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What My Mother Taught Me About Credit Cards And Family Finances
Copyright (c) 2007-2012 Braxton Heitz
My mother is an amazing woman. She made some of the hardest jobs imaginable look easy. No matter how hard her day was, she always had a smile and perfect hair.
She was mainly a stay at home mom but she worked cleaning houses when our family's financial situation called for more income. My dad was a soldier, so he didn't make a lot of money. The holidays usually wiped out our family savings account, but no one ever complained.
My mom has always been a money master. Her philosophy is a simple one that has never failed her. Work hard and spend little.
Mom is not an old woman, but her mother was raised during the Great Depression and eventually had to raise seven children on her own. She taught my mom how to make a can of beans last for weeks and my mom taught me, much to my husband's displeasure.
While I admire my matriarchs' simplistic approach to finances, it does not address the inevitable problems of credit and taxes. My education in money matters was limited to just mom's basic philosophy of life.
The world outside of my parent's traditional home was not quite what I was expecting, or what I had been prepared to handle. Despite the best intentions of my foremothers, there are still a few things that I wish my mother had taught me...
Credit Card Interest Hurts
Getting my own credit card for the first time was such a thrill. I bought my share of useless junk that I did not need. Unfortunately, I was not as cautious with my spending as I should have been.
Before I knew it, my credit card balance was astronomical. I could barely make my minimum payments. Since I started out with no credit, my interest rates were astronomical. It took months of payments before I finally began to pay on the principle and not just the interest.
After about a year I finally paid off the balance of my initial expenditures. I've been much more cautious with how much I will charge on a credit card, since my initial graduation from the school of hard knocks.
Don't Spend Money You Don't Have
Credit cards are tempting; because they allow us to spend money we don't have in our pockets. Ideally, when we spend money, we have the money in our bank accounts and just forgot to go to the ATM. Of course, most of us know that this is not the case.
Sometimes we spend money on important things. Buying groceries on Tuesday when we don't get paid until Friday for example. These are harmless purchases as long as we keep in mind how much we are getting paid on Friday.
Keeping a budget is probably the greatest thing a credit card holder can do. With a well-planned budget, anyone can track their finances in a way that allows them to spend wisely and with confidence.
Keep a Record And Look At It
With the ease of using credit cards to pay bills and buy stuff, it can be difficult to keep an accurate record of where our money is going. Ours is a generation that does not regularly balance their checkbook. Online banking has made it too easy to just check our available bank account summaries.
We don't scrutinize every transaction like our parents did. We simply trust the bank and believe that they would not make any errors. Credit card companies allow us to make payments online with out ever receiving a bill.
It has become incredibly easy to ignore the sheer volume of purchases made in a month. Credit card companies like to help us in our denial any way they can. But, keeping track of where we are spending our money is the key to maintaining our accounts and our credit rating.
Good Credit is Important
A good credit rating can mean the difference between advantageous and difficult situations. There are many perks to having a good credit rating. Low APR rates are one of the best benefits of having a good credit score.
Being able to make major purchases, such as a home or a car, also requires good credit. The total amount that an individual will have to pay for a loan is determined by how much he or she pays in interest. If someone has bad credit, one could end up paying thousands of dollars more in interest over the life of a loan.
Good credit is easy to come by, if we are responsible. Paying our bills on time is the best thing we can do to help our credit. Not putting too much on a credit card or having too many credit cards, can also improve a person's credit score.
Rewards Are Good
I love presents and I love shopping. Getting rewards from my credit card company feels like little thank you gifts for shopping. It is a great feeling. I wish I could get presents for doing all of the things I like.
While each credit card company is different, almost all of them offer credit card rewards to their customers for spending money, something we have to do to anyway. With so many options available for credit card reward programs, it would be impossible to not find one suited to our needs.
Reward options are endless. One can receive cash back rewards, airline miles, travel rewards, or even discounts at some of our favorite stores. For the more humanitarian shoppers, there are rewards programs that donate a percentage of a purchase to the charity of their choice.
Take Advantage of All of the Perks
Special credit card offers are some of the best ways to save money on items we would have to purchase anyway, no matter what. Everyday household items are a necessity. Taking advantage of a 0% interest credit card offer on a cash back rewards card can help us earn money for buying something we truly need.
Many online websites are dedicated to helping consumers find the right credit card for their needs. If we take the time to properly research what it available, we can uncover a whole world of moneymaking possibilities. They exist right under our nose.
In many cases, it is possible to fill out an online credit card application and receive instant credit card approval. There are countless ways to find a credit card application for the consumer's card of choice.
Contacting a favorite store and inquiring about their credit options is an easy way to save money where we like to shop. Many people choose to receive a credit card from their bank to help establish a better relationship with the bank.
Final Thoughts
It is amazing how much we learn from experience. Unfortunately, most of it is from bad experiences. I know I would much rather learn from someone else's mistakes, but people generally do not like to talk about their bleak financial histories.
My parents did a good job of teaching me how to work hard and build a good life. Knowing about all of the rules and pitfalls surrounding credit, loans and credit cards was sadly missing from my life lessons.
Schools are beginning to offer personal finance courses, but they do not yet require students to take them. Every year, more and more people declare bankruptcy and our schools do nothing to educate our youth about the pitfalls of taking on too much credit.
With a sound foundation of the demands of responsible spending, credit cards can be a great tool. Whether you discover through experience or education, the knowledge of how to care for your finances will be one of the most important things you ever learn.
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