Just Say No to Things You Can't Afford

One of the most powerful tools in your arsenal is your ability to say no to things you can't afford.  If you don't, you may be paying for those things for years and years.

Why should you pay for short term experiences and products over the long term?  When you do, you just build up a wave of debt that follows you through life.    Then, if something slows your boat, that following wave of debt may catch up with you and swamp your boat.

It all sounds easy.  But, in real life, it's tough to say, "No."  Nobody wants to live some monastic life.  It's more of a matter of reigning it in.  Substituting something cheap for something expensive.  Finding a free pastime instead of an expensive one.  The hope is that when you do spend money you spend it on something good:  an investment in yourself or your family or a truly unforgettable life experience.

Managing Credit Cards - Budgeting Your Credit

If you have credit card debt, it can be hard to scrounge up the money you need for an emergency fund.  Financial advisors want you to have enough cash in savings to cover three to six months of expenses.  I want that too.  We all want that kind of financial reserve.  But, in the real world, we all have bills to pay.

One thing that is helpful is to dedicate your credit cards to specified emergency expenses only.  For example, you could pledge to only use your Sears card for car repairs and tires.  Your Visa could be reserved for veterinary bills only.  Then, as you pay down your balances, more and more credit becomes available for emergency use only.

Once you've paid a card way down, you can shift money into savings for that fabled cash reserve.  But, by pledging that your card will only be used for a few purchases, you'll avoid running it up unnecessarily.