Credit Card Advice for Credit Card Users

Credit Cards are important part of many people’s lives. When used correctly, they are a very effective and a great way to pay for the things we need. However, it can be easier to fall into the traps that owning a credit card can often give you. Remember that if you’re applying for a credit card from your local bank, they will look at your financial history so it’s important that you do your best to keep it as positive as possible. Here is some friendly advice from one credit card user to another on how best to keep your credit score high and your stress low

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Having Enough

heart-doctor[1]Every few weeks I’ll lean in to my wife and whisper, “If I were to die tomorrow, I’d be a happy man.” It freaks her the hell out (and rightfully so) but it’s a reminder to her, and more importantly to myself, that as of this day in time I have enough.

I have enough love. I have enough things. And I (almost) have enough money 😉 It’s a pretty powerful thing to realize.

When you truly have enough you no longer spend energy or time chasing stuff in hopes they fulfill you. You still desire things like, say, millions of dollars or a 6 pack of beer/abs, but you know deep down that you don’t *need* any of that to be happy. They’re just “wants.” You’re thankful for what you have and you count your blessings for it – everything else is just gravy.

My friend Donna summed it up perfectly in a past article of hers:

“I have everything I need and some of what I want. How many people get to say that, and to mean it?”

That line has stuck with me for over a year and a half now. How beautiful it is to realize such a thing! How many people do we know who’s genuinely satisfied with their lives and not forever chasing fulfillment? And faux fulfillment at that? She later went on to divulge her income and why she’s now fineliving off $36,000/year instead of $85,000/year, and it’s an interesting read if you ever have a few seconds to check it out.

So how do you become content with a life so financially driven and fast paced? By taking the time to look around and acknowledge what you’re thankful for right now. It’s a lot harder to want more when you realize just how much you already have.

For example, here are the things that first come to mind when I stop and do this exercise myself:

  • I have two beautiful boys
  • I have (one) beautiful wife
  • I have a roof over my head with furniture and internet and electricity to keep me warm
  • I have tons of food and running water to keep our bellies full
  • I have a job I feel gives me purpose
  • I have a nest egg of money that’s (knock on wood) growing
  • And I have a beating heart and a pulse

That last one’s pretty important 🙂 But how often do you stop and consider that? How many people do you know who will never get more time here on Earth? If you were to die the second you finished reading this sentence, would you be passing on with a smile on your face?

I don’t mean to get all sentimental up in here, but these are the things we often overlook in the midst of our chaotic lives. We’re constantly chasing that “next thing” whatever it is and rarely take a few moments to soak in everything we’ve accomplished so far. When we hit $1,000 in savings we want to hurry up and get $2,000. When we pay off one credit card we want to hurry up and pay off the second. As soon as we get a promotion at work we want to go for the next one! All noble feats which of course we should always strive for, but we also need to be better about relishing what we have nowand give ourselves pats on the back too.

Here, I’ll give you 15 seconds to pause and think of one beautiful thing in your life right now. Close your eyes if no one’s watching and really concentrate on it. How would you feel if it were gone? How much better is your life with this thing in it?

I sometimes have these moments in life where I’m walking down the street alone and then all of a sudden feel this warmth of pure joy wash over me. As if to remind me to slow down for a hot minute and remember what living’s about. I don’t know where the heck it comes from or why it occurs when it does (it only happens every 3-4 years), but in those flashing seconds I’m the happiest I’ve ever felt. And then wonder if I’m about to be scooped away and lifted into the heavens, haha…

The point of all this, of course, is just to remind you that things aren’t so horrible all the time.We will have our $hitty days and things that’ll happen to us we’ll never quite understand, but we’ll also have a ton of joy and accomplished dreams come our way that we could never have imagined as well. In short, we have to do a better job of being thankful for what we have *in this moment right now* while we still have it ‘cuz Lord knows what our future holds.

