When your credit card isn't the bill you should be looking at
Today many home owners have a mortgage offset or line of equity where they place all monthly purchases onto their credit card, place their incomes straight into the offset or mortgage and then pay the credit card off at the end of the month.
It can work well in theory saving you interest each month but what happens when you start to think about completing a budget at this time of year.
Month to month that credit card bill is sometimes the only bill you really need to worry about and definitely the biggest but if setting up a budget or Spending Plan, your credit card bill is no longer the bill you should be looking at.
To really understand where your money goes each week and month, you need to start looking at all of the items that make up your credit card bill each month and the not the total bill itself.
Next time your credit card bill comes in, do yourself a favour and look at what you charged during the month.
Do you remember charging each item?
How many items were planned spending and how many were spur of the moment choices?
Being able to answer these questions will help you to manage your money better and minimise the chances of getting a shock when you open that credit card bill each month.
Your budget or Spending Plan should include all of the items on your credit card bill and not the bill in total. If you are carrying forward a balance each month on your credit card then we need to treat this a little differently and you might benefit from one of our programs or giving us a call.
