Money is a resource we use to exercise our preferences in the marketplace. We make decisions about where and on what we spend money based upon that which we personally value. When there’s an added incentive that appeals to us, we are more likely to shop at a particular store or buy a particular item. It’s important to be aware of the kinds of things that make us more willing to part with our hard-earned dollars. Knowing what we consider “worth” buying and why helps us to make better-informed buying decisions in the long run.

What factors influence our spending?

Certainly we each have preferences as to how we want to spend our money. In some cases, we may be willing to spend a bit more to get something we perceive as “better.” When we spend our money on items we hold in higher regard, we tend to feel more satisfied with the purchase and more justified in going to the expense.

Some of those incentives that may influence purchasing decisions include:

  • Organic – Choosing something that’s been grown without synthetic fertilizers or pesticides may make us feel that we’re making healthier choices.
  • Natural – If “getting back to basics” is important, purchasing items that are made more simply and are less processed can make us feel we are living more naturally.
  • Recycled – Those concerned about environmental issues may prefer to purchase items that have been repurposed in order to lessen their impact on resources.
  • Fair trade – Some people may prefer to purchase products they know were produced with ethical standards in an effort to uplift the living conditions of those who made them.
  • Made in U.S.A. – Some people’s buying decisions are greatly influenced by products that are made utilizing American labor and which create jobs in the U.S.
  • Locally grown – As pertains to produce, many believe you can’t get fresher in-season foods than that which is grown locally.
  • Locally sold – Buying from local merchants rather than big-box stores on online supports the local economy and keeps tax dollars in the community.
  • Responsibly sourced – Being assured that products they buy come from sources that are not being detrimentally depleted (like fish, seafood and wood products to name a few) is an compelling incentive to some people.
  • Cruelty-free – Buying products that are not tested on animals, which they consider a cruel practice, is of utmost important to some consumers.
  • Company reputation – Outstanding treatment of employees, service to the community or charitable works are the types of actions a company can undertake to gain a favorable reputation with customers, encouraging them buy there.
  • Benefit to a cause – We may be more likely to buy an item knowing that a percentage of the price we pay will be donated to a worthy cause.
  • Luxury – There’s no shame in paying more for a luxury item if you believe that it is superior to other items and worth a higher price tag.

Each of these factors may serve as an incentive to buy certain products or from certain companies. No incentive is any better than any other – they are simply choices that may or may not speak to you. When we feel that our dollars are doing more in the “big picture” than simply fulfilling a desire, our money’s spending power is increased – at least in our own minds. The bottom line is, spend where and on what you believe is best – that’s how to get the most enjoyment and empowerment from your resource that is money.

What types of incentives compel you to open your wallet?

One of the best things you can do for your finances is to look ahead, and make plans for the coming months. Being able to look ahead and prepare for expenses, as well as being ready for upcoming expenses, can provide you with the ability to avoid serious financial problems. When you are able to prepare ahead of time, you have a better chance of being taken by surprise.

If you want to prepare for the rest of the year, one of the things you can do now is prepare for tax time. It seems like tax time is a long way off, but the reality is that we are already in August. The end of the year will be here before you know it. Whether you are getting ready to pay quarterly taxes, or whether you just want to make sure you get all the deductions and credits you are eligible for, it makes sense to look ahead now, so you aren’t scrambling come January.

Organize Your Paperwork

Now is a great time to organize your tax paperwork if you haven’t been keeping it organized already. Make it a point to look at where you stand. Do you have your receipts organized? Have you been keeping good records? Set up a file for tax information, and then keep it organized the rest of the year. This reduces stress come tax time — for you and your accountant.

Consider Your Possible Tax Deductions

Look ahead. Are there tax deductions you are eligible for? If so, you can start doing what’s necessary to qualify for them. If you aren’t contributing what you can to your retirement account, consider boosting your contributions. Give to charity. It’s much easier to give $100 a month from now to the end of the year than to quickly come up with $400 or $500 all at once. You can also look at your investment portfolio. If it’s time to rebalance, you can sell losers to harvest the losses on your taxes.

If you have a business, or are planning on making some other expense, pay attention. You can get a business deduction, or even deduct the cost of a move. Look ahead, and plan your spending so that you get the maximum tax benefit.

Are there Credits You Can Take?