So, if you’d allow me, I’d like to carry on my tradition of freaking people out and let you guys know that if this is the last time you ever hear from me on this sexy blog here, know I am one happy (and thankful) mother budgeter. And I couldn’t have asked for a more supportive, and genuinely nice, group of readers. I’ll try and email y’all from heaven.

What can we learn from Gen Y’s view of money?

Gen_Y-skeptic-274x300[1]This article is by staff writer Kristin Wong.

Recently, Fidelity released another survey about millennials and money. They found that 47 percent of us are saving for retirement. To me, that stat was really telling about our generation’s view of personal finance, and it’s not unlike other findings. When TIME wrote about the survey, they reported:

“Transamerica Center for Retirement Studies found that 71% of millennials eligible for a 401(k) plan participate and that 70% of millennials began saving at an average age of 22. By way of comparison, Boomers started saving at an average age of 35.”

It is self-reported data, sure. But it seems hard to deny that there is a heightened, post-recession interest in finance and our economy. We’re pushing for every manner of financial education — in schools and on the Internet. Personal finance has become an increasingly popular niche in the blogosphere. Even Paul Allen, co-founder of Microsoft, is involved in the production of movies designed to explain how our economy works. To me, it’s harder to believe there wouldn’t be some sort of new-found interest in personal finance after the Great Recession.

Another finding from Fidelity’s poll people found interesting:

  • When asked whom they trust most for information on money matters, 33 percent of millennials say they trust their parents, but 1 in 4 (23 percent) say they trust no one.

Considering the economic climate, it’s no wonder that millennials are skeptical. At my own blog,, one reader brought up a point that I hadn’t really considered: Our parents’ money advice might not apply because they come from a different time. Obviously, there’s some financial advice that is standard. Spend less than you earn, for instance, will always be the formula for financial independence. My parents taught me that at a young age, the advice stuck, and it’s working.

However, there’s stuff my parents couldn’t predict. I wanted to save money by going to a community college, for example. But their idea was for me to go to a “real university” — the more prestigious, the better — so they didn’t think my choice was very smart. After witnessing my younger brother’s massive tuition, though, I think they changed their minds a bit about saving money on college.

Sure, all of these studies on millennials and how they handle money are generalizations. The huge focus on our behavior borders on obsession if you ask me. Until recently, that focus has been pretty negative. But more studies and surveys are showing that Gen. Y is actually better with money than they’re given credit for.

Even if you take the stats with a grain of salt, I think there are a couple of lessons we can learn from the data.

It’s okay to be skeptical

For their study, Fidelity asked me if I’d like to produce a man-on-the-street video for them. It involved talking to people my age about money issues. The conversations I had with people closely mirrored Fidelity’s findings.

Most of the people I talked to said their parents gave them basic advice and they appreciated it, but there’s some stuff they’ve simply had to learn on their own. Because of the aftermath of the housing crisis and now the student loan crisis, young people seem to be skeptical of what other people tell them to do with their money.

That’s not a bad thing.

Separate from the video, I talked to a recent college grad about money. She complained about her massive student debt. What really bugged her about it was that most of it wasn’t necessary. Her student loan company approved her for $100,000. She told them she didn’t need that much.

“But they told me, ‘No, it’s fine. You’re approved, it doesn’t matter. You can just spend it.’ I was 18,” she told me. “Someone gives you $100,000 at 18, all you can think about is all the stuff you can buy. I learned my lesson.”

To me, this is a microcosm of why our generation, as a whole, has learned to be more careful, and yes, maybe even more skeptical, about financial advice.

In the man-on-the-street interviews, I asked the subjects where they got their money advice. Again, the response was mostly, “I learned on my own.” And this is going to make me sound like the worst money snob, but when they told me they were learning “on their own,” I assumed that meant they didn’t actually know anything. I was wrong. (Sorry, interviewees.)

We talked about personal finance books I didn’t think anyone outside of my money nerd friends would recognize. We talked about investing and homeownership and how your money mind-set changes as you get older.

