Budgeting with a Credit Card
Staying on budget requires a certain degree of discipline and initiative. After all, you have to be willing to set specific boundaries for your spending and have the self-control to live within those limitations.
For some people, budgeting becomes much easier if they only let themselves use cash when it comes to everyday purchases. Budgeting this way can make it much easier to stick to your limits because they become as tangible as the cash in your wallet. For example, if you only have $100 that you want to spend on groceries, it’s much easier to stay within that budgeted amount because if your total runs over $100, you won’t have any more cash to spend.
However, it isn’t always easy or feasible for everyone to use cash for everyday expenses. You likely need to keep a relatively large amount of cash on you most of the time and that’s not something everyone feels comfortable doing. It can also be difficult to keep track of your purchases, unless you are able to keep up with all of your paper receipts for every purchase you make – which is not an easy feat. Third, exclusively using cash means missing out on all kinds of perks that come with using credit – things like cash-back or other credit card rewards, purchase protection, and even extended warranties on products you buy.
These perks, plus not having to carry large amounts of cash, are part of the reason why many people avoid cash altogether and stick to credit instead. Some people even argue that credit cards are better for budgeting purposes. There are several benefits to using a credit card as a budgeting tool:
Track Your Spending
When you use a credit card, you can easily monitor your daily spending within your Digital Banking app. Regularly reviewing your account activity will ensure you always know how much you have left to spend, and will help you allocate your funds wisely. Our personal financial management tool, Money Manager, allows you to create various budgets and spending goals to better assist how you track your spending.
If you have signed up for e-Alerts for your credit card account, you will receive instant notifications on your mobile device of your selected account activity. You can choose to be notified when your account reaches a certain balance, so you’ll know when to reign in your spending for the rest of the month. You can also choose to be notified of card purchases, direct deposits, and more. Having alerts delivered directly to your mobile device can help you stay on top of your finances at all times.
Use Automatic Payments
With your credit card, you also have the ability to set up automatic payments for monthly household expenses (e.g., cell phone, insurance and utilities bills), therefore reducing the risk of late payments or overdraft fees from your checking account. You can enroll in Bill Pay today through Digital Banking to automate your payments.
See the Big Picture
In addition to saving you from piles of paper receipts, your digital credit card statement can help you visualize the bigger picture of your spending. For example, one glance at your digital account statement might reveal that you’ve spent far more than you planned on groceries this month. Or perhaps you ate dinner at your favorite restaurant a few too many times. Individual receipts document each purchase you make, but digital bank or credit card statements help you see how all of your individual purchases add up. Once you see what all of your spending together really looks like, you can create better budgets and stick to them.
Though many of these benefits are also available through debit cards and checking accounts, the rewards programs associated with most credit cards can help you save significantly on everyday items.
Robins Financial Credit Union is committed to helping our members get their finances on track. Our Financial Calculators help you set savings goals and plan for major expenses, and our Money Manager tool available within Digital Banking helps you set goals and track your spending habits.
If you’re ready for premium purchasing power and outstanding perks and rewards, apply for our Visa® Platinum Rewards Credit Card. Enjoy low rates, top-of-the-line security, and earn points on your purchases through the Scorecard® Rewards Program. You can apply now online, or stop by a branch or give us a call to find out more.