When I talk to prospects or clients about credit cards I can always tell pretty quickly how they feel about those pieces of plastic. Some say they love the benefits, points, or other rewards that come with having a certain card. While others become quiet and are nervous when having to admit how much credit card debt they’ve accumulated. There’s also a third group of people. Those that are so afraid of their money and spending habits that they don’t even look at the bill or balance.
If you are one of the two people I described that don’t have the best relationship with credit cards, today’s post is for you. We are diving into steps you can take to begin changing your relationship with credit cards.
Let’s dig in with the first step…and yes that one is going to be harsh but bear with me: You need to actually open your credit card statement. Yes, I see you over there with the unopened pile of statements. Every month when it comes in the mail and you don’t even open the envelope because you either have auto pay or you’re set up to make a minimum payment or to just pay off the balance in full. Credit cards are used for a majority of people’s purchases. If you aren’t opening and looking through your statements how do you know where your hard earned dollars are going?
Ok now that you have the statement open and you are still alive (deep breathe in deep breathe out) don’t just throw it away or exit the tab. Here are a few things that you should be looking for:
- Any fraudulent or suspicious charges
- Charges that could have been made by other family members that you don’t approve (i.e. the kids spending yet another $25 on Roblox without asking permission)
- Recurring charges for subscriptions are services that should be canceled
- Confirm charges that were made
- This is especially true for restaurants or places where you might have tipped
- Keep an eye out for any major or unexpected charges
- Did we have to go back to school shopping for the kids this month?
- Did the care need new brakes? Take note of these and see how they impacted your budget
Your credit card statement tells a story. Remember that when you open the statement you most likely can’t change the charges or purchases that you made (other than fraud). If something sticks out to you while looking at the statement, think about how you can change that spending habit or change your budget going forward.
Personally, when I open my statement I am looking to see where my spending tracked in relation to my budget. If I overspent in one category maybe it was because I underspent in another. In addition, I know that my spending will ebb and flow. I used to fear opening my credit card statement and seeing where all of my money went. But now I check my changes constantly (honestly almost daily) to make sure I know where my money is going and if my spending is on track with my goals. As always, be patient with yourself and changing your relationship with your credit cards is going to take time and practice.