One 26-year-old, on his way to lunch with a friend, said something that sounded like it came straight from the pages of this blog:

Now Me wants to have fun, but Future Me wants to have fun, too.”

It seems like Gen. Y is learning through a filter of skepticism — but they are learning. Our economy is changing, we’re recovering from our mistakes, and we want to make sure our moves are steady and well-calculated.

Learning to adapt

Millennials have been criticized for postponing families, not buying property, moving back in with our parents and even commuting.

I’ve done three out of four of those things, and they contributed immensely to my financial security. Moving back in with my mom was the last damn thing I wanted to do at 22. We were going through a rough time. And, of course, I wanted my freedom. But I saw it as an opportunity to get my finances in order, and, thankfully, my mom welcomed me. I didn’t think it was selfish, and she didn’t think it was selfish. In fact, she suggested it as a smart money move.

The economy sucks. The system sucks. Stuff needs to change. But in the meantime, millennials seem to be adapting and taking control of what they can — and that’s a good thing. To me, the way people are challenging traditional measures of success is an indication that we’re adapting. Yes, that might mean moving back in with your parents for a while so you can build an emergency fund. It might mean that you decide that renting is okay, because you don’t want to be house-poor.

We should try to make the bigger picture better; but in the meantime, it’s productive to work toward improving our own personal financial situation.

What do you think about the (generalized) financial habits of Gen. Y? Obviously, there’s room for improvement. While we might be surprised at the finding that 47 percent of millennials are saving for retirement, it’s also a concern that 53 percent are not saving.

Still, sometimes it seems like the stuff we get criticized for is the stuff we’re doing right. The headlines point out our flaws — but, to me, skepticism is healthy. And so is adapting.

I stand by the fact that I think there’s a shift toward financial security. It might not be any more attainable than it was (probably even less so). But it seems like more people, young and old, are interested in what it takes to recover from an economic crapstorm. After coming of age in the middle of that crapstorm, is it so hard to believe that millennials might be interested in developing better financial habits than previous generations?

Nine Debt-Forming Habits and How to Break Them

paper-pile-brendanc-600x400[1]The average American household with a credit card carries more than $15,000 in credit card debt, according to Add to that $1.2 trillion (and growing) in student loan debt, sprinkle in car loans, a mortgage, personal loans, and medical debt, and we’ve got ourselves an issue.

How did we get here?

The reasons we’re in debt, of course, vary from person to person. But there are some habits and behaviors that can lead to debt or cause existing debt to grow instead of dissipate.

 Here are nine habits that might be adding more debt to your life, and suggestions for breaking those habits before they get worse:

1. You Rationalize Your Purchases

One common habit of people in debt is rationalizing the unnecessary purchases they make. And there are even several ways people can rationalize.

First, there’s the “Hey, I deserve this!” line we tell ourselves. We work hard for our money; we deserve a little treat, right? The answer is yes, but only if you can afford it. If you’re going into debt for an item, you shouldn’t be getting it. It’s simple.

There’s also the “I need this” or “I need to do this” theory. I have an important work function, and I need these new shoes to look my best. All my friends are going on this trip, so I need to go. I didn’t have a lot of toys when I was a kid, so I need to give that to my child.

How to break the habit: This habit can be tricky to break since you need to change your perspective. Instead of spending money to reward yourself for working or to feel good, find free or more affordable ways to give yourself that gratification.

Second, don’t make purchases right away. Before you buy something or plan a trip, really reflect on your current financial situation. Is this really a need? Or is it actually a want? Can I wait to buy this until I have the money for it instead of using credit?

2. You Assume You’ll Make More Money Later On

We assume we’ll get a better job, earn a promotion, or somehow be earning more money later on. Why do without now when we can simply pay off our debt later when we have more money?

A prime example of this habit is with student loan debt: The average student graduates with more than $40,000 in debt.

The unfortunate truth is, that great pay increase isn’t guaranteed, and may never come. Then you’re dealing with massive debt.

