By John Kennedy, CFP® / November 16th, 2020
Spend Up Spend Down – Family Budgeting
Who doesn’t love credit cards? They give you the opportunity to carry a balance while also rewarding you for your spending, providing cash back and points. Credit cards are meant to encourage you to extend yourself though. Carrying a balance from month to month will only increase the total amount you pay in interest. And even if you’re someone who pays your credit card off each month, studies show you’re still spending an average of 18 to 20 percent more than you would if you used cash or a debit card. Psychology shows us we feel differently about seeing a checking account going down versus watching the balance of your credit card increase.
I challenge you to go 60 days without using your credit card. Report back to us with your results. We’d love to hear how your spending changed or whether you grew more in tune with your checking account balance.