Do you do your budget with credit cards?

No matter how much our income and how big our household is, we have to work within a certain budget. And however we figure it out; budgeting is not a walk in the park.

Budgeting is stressful because it is associated with the fear of not affording everything on our plate. Each month, expenses change. Sometimes, we consume low; other times, we consume high. The ideal way is to spend less than we make. But with today’s economic slump and inflation, we are spending more but getting less. Our trip to the gas pump will prove that.

As we have no idea when the economy would get better, we are left with no option but sharpen our budgeting skill. Our monthly income may not match the rising cost of commodities, but we can re-figure our budget and make it work. Hopefully, we would not turn to credit cards and personal loans just so we can make ends meet.

I remember when I was in college. Even though I was financially dependent on my parents, the responsibility of allocating the money I had was totally dependent on me. I had to pay for the dormitory, school projects, food, and fare, and make sure that everything is accounted for until I receive the next allowance.

Back then there was no credit card, so if I ran out of money before my allowance came, then I had to deal with it no matter how painful it was (if I did not have to eat, then I would not). That’s when I learned how important budgeting is. Good budgeting and discipline go hand in hand. Holding up until you’re able to afford something is good practice and would save you from the pain of credit card debt in the future.

Now for stress-free budgeting, here’s my checklist:

1.       Do your budgeting in the morning when it is quiet, you have plenty of time (perhaps, over a cup of coffee), you are refreshed, and your mind is uncluttered.

2.       List what you need to pay for the month on a fixed amount. This category includes, mortgage/rent, car payment, telephone, insurance, cable. This is your List A. It is good to have a notebook to write all these.

3.       List what you need to pay for the month on a variable amount. This category includes electric, gas, food. In this category, the amount changes depending on your consumption. Although these are things you cannot do without, you can cut back on them and save the money. This is your List B.

4.       List what you want to buy for the month. This category includes household, special occasion, and personal items. This is your want list: things you want to have but can do without. This is your List C.

5.       Write down the money that came in and would come in for the month. This is your List D.

6.       Add up Lists A, B, and C and subtract the total to List D. If you find yourself having extra, then you can save it or make it your back-up fund.  If you find yourself in the negative, redo your budget in List C. If it would still not work, refigure out your List B.

Only reach for your credit card if you think you have done your best and there is no way that everything can fit in the budget. Using a credit card for monthly bills and necessities is not advisable but it is also not worth killing yourself just to stick to the budget. Use your credit card with sense and not with guilt. Today’s economy is enabling us to do just that.