Budgeting with Credit Cards

Using Credit Cards to Simplify Household Budgeting

It may seem strange to think that you can actually simplify budgeting using your credit cards.  However, for the savvy money manager this is exactly the case. Using your credit card to create and maintain a budget will you will save time and money. At the same time, this will improve your credit rating as well.

Using your credit cards can help you stay organized and stay within your budget; helping to avoid costly late payments to other accounts and save money in interest and finance fees. Follow these steps to create a budget using your credit cards.

Creating the Budget:

The first thing you need to do is to determine your monthly income.. the amount you bring home (after taxes). What if you are not on a salary or your income is not a fixed amount? Simply take the amount you brought home last year and divide it by twelve months to give you an average monthly income.

Now gather your bills together.. including utilities, cable, phone, car payments, auto insurance, and any other monthly expenses. Add up all of these monthly expenses and don’t forget food, clothing, rent and so forth.

You will need to know the amount of expenses you need to cover for a month so that you can compare it with your monthly income. If your monthly income is less than your expenses, your budgeting plan will obviously need some adjustments. A balanced budget will be your first priority.

Choose a Credit Card:

The idea is to set up all of your bills to be paid automatically from your credit card each month. If you can use a credit card that offers incentives, such as a cash back or rewards card that’s even better. Set up all of your monthly expenses to be paid automatically using the credit card you have chosen.  Keep your budget and all expenditures in mind.

Look at your expense list and decide which expenditures can be paid using your credit card. You will discover most of your bills can be set up for automatic payments using a credit card. This will help to reduce the chance of your forgetting to pay a bill or being late on a payment due to delays in mail or other circumstances that may be beyond your control.

Budgeting Saves Time, Money and Stress:

When your credit card statement arrives all you have to do is pay off the bill. Now you are writing only one check to pay all of your monthly expenses.  As long as you pay off the balance each month, you will not have finance and interest charges.  This will save you time, money and a lot of stress.  As an added bonus, this will help improve your credit rating as well.

You will no longer have to worry about staying on top of various due dates. You will no longer have to worry whether you sent off that utility bill payment before you left on vacation. Once you have your bills set up to be paid automatically using your credit card, everything runs much more efficiently.  This is a great budgeting tool that will free up your time to concentrate on other things.

This totally alleviates the frustration of remembering to login to your account each month and pay the bill online.

From now on you will only have one bill to pay each month for all of your household expenses. Using this tool correctly can greatly reduce stress, as well as improve the quality of your financial life and your credit rating.