You can also look for credits. Whether it’s for sending your child to day care, or whether you are putting in a solar panel power system, you might be able to claim a tax credit. Learn about what you need to do to be eligible so that you can follow the proper steps. It’s much better to be ahead of the game, and make sure you are doing everything right ahead of time. You can also use this as a time to save up for later.

Looking ahead gives you time to prepare and plan your finances so that it’s not a big problem later. Take a few minutes to look ahead toward the end of the year, and make adjustments that can help you.

Tips for Buying Used Items

by Jessica Sommerfield · 0 comments

I’m someone who is always looking for a bargain. Whether the clearance racks I make a b-line for at department stores, or the 25% off codes I wade through my junk email for, I’m keen on getting the most for my money. This also applies to buying new versus used. If I can get it cheaper without sacrificing quality, I’ll buy it used in a heartbeat. Of course, there are times I still can’t resist a new item or full-priced item, but I know why I’m buying it. In most cases, there just isn’t any way to get it cheaper (I’m risking availability if I wait for it to go on clearance), or I’ve weighed the differences in buying it used and don’t find a savings. It can often be tricky to determine when to purchase an item new, and when to buy used. Here are a few tips from the experts (and myself) to help you decide, and get the most for your money.

Things It Usually Pays to Buy Used
Cars are one of the top items you should always try to buy used. Dealerships will try to lure you into a new vehicle purchase with deals of 0% financing or discounts, but be mindful of the rapid depreciation of new-off-the-lot purchases. On the other hand, you don’t have to buy a clunker to practice frugality. Look for a 1-3 year old vehicle with low mileage and good ownership history that is also priced competitively.  Then finance through your bank for the best possible interest rate. I did this a few years back, and am still loving my used but nearly-paid-off vehicle I plan to drive for several more years.

Furniture is very expensive to buy new, but you’ll find huge savings on used. Check craigslist.org, your local newspaper, an online swap group based in your area, and yard sales. High-quality furniture will last a long time,  and can be easily restored or re-finished to give it a new look or repair any surface wear.  Another place to look for great deals is an estate sale.  Often you’ll discover beautiful furniture ridiculously cheap because the owners are in a hurry to liquidate their belongings and aren’t as concerned with getting top dollar.

Exercise equipment is notoriously an expensive impulse buy that ends up in the next yard sale after your latest fitness goals lose steam or take a new direction.  When you buy these items used, you can afford to change your mind without regretting how much you spent on something that doesn’t get its money’s worth in use.  Just make sure the used equipment is safe and all the major functions are operating.

Electronics is a tricky category that requires a lot of homework and comparison. I don’t recommend buying used electronics on a whim; just because an item is used doesn’t necessarily mean it’s a better deal, and this applies most strongly to electronics. Because technology is constantly changing, buying an electronic that is too old, no matter what condition it’s in, could mean its compatibility and usability will be limited.  However, there is some wisdom to buying gently-used, newer generation refurbished items. Because electronics companies constantly introduce products that exhibit few significant changes to their basic function,  refurbished or last-season tablets or iphones represent a significant discount without sacrificing performance. Many refurbished dealers offer limited one-year warranties, a well.

Buying used isn’t just something people do if they can’t afford to buy new. It’s a practice that allows you to enjoy the maximum savings on good-as-new items so you will have more money to spend on the things you can’t buy used.  I’m a firm believer in this practice, and continue to shop for used-item bargains in my daily life. If you keep your eyes open for a deal, you never know what treasure you’ll find!

Carrying balances on multiple credit cards is common for many people. Credit is not cheap money and, as often becomes the case, interest on those balances quickly escalate your debt to an overwhelming amount. When you realize that your credit card debt is causing a financial hardship; or you just want to get a handle on the amount you owe, it’s time to look at ways to pay down – and hopefully pay off – those expensive credit accounts.

Advantages to paying down credit card debt

  • Less overall debt. It’s wise to live within your means as much as possible, which means, if you can’t afford it now, don’t buy it until you can.
  • More expendable income. Wasting your hard-earned money on outrageous interest charges does nothing to enhance your economic strength or standard of living.
  • Lower credit card bills. Having less credit card debt to pay means you’ll have more of your income available to you.
  • Higher credit score. This advantage may be less obvious than the previous ones, but it’s very important. Paying down debt lowers your “debt utilization” (the amount you owe compared to the amount of credit you have available) which is reflected favorably in your credit score.

