize that store brand taste much better.  Trust me, it does.

Save your money.  Get the free frequent customer card from your local grocery store and take a look at all the store brand items next to your usual brand name items.  Try them out. Both you, and your wallet, may be pleasantly surprised.