The reality is that women are not empowered to deal with money, be in charge of money, or take advantage of money. Although women make up about 50% of financial managers, their growth tends to stop there since only 28% of chief executives are women. The statistic may seem hopeful but what it doesn’t state is how women are forced to prove themselves more than their male counterpart. Financial institutions are dominated by the traditional male culture and it’s an important time for women to step into the limelight. Women aren’t as freely able to bring new ideas or ways of problem-solving.
If it’s not your dream to take down Wall Street or open a business than the least you can do is be in charge of your wallet. I didn’t get my first credit card until I was twenty-two and I was terrified to get a second one. People in the United States are thousands of dollars in debt especially when it comes to credit cards. One of the primary reasons is that educational institutions do not prioritize teaching financial stability and well-being. There is no federal expectation that every student must take an economics or personal finance course in high school; leaving it up to the states and only 20 require it. So we watch our parents and learn from their habits- good or bad. But it doesn’t matter if their knowledge is high because if their habits are poor we are likely to follow suit.
Credit cards used to terrify me and it’s good to be scared, but it’s also important not to compare ourselves to the mistakes of the people around us. Credit card companies send offers in the mail shinier than ever before and commercials make you feel more powerful than even perfume commercials do. It’s almost as if with a credit card your wildest dreams can come true and we buy into it because they aren’t exactly wrong. Our modern society is largely built upon credit and what your score says about you, so to completely fight it is not realistic.
Here are healthy habits you can acquire to build a positive credit card lifestyle:
First credit card ever?
- Make a Budget and Resist Temptation
- Recognize the difference between a need and a want and accept that sometimes sacrifice is necessary. Calculate how much your monthly bills are that you cannot change and subtract that from your monthly paycheck (include a small savings, even something as small as $10)
- Be sure that the remaining total is for your free-spending and that’s it. Resisting temptation is critical so don’t criticize yourself. If you know you cannot afford something right now, tell yourself that it’s okay.
- Take Advantage of the Perks
- Credit card perks extend well beyond the popular ones mentioned in ads, such as cash back or no APR for a year. Sometimes credit cards will even offer purchase protections or roadside assistance. Take a moment and find out exactly what perks your card will have and if there are none, don’t even consider acquiring it!
- If you’re staying well within your limits then it’s best to earn as many points or cash-back opportunities as you can. Use your credit card as often as you can, especially for bills such as car insurance. When you redeem it, especially if it’s cash-back, be sure to tell yourself that it’s not extra pocket money. Your mind will want to fall into the many traps and excuses we tell ourselves, such as “It’s only $1.” The best way to take advantage of it is to put that money into savings for that big vacation you’ve been wanting to take.
- Pay Balance in Full
- It’s pretty straightforward and the most important. Responsible credit card users pay each monthly balance in full because this the only way to guarantee no interest charges or subsequent fees.
- Be sure to check all transactions to build a habit of looking after your accounts and ensuring there are no fraudulent charges. If there is an emergency then be sure to use less than 30% of your total credit so your credit score is unaffected. Also, don’t be afraid to negotiate a lower interest rate for your card.
Already in debt and need some fresh air?
- Transfer Balance
- Maybe the idea of getting another credit card when you have debt seems like a silly idea but not if it’s a balance transfer card. These card programs are designed for you to collectively put all of your credit card debt into one location. After the transfer is complete you will have a between 12-21 months with no interest on that card. Come up with a plan to only pay off the debt and do not use that card.
- Cut the Cards
- If your wallet is filled with multiple credit cards then be sure to chop it up. You can keep one available for absolute emergencies, but don’t keep it in your wallet. It’s important to create a budget and focus on using cash only.
- Be Frugal
- Be proud of yourself for saving money. There are numerous ways to save, but here are a few that may relate to you. Wait a couple of weeks before deciding a large purchase because you may simply forget about it. Invite friends over for “Sushi Saturday” instead of going out and charge them an entrance fee–they were willing to spend the $10 anyway and now you’re making money. Reduce habits such as drinking and smoking. Cancel that darn club membership because you may be saving two dollars on 30 rolls of toilet paper, but not if you can’t resist the bakery aisle. Remember there is no shame in buying something used, such as a book or a blender. Sometimes shopping is the majority of the fun so the next day, look over your purchases and return one thing you know you didn’t really need.
Most importantly, don’t beat yourself up for making a mistake because we all make them. If you knock yourself down too hard you will more likely make the same stress-purchase again. And remember credit cards are not synonymous with debt. The debt comes from not being taught from a young age how to handle money. Practice these steps and take the matter into your own hands by learning the best ways to build and maintain a healthy credit score.
Any tips that worked for you? Be sure to tell us in the comments!