Many people, unfortunately, live under the assumption that credit card debt is a fact of life. While there’s nothing intrinsically wrong with credit, it’s all too easy to let balances get out of hand and find yourself paying far too much of your income repaying expensive money. Coming to the realization that it’s time lower your credit card debt can be an empowering step toward taking charge of your financial resources.

Ways to pay down credit card debt

There’s no “one” way or “right” way to pay down (or pay off) credit card accounts. First, take a good look at your current credit situation to assess the degree of your debt and its impact on your finances. Then make a plan that will allow you to see progress that will inspire you to stay the course until you reach your goals.

As you begin the process, it may be worth your while to contact each credit card company and inquire about a lower interest rate. If you’re able to procure one, you’ll be saving on interest charges right off the bat.

Next, identify strategies that will motivate you, personally, to really take a bite out of your credit card debt.

Would you prefer to:

  • Tackle a card with a big balance first?
  • Whittle down an account with a particularly high interest rate?
  • Experience the satisfaction of paying off a lower balance in full?
  • Pay considerably more than the minimum due on all your accounts?

Where will you get the money to pay down your credit accounts?

Whatever tactic you employ to choose what accounts to focus on, you’ll need to devote some money to your plan. Consider these sources for that money:

  • Existing expendable income – Determine how much of your current income you could you devote to paying down debt? Are there areas where you could economize to free up more?
  • Savings – Applying savings to your debt will help you free up more money to save in the long run.
  • Low-interest loan or balance transfer – Consolidate high-interest debt into a lower-rate loan. Once your credit cards are balance-free, vow to use them more judiciously.

Your credit card bills don’t have to rule your budget! Credit card debt can be whittled down and eliminated with a commitment and a plan of action. Living without the burden of high credit card bills is a financially empowering way of life.

Reading the news, one topic that immediately appears to have potential impact on consumers who travel frequently is the recent  increase in new airline businesses. This would seem to indicate that the industry as a whole is doing well, and that’s certainly true. Many major airlines are finally posting profits after a chain of bankruptcies and mergers in recent years. The financial upswing of established airlines has provided incentive for eager entrepreneurs to get in on some of the potential profit. Obviously, more airlines in business means more competition, which is always a healthy development for an industry that tends to be monopolized. Here are a few of the direct benefits you might see if you’re a frequent flyer.

Better Service from Major Airlines
According to the American Customer Service Satisfaction Index (ACSI), airlines still ranked embarrassingly low this year, with a score of 69 out of 100 possible points. That places them just above cable providers, the IRS, and social media services! The airline industry’s financial woes have no doubt affected the level of service they offer, while the relatively small number of airlines (especially after the mergers) leaves little incentive for improvements in customer service, efficiency, and the amenities that travels expect when they pay as much as they do. In the United States, four major airlines currently provide over 80% of the nation’s flights.  With fledgling airlines launching themselves into this challenging market, larger airlines may feel the heat of competition, particularly in areas where multiple airlines provide comparable flights and service.

Cheaper Flights
One of the recent startups, People Express based in Newark, is offering flights as cheap as $56 for one-way travel to a handful of U.S. cities! Those who travel know this is a very competitive price, but does discount pricing from area start-ups mean discounts across the board? Not necessarily, but it might. One of the problems is that established airlines have already saturated a majority of the best or most popular routes and city bases. If new airlines aren’t able to get into these areas, they won’t be able to force much competition in pricing. On the other hand, if travelers begin to choose their departure and destination points based on the affordability of airfare, bigger airlines may experience a migration of customers that will affect their bottom line and spur more competitive pricing and package deals.

Service in New (Or Abandoned) Locations
Flights from Newark haven’t been offered since the AirTran route was discontinued after the Southwest Airlines merger in 2012. The launch of People Express, as a simple example, will provide flights in an area that isn’t saturated by other airlines. This benefits consumers who have had to spend more on transportation (and potentially airfare) to fly in or out of other locations in the last few years. This company’s business model is to cater to this market, and if other start-ups are smart, they will follow. Even if new airlines can’t compete with their giant counterparts, they can generate new customer bases in areas that need their services, and both will benefit.

Starting up a new airline isn’t easy, however. The combination of enormous expenses (including fuel), the lengthy process of earning certifications, catering to government regulations rigorous inspections, and the difficulty in generating the capital needed just to start are just a few of the obstacles. If the preliminary success of many new airlines in the U.S.  and around the world is any indication, even these issues aren’t enough to stop entrepreneurs willing to make the effort, and travelers should begin to reap the benefits.

