I am the least qualified person to give financial advice! It has taken me most of my adult life to learn – from many mistakes – about debt and the pitfalls, as well as the importance of saving money.
And, I’m not an expert, nor have I mastered my finances by any means, but I DO have more wisdom about the subject from sheer experience, so I thought I would share for others who need to hear it.
First of all, let me say that some of this is very personal and vulnerable, but I want to share it to perhaps help a sister out!
As a female who went to college in the late 80s, I was hit with every credit card application imaginable. They approved me too. This was at a time when there was no financial literacy taught in school. I dove in head first.
I used credit cards like they were money in the bank. I saw that minimum payment as something I could do forever. This was my 18-20-something year old brain, who although was getting a higher education, was just dumb about financial decisions.
Then, let’s just say, I got into a life situation where that way of thinking compounded exponentially and before I knew it, I was deep in the debt dungeon. I can tell you honestly, I thought I would have bad credit for the rest of my life because of the ridiculous decisions that were made.
Guess what y’all! I’m now in the exceptional 800+ credit score bracket, I have savings, I don’t pay the minimum credit card payment, and I don’t live paycheck to paycheck.
This is from someone who could not get credit without a co-signer less than 10 years ago.
So, after receiving my cash back bonus email last week from one of my credit cards, I thought I would share a little of my midlife | late-in-life financial wisdom.
I spent about three years after a divorce paying off credit card debt. After rebuilding some credit, I started getting offers from credit cards with zero interest for 18 months or more and formulated a plan to consolidate the high interest cards into one and calculated how to pay it off before I paid any more interest. I did it! It was the best feeling to finally have no balance on a credit card a little over a year and a half ago.
Then, after catching the international travel bug last year (which isn’t doing me a lot of good in the current pandemic situation) I decided instead of paying anymore interest to a credit card company, I was going to learn how to have them pay me to use them.
Last July, I started doing some research for the best credit cards for me and my budget. Now, I am using my credit cards, paying them off each month and racking up cash back and points that I will use for travel once we can do that again!
After receiving an email this week with a summary of this past quarter’s cash back total which was about $18, I decided to see how much money I had saved in that particular account over the past year, since last July was when I really started changing how I was using credit cards.
With this one card, I have received $98 and some change. Now I realize that is not a lot of money, but it is money that I made from making everyday purchases.
This particular card (Discover) is one that offers 5% cash back each quarter on purchases from different industries or companies. For example, one quarter might be grocery purchases and another might be gas. I now deliberately use that card during specific times to maximize my return.
My main card is one that offers miles for every dollar spent that I will be able to convert to travel expenses. I should have enough saved to book another international flight in the year or so.
That will be a free international flight!
So, I wanted to share some tips that I shared last week on my Instagram Story in hopes it might help someone else either have hope that if you are in a debt dungeon, there is hope if you will just get those dang cards and creditors paid off and have patience.
- Don’t buy something if you can’t afford to pay for it right now just because you have a credit card with more limit.
- Pay off the balance each month. Don’t let that balance roll over because that means you are paying them instead of them paying you!
- Utilize cash back, points, or miles programs to save for vacations or big ticket items.
Do the research on which credit cards will work best for your budget. Also, remember if you are currently in a cycle of paying minimum payments and you have the opportunity for a new card with a long interest free period. It might be worthwhile for you to consolidate and figure out how much you can pay monthly to payoff that outstanding debt before the end of your interest free time period. I can promise you that you will feel the biggest sense of relief when you pay that last payment and have ZERO credit card balance! It’s an amazing feeling!