But even if it does come, you’ve been paying interest on these items. So while you may be charging a $20 dinner, a $100 jacket, or a $1,500 vacation, those items are actually costing you much more with interest.

How to break the habit: Don’t make assumptions. You can only work with the true reality of what you have in front of you. If you want to buy something, save for it until you can afford it. And think about it: Even if you do end up earning more money later, do you really want to have to spend it paying off old debts and racked-up interest?

3. You’re Disorganized With Your Bills

It’s easy to get disorganized with your bills. After all, there are a lot of them to keep track of, and they come at all different times of the month. You might get a portion of your statements online and a few in the mail. Some bills may get automatically deducted from your account, while others you pay yourself.

 Unfortunately, this inconsistency can create debt for a number of reasons. If you’re not monitoring your statements or keeping track of your bills, you may be spending more than you can afford. Plus, you may never know if there’s a mistake on your statement and you’ve been charged for something you didn’t purchase.

Also, late payments can cause your debt to increase with late fees, or, in some cases, cause your interest rate to go up.

How to break the habit: Find a system that helps you get organized and stay consistent with your bills. Set reminders on your calendar when bills are due each month, or set aside an hour each week to check your statements and schedule or send payments.

4. You’re in Denial and/or Not Dealing With Your Debt

An estimated 35% of Americans have debt in collections, according to a study by the Urban Institute. One obvious reason is that some people are simply unable to pay their debt. But there are also those who choose to ignore it.

Being in debt can feel like you’re drowning, leaving you completely overwhelmed. You may feel like you don’t even know where to begin; when you think about it, you grow anxious. It can be tempting to simply ignore the debt.

That’s a bad decision. The debt will do nothing but increase with interest. Plus, you’re going to cause harm to your credit report, which can make it difficult to get a mortgage, qualify for a loan, or even rent an apartment.

How to break the habit: While it may be hard at first, face your debt head on, since that’s the only way you’re going to deal with it. Understand what you owe, what the interest is, and form a plan of attack. If you’re unable to make payments, call your credit card companies or lenders to see what type of plan they can work out with you. If student loans are an issue, you may be able to explore an income-based repayment option or an economic hardship deferment that could temporarily help your situation.

5. You Don’t Budget or Keep Track of Your Money

A recent poll showed that only 32 percent of people actually have a budget. If you’re not budgeting, you may not realize how much you’re spending every month, or what you’re spending it on. Since we use credit cards for so many purchases, it can be quite easy to spend more than we earn, which is going to lead to debt.

How to break the habit: Create a budget by figuring out your income, then subtracting your set bills, such as rent, utilities, cell phone plan, and whatever else you spend every month. Now you can figure out what you have left to spend on food, entertainment, transportation, and other more flexible expenses.

The trick is to make it balance. You may need to cut your bills (e.g., cancel cable, turn down the thermostat, downgrade your cell phone plan), cut expenses (stick to sales and coupons at the grocery store, carpool to work, find free things to do for entertainment), or earn more money (take on extra shifts at work, get a part-time job, sell unwanted items) to strike a balance between what you earn and what you spend.

6. You’re an Impulse Spender

You see something, you want it, you buy it. Sound familiar? With the swipe of a credit card, a click of a mouse, and even now a tap of the phone, we get what we want. If you’re an impulse shopper, this could be a habit that is causing you debt.

How to break the habit: Create a new “one-week” rule. Take a photo of something you want to buy, and take time to think about whether or not it’s a good decision. Consider opting out of e-mails from your favorite stores and deal sites that could create temptation to buy. When grocery shopping, try planning your meals in advance based off what’s on sale and make a list. Stick to the list to avoid those impulse buys.

7. You’re Using Credit Cards the Wrong Way

Credit cards aren’t the reason you’re in debt. It’s how you’re using them. In reality, if used correctly, credit cards can be beneficial. If you’re able to pay off the balance each month and not accrue interest, they can help you build a solid credit score and improve your credit report. This can help you get a better rate on a mortgage or student loan in the future.