And don’t forget about the travel coupons we’ve gathered too. You just might catch the deal of the year!

Children learn their first life lessons in the family. Among those lessons should be those that deal with personal finance. Money is an intrinsic part of life and, as such, can be taught in a very contextual way within the day-to-day activities and realities of family life. As a resource, it must be managed and as a tool, its proper use must be practiced.

Teaching children about money

The first step to teaching children about money is providing them the basic facts.

What is money?
Teach children early on that money is something we trade for items and experiences. They should learn at as young an age as possible that many things we have and do in life cost money. Reference things they know well to illustrate the point: A new bicycle or set of markers costs money, as does going to a movie and a trip to the ice cream shop.

How do we get money?
Children don’t think about where money comes from; they just know it “exists.” Explaining that we receive a certain amount of money for doing work and sometimes as a gift is an important way to help them understand its source.

What are the value of things in relation to money?
This is really the first step to helping children understand money as a resource that needs to be distributed mindfully in order to have the things we need and some of the things we want. Talk frankly with children about the cost of things to help them understand upon what the family money is spent. It’s perfectly acceptable to tell children that certain expenditures are more than the family can afford or are something for which we need to save.

Lessons children can learn about money with prudent guidance

Once they possess the basic concepts, children can be taught to handle some money of their own. Paying them an allowance for doing chores is a logical way to help children experience the correlation between work and money. With some guidance from you, this process can help them learn some vital personal finance lessons, including:

  • First-hand experience with the challenges of spending and saving – Handling money presents an ideal math-in-real-life scenario. Adding funds to their savings, calculating the difference in price between items they’d like to buy and subtracting money from their balance to determine how much remains provides children with actual experience in seeing how money comes and goes.
  • Prioritization/decision-making – When children are allowed to manage some money of their own, they will soon realize that it only goes so far. They’ll be faced with the very true realization that they can’t have everything they want and that they’ll have to make choices when determining how to spend their money.
  • Benefits of saving – Children who save learn they can accrue enough money for something that costs more than they have today. While delay of gratification is difficult to accept, it can be character-building as well as wealth-building. When children save toward a goal, they learn self-discipline and patience that will serve them well with their adult finances.
  • Responsibility – Teach children to be responsible with their money in every sense of the word. When they are carrying money, keep it in a safe place on their person. When paying for something, carefully count it out themselves. When storing it, keep it in a secure place where it won’t be lost or stolen.

Children who learn personal finance lessons from a young age start out with good habits and a strong command of money which will last throughout their life.

It’s been nine years since the last time I moved across the country. We were hoping to remain here for the long haul, but things haven’t worked out as expected, and now we are repeating, in reverse, our trek of nearly a decade ago. Since then, prices for moving have gone up. As we prepare to move, we are looking for ways to save money on our return to the East Coast. Here are some of the strategies we are employing:

Get Rid of Stuff

One of the best ways to reduce your costs is to reduce what you’re taking with you. We are getting rid of stuff by giving it away in some cases, but we are also looking for ways to get a monetary advantage. We are selling some of our items, getting a few hundred dollars to help with moving costs. Items that we aren’t selling or giving to family and friends who need it, we are donating to a local thrift shop. A goods donation can result in a tax deduction, so while we aren’t receiving direct compensation, we are still getting a benefit.

Because we are getting rid of stuff, we can also manage to live in a smaller, less expensive place. This is saving us money in terms of coming up with a deposit, as well as the cost of rent. It’s never fun to go through your belongings and get rid of things, but it’s often necessary if you want to save money on a major move. The less you bring, the less it will cost you.

Of course, as you determine the cost-effectiveness of this decision, you need to consider what you will need to buy on the other side. In our case, we are only bringing large items that are hard to replace. We have other items, though, that aren’t very difficult to replace. And, of course, some items we don’t plan on replacing at all. It makes sense to go through your items and be realistic. We have one item that is large, but wouldn’t cost much to replace. Indeed, the extra cost of having it on the truck makes it not worth the trouble of bringing with us.

