Eliminate the monthly credit card statement scaries
Tell me if you’ve had this experience:
You get your credit card statement at the end of the billing cycle and it’s much bigger than you expected. You look through it briefly, trying to find the cause. You see that you had an oil change that was $80. That must have been it! You didn’t expect to have your oil changed last month. But, the entire credit card bill is $3,000. As you’re looking through it, you can’t really seem to see why it is so high. It’s all the usual stuff you typically buy. You think to yourself “oh well, I’ll do better next month.”
Can you relate?
This was exactly my experience before I started tracking my spending and using a budget. I never could pinpoint what was causing my credit card bills to be so big, or larger than I expected. Here’s are the main two reasons why they surprised me:
1. The only budget I kept was in my head.
2. All those little expenses really do add up, and if we don’t know what they are, we’re not going to know how to “do better next month.”
If you saw this post on how I “budgeted” before, you know that I only thought about the big stuff – rent/mortgage, utilities, car payment, debt payments, insurance premiums – and then I would assume anything leftover of my income was for anything else I wanted. None of this was kept on paper – I loosely knew these numbers and just hoped it worked out each month. Because it generally did, my system then was good enough. But, because I didn’t have a budget and didn’t keep track of my expenses, I didn’t know what I was spending on things, nor did I have a plan for how much to expect to spend on those things. Only once I started tracking expenses and making a budget that set boundaries for me did I begin to understand my credit card statement at the end of every month – and not panic when I got it!
The other thing I found was that it was rarely one big expense that caused my credit card bill to be large – it was all the little stuff I was mindlessly purchasing. I was spending $150 a month on manicures and pedicures, several hundred dollars a month on eating (and drinking) out, and even more money on clothes and shoes. I didn’t say “no” to much of anything. Only once I started tracking my expenses was I able to see these patterns.
Through tracking your expenses and creating a budget, you’re able to spend much more deliberately – reducing the credit card bill, and reducing the stress that comes with it when it arrives each month.