Plus, using credit cards in a smart way can earn you cash back or other types of rewards. And many cards offer fraud protection and other benefits, so they’re a safe and sensible way to spend when making big purchases you’d be making anyway.

However, a debt causing habit is using credit cards the wrong way. Almost a third of Americans report having more credit card debt than savings. If you’re using credit cards to fund a lifestyle you can’t afford, that is a bad habit.

How to break the habit: Reevaluate your relationship with credit cards. Tally up what you’re actually paying in interest every month, and use it as a motive to stop spending before it gets any farther out of hand. If you’re in credit card debt, stop charging and start working on paying that balance down.

8. You Don’t Think ‘the Worst’ Is Going to Happen

More than 28% of Americans have no money saved for emergencies, according to If something unexpected occurs and you don’t have an emergency fund or savings, you’ll most likely turn to credit cards for help.

No one wants to think something bad is going to happen, but the truth is, things go wrong. From a car breakdown to a job loss, bad stuff happens — stuff that would cause a lot less havoc in our lives if we had money set aside to help. If you’re turning to credit cards as a security blanket, interest charges will cause that debt to rise quickly.

The same is true for health issues. If you don’t have health insurance, you’re putting yourself at risk for the burden of medical debt, which is the single biggest cause of personal bankruptcies in America. Nearly half of low- and middle-income households have medical expenses on credit card debt, at an average amount of $1,678.

How to break the habit: Start saving a portion of your earnings every month for an emergency fund. Even if you’re only able to save a little each month, it’s better than nothing, and it will add up. Find ways to make extra money or cut expenses to add to the fund. Anything you have saved in an emergency fund is that much less debt you’ll need to take on should something happen.

If you don’t have health insurance, visit to explore affordable plans.

9. You’re Trying to Keep Up With Others

Our culture generally associates success and happiness with material things — like a big house and an abundance of money. If you don’t have these things, you may feel like you aren’t successful.

Unfortunately, people often feel pressure to “keep up with Joneses” and purchase items they can’t afford just to impress — or simply feel like they’re not being surpassed by — those around them. According to a Federal Reserve Board study, an astounding43% of families are spending more than they earn in America.

Buying things to maintain a certain image or lifestyle is unlikely to bring you fulfillment or happiness. In fact, if you can’t afford it, it’s more likely to cause you stress and anxiety as you fall deeper and deeper into debt.

You may not even be trying to impress anyone — maybe you simply don’t want to miss out. If you have friends that earn more money than you do, you may be tempted to go to the same restaurants or take the same pricey trips as they do. It doesn’t bother you, or them, that you make less money than they do — but you want to do what they do, because you enjoy their company.

How to break the habit: If you are in a social circle where people are judging you on your income and the price of items you are buying, it may be time to break away and find friends who aren’t concerned with your money. Understand that it’s not what you have, but it’s what you do and how you live your life that makes you a successful person.

If your friends are earning more money than you, and you feel pressure to spend what they’re spending, be honest. Let them know you can’t keep up with expensive dinners and pricey nights out. Suggest more affordable things you can do together instead.


This article is provided by Brothers Kitchen Blog

To what do you attribute your success — hard work or good fortune?

This article is by staff writer Kristin Wong.

Every now and then, I get an email from a fellow writer who’s just starting out and wondering where to begin. “How did you do it?” they ask. “How did you make freelance writing your career?”

It’s flattering, but what do I say? First of all, I’m still working to reach my own writing goals, so I’m not even sure I’d be the best person to ask. But also, any success that I may have had as a freelancer has at least a little to do with luck. True, it’s mostly hard work, but auspicious timing and lucky breaks have also helped my career along the way.

For example, when I started writing for MSN, it wasn’t because I worked hard to get their attention and relentlessly pursued their editors. It was also because I had an enormously talented and kind friend who landed a job there, and she happened to be hiring freelancers right as I decided to leave my job to become a freelance writer.