Choose Your Level of DIY

The cheapest way to move is to get all of your belongings across the country is to get it so you can drive them yourself. If you can fit everything in your car, or in your car plus a small trailer to pull behind, that’s the least expensive way to go. However, many of us — especially if we have families — can’t make that work. As a result, it makes sense to look for other modes of transport.

Moving allows for different levels of DIY. You can rent a Uhaul and do most of the work. You can work with a company like PODS or UPack. You pack everything up, but someone else drives. This is the method we used last time we moved across the country. It was reasonably cost-effective, and reduced some of the stress that can come when you do something completely on your own.

Finally, you can get movers who will pack up the truck and drive. We will pack our own boxes (having someone pack your boxes for you can be quite expensive), but we might have the movers to pack up the truck, since we have some large and expensive pieces of furniture that we’re not sure we can manage. The key is to consider what you can afford, and what makes sense for your situation.

Move During Off Times

Your best prices are going to be when you move during “off” times. Moving at the end or beginning of the month will be costly. Moving in August (due to back to school) costs more as well. If possible, try to move during off times, since movers will be more willing to give you a better deal.

With a little planning and effort, it’s possible to save some money on your move. It’s still likely to cost more than you prefer, but you can reduce some costs.

Recent headlines have brought to light a new crisis in the bankruptcy troubles of the Motor City: thousands of homes are facing water service shut off. The city’s water and sewer department account for nearly 1/3 of the city’s debt, and the shut-offs are part of an effort to reconcile some of their financial troubles during the transition to privately-owned services. While this action drives many residents to fork out the money for their delinquent water bills, many others are still unable to pay their bills and simply go without this basic utility. In turn, human-rights organizations are stewing, because many of the shut-off homes include families with young children or elderly retirees who are at risk.

Thankfully, I’ve only had to let my bills go late a few times when we were going through a rough time financially. As someone who prides herself in being on time, above-board, and boasting an excellent credit score, that’s hard to do. But sometimes you simply don’t have any other options. With the understanding that these situations happen in spite of everything you may have done ‘right,’ there are ways you can handle them in order to survive and get yourself back on track with as little damage to your credit score as possible.

What to Pay If At All Possible
Some bills you can afford to let slide, but there are certain ones you should make a priority. These include your mortgage or rent, car payment, and utilities (if at risk of a shutoff). Basically, you should be most concerned about staying current on any bills tied to a physical asset such as a home or vehicle. Mortgage companies can start foreclosure proceedings on your home as early as one late payment. The further along you allow foreclosure proceedings, the more fees you’ll pay to reverse the process. Speaking with your lender as soon as you anticipate a problem is the best strategy, because they’ll be able to give you a number of options other than foreclosure or ruining your credit. If it looks like your financial situation will be long-term and you can no longer afford your house payment, consider putting it up for sale. Even if you take a loss, it could be a better financial decision than foreclosure or bankruptcy.

If you can’t pay your rent in full when it’s due, make a deal with your landlord right away. They may allow you to make a partial payment or use your security deposit. If you live in a complex, they might let you work off some of your payment by landscaping or cleaning.

Automobile lenders are notoriously unforgiving when it comes to late payments. Again, it’s best to dialogue with your lender as soon as you anticipate difficulty with your payment. In most cases, they’re willing to take some payment rather than no payment. Of course, another option is to sell your car if you can’t afford it or don’t really need it.

What You Can Afford to Let Slide
While they are certainly financial consequences in doing so, credit card bills, personal loans, student loans, and taxes fall into the category of payments you can usually afford to let slide the longest before you’ll suffer collections or major damage to your credit. Don’t take this for granted, though. Continue to dialogue with any lender you can’t afford to pay and negotiate whenever possible, but avoid the temptation to simply give in to the creditor that harasses you the most. Always do what’s best for your long-term finances.

Being behind on bills is never a desirable financial situation, but it happens. Knowing how to handle it in a way that is the least damaging to your daily needs and financial credibility is the key to surviving and thriving through these difficult times.

From the spare change you toss in a jar at the checkout or in a kettle at the holidays to a raffle ticket or box of cookies you purchase – opportunities to donate to worthy causes abound! Of course you want to feel generous by ‘sharing the wealth’ – but it might surprise you to discover how much money you actually give – a quarter or a dollar at a time. While donations are good for the soul, it’s as financially responsible to have a strategy for donations as it is for any other category of expenditure. Some ways to get a handle on the amount you donate to charity include:

1. Decide to which charities you wish to donate. Determine how you prefer to give: Would you rather spread it around a little here and a little there – or pick a handful of particularly meaningful charities to support to a more generous degree?

