Credit Cards

How To Use Credit Cards to Manage Your Budget

When I switched to using credit cards 100 percent of the time, I found they helped me keep tabs on my spending, set limits and establish goals. I completely eliminated carrying cash, and my finances have improved by leaps and bounds. I paid my balance off in full every month and ended up profiting about $50 a month in rewards.

Track What You Spend and Establish Your Budget

Before you can create a budget, you need to know what you’re really spending, which credit cards make easy with detailed tracking of every transaction. You can organize your transactions by categories like groceries, eating out, entertainment or car repairs.

If you want to freak yourself out, most credit card companies offer a year-end snapshot, complete with a color-coded graph showing where all your hard-earned money went—I apparently spend an appalling amount of money at the corner ice cream shop.

From your transaction history, you can see what you spend on average and identify areas where you can cut down, such as eliminating eating out every week.

Online Tools To Manage Your Budget and Credit Cards

There are many free or low-cost tools and apps available to help you manage your money, track your spending and keep on top of your financial goals:

Mint.com: Mint is a completely free service. You link up all of your accounts, including your savings, checking, retirement funds, credit cards, student loans and other debt. You can even enter your assets, such as your car or home. After you’ve linked all of your accounts, you can set budgets for each category, like car insurance, entertainment and clothing. Mint automatically picks up whenever you use your credit card or transfer money, categorizes your purchases and will update you on how close you are to going over budget.

You Need a Budget: You Need a Budget (YNAB) has a cult following, and for good reason. Its motto is that every dollar has a job, from paying down debt to adding to savings. YNAB syncs to your mobile device and your computer but requires you to take an active role in creating budget categories and keeping up-to-date on how you’re doing in each area. YNAB is $50 a year or $5 a month.

About the author

Kat Tretina

Kat Tretina

Kat Tretina is a freelance writer in the Orlando area. With a passion for personal finance, she aims to help people achieve financial freedom.

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