I’m not saying I wouldn’t have gotten that gig had I not worked hard. But it also helped that I knew someone whose department was hiring at the right time. As important a role as hard work plays in success, it’s also important to acknowledge good fortune. Here’s why.

Self-attribution bias

Disregarding the role of coincidence can make you believe a certain behavior is effective when it really isn’t — or worse, that behavior can actually work against you. Carl Richards of The Behavior Gap called it “lucky fool syndrome.”

“What sets off the lucky fool syndrome? Psychologists call it the self-attribution bias. It means we’re inclined to take all the credit for things going well, but we have no problem blaming outside forces when things go wrong. On top of our bias, we have a very difficult time separating skill from luck. As a result, we’re susceptible to the lucky fool syndrome and the problems that come with it.”

Investing is a perfect example. Richards cites a 2013 study, Self-Attribution Bias in Consumer Financial Decision-Making. In it, researchers studied the impact that investment returns had on how people perceived their own skills. When returns were good, subjects credited their awesome investing skills. When the market sucked, as it sometimes does, investors blamed it on bad luck.

This sounds harmless enough. What’s wrong with a little innocent self-delusion? The problem is, it can lead to costly mistakes.

Take my own example of self-attribution bias. When I decided to try my hand at active trading, I had huge returns within the first few months. I convinced myself I had a natural talent for it. (Embarrassingly, I believe I referred to myself as an investing genius, only in my head, of course.) I deluded myself into thinking that somehow I was able to accurately calculate the future, even though the most skilled and experienced investors can’t time the market.

So I repeated the “skills” I thought I possessed that helped me get those returns. The result? I lost $400 — more than half of my earnings. I should have cashed out when I got lucky. Instead, I learned the hard way that discounting the role of luck can come at a cost.

There is another problem with self-attribution bias. It limits our empathy and understanding. We think that, because one method or formula for success worked for us, that must be the magic formula for everyone. We think we have all the answers, so we stop considering any other possible problems or solutions. And sometimes we actually offer terrible insight. This article I wrote a year ago is like the case in point:

“I’ve found that it usually helps, when asking for something, to remind people that you’re human. When arguing for a raise, I reminded my boss that my financial situation was suffering due to inflation…”

I cringe reading my own words. Readers totally called me out on this, and rightfully so. This is the exact opposite of what most experts agree you should do. But because it happened to work for me, I figured, without giving it much additional thought, that it would work for everyone. Sure, my own good diligence helped me nab that raise, but I think it’s a good example of how self-attribution bias can limit your understanding.

Maybe it’s a balancing act

None of this is to say that hard work isn’t absolutely necessary. With most things, if you want to succeed, it takes a great deal of effort. Take my mom’s savings story. Despite being poor, she did whatever she could, sacrificing quite a bit just to save a few bucks a week. That’s the hard work.

But she acknowledges a few things out of her control actually worked in her favor: interest rates, overtime availability, and a part-time job opening. She told me:

“Not everyone sees overtime as lucky. Everybody gets lucky breaks, but it depends on you seeing it as a lucky break.”

Maybe the key to success is taking advantage of both — seizing those lucky breaks by being willing to do the work when they happen. Maybe it’s about recognizing the opportunities and taking advantage of them in the right way. Most of us aren’t lucky enough to make it on our good fortune alone. In fact, without effort, any luck that does come your way could easily be squandered. For example, if you are an over-spender, you might blow through a windfall. But if you’ve been working hard to get control of your finances, you may be more inclined to use that windfall to reach your financial goals.

Luck alone probably won’t get us far. But it seems that recognizing it can work in our favor. It helps us take advantage of those auspicious opportunities and, plus, it gives us a better understanding of our skills and exactly how our hard work pays off. It seems to me that understanding this balance is a little more realistic anyway.

Do you attribute your success to hard work or good fortune? Have you seen self-attribution bias backfire before? Have you changed how you view working hard versus being lucky?