No matter to whom you donate, do some research to discover where the money they collect goes. A thoughtful donor makes certain that the charity she supports spends their donated funds responsibly. As a rule of thumb, go directly to the source rather than through administration levels that only serve to drain dollars from the charity itself.

2. Decide when to donate. Is there a time of year when your favorite charities experience greater need? Is there a time when your budget can support increased generosity? Regardless of when you donate, remember to keep receipts to which you can refer when filing your taxes, as charitable donations are tax-deductible.

3. Determine your donation budget:

  • Consult this handy Giving Calculator at Charity Navigator.org.
  • Determine your disposable income – While you want to make donating a priority, you should not put your financial well-being in jeopardy to do so. Cover your expenses and savings goals, then allocate what remains towards those things about which you are passionate, like the causes you champion.
  • Consider your passion for the cause – Decide how much of your disposable income you want to donate based upon how much the cause(s) means to you.

4. Make it happen. Once you determine the right level of giving for yourself, budget your donations as a regular expense in order to be assured you can afford to give as much as you want and track where and when you donated.

5. Stick to that budget (as much as possible). No matter how cute that puppy or how desperate the situation, try to stick to your plan when worthy causes come to your attention to avoid letting your emotions wreck havoc with your donation budget. A good strategy may be to allocate a portion of that budget for the times when your resolve is weak or you’re taken off guard. Resist buying every candy bar a parent brings into work to benefit their child’s school but an occasional purchase will help you avoid being labeled a “cheapskate” who never donates.

6. Find creative (non-monetary) ways to donate. Charities need more than money to do their good works. Investigate alternative ways to augment your support by donating your time and/or talents. They may also need items or supplies you can provide. If they hold fundraisers, perhaps you can make something they can sell to generate funds.

It’s admirable to share your financial resources with worthy causes. The important thing is to be mindful of who you’re helping and how much you actually give. When you pay careful attention, your donation dollars can have the biggest impact on causes without causing you a financial burden.

Do you know how much you donate to charity?

I’ve been thinking a lot lately about life without credit. When you get to a certain point in life, it seems as though you don’t need to worry about credit anymore. If you aren’t carrying credit card balances, and you prefer a debt-free lifestyle (except your mortgage, of course), it doesn’t make a lot of sense to worry about your credit. But what if you need credit to get by?

What Happens When You Need Credit?

I’m getting ready to move, and one of the first things I did was secure an apartment in the new location. However, before I could get the apartment, I needed to go through a credit check. In fact, there was quite the credit application associated with the apartment. It’s in an area I want to live in, and the apartment community is my first choice, so it makes sense that I might have to jump through a few more hoops.

It’s not my favorite approach to the situation, but it’s what needs to be done. So, even though credit hasn’t been a big concern for me in the last seven years or so, the reality is that I’m glad I have good credit, because I might have had to settle for a different apartment, in a different community. If you wind up needing credit for something at some point, it’s nice to be ready with it, even if you think you can live without credit.

Other realities of the the credit industry include the fact that some insurers check your credit when determining premiums, and the fact that you might even have your credit checked if you want to get Internet service or cell phone service. Poor credit — or no credit — can mean higher costs to you. So, while you can live life without credit, it might cost you in the long run.

Does Credit Have to Mean Debt?

Of course, the other consideration is the fact that credit doesn’t always have to mean debt. Just because you use credit cards doesn’t mean that you have to be in debt all the time. Indeed, credit cards can actually be part of a frugal lifestyle, when you use them properly.

However, in order to make this work, you need to be able to keep a lid on your spending. One of the drawbacks to credit cards is that they make it so easy to spend money. Studies indicate that you are less likely to be mindful of your spending when using credit cards, and that you are likely to spend more than would normally. In order to use credit cards to best effect, you need to keep track of your spending — just as you would with your debit account.

It’s also important to understand that your credit cards aren’t another source of “income.” Too often, it’s easy to view credit cards as “available” money, when it’s borrowed. You have to think in terms of what you actually have, rather than viewing a credit card as another income source. Carefully track what you spend and make sure it fits in with your ability to pay. The worst thing you can do with a credit card is carry a balance. If you can’t pay off your balance each month, the use of a credit card is not for you.