Do you ever feel like you just can’t get ahead, that there is some secret of “Emergency Fund for Military Families”?
You pay down the credit card, and then SOMETHING comes up. Again, and again the cycle goes, and you think “that’s life”.
And it is! Life happens. Tires will blow, toilets overflow, and LuLaRoe BOGO flash sales will (hopefully) happen. Even when you budget everything, you can’t see into the future. And that is where the credit card comes to the rescue, or so you think.
You can’t get off the merry-go-round because your emergency fund is lacking! The secret of the emergency fund is that the fund is a replacement for credit cards. So many people don’t look at the emergency fund that way.
When you have a solid emergency fund and a surprise expense comes up, you will not need to use the credit card. Once the expense is paid for out of the fund, it’s gone, paid for… never to be worried about again! If it gets put on a credit card, then you are just delaying the cost and adding interest.
What can you do?
Before you can jump off the merry-go-round you need a hefty enough emergency fund for your family.
Could you see this happening? You use all the income you can to pay off your credit cards to “get ahead”, but then your daughter makes the hallway “pretty” with your nail polish.
Your options are to put a bottle of acetone and a gallon of paint on the credit card you just paid off or take it out of savings.
Using the credit card will put you right back in the cycle. Using savings will keep you going in the right direction.
Change your mindset!
Most of us have a little savings, but we hate to “touch it”. It’s much easier to use the credit card you get airline miles for.
But to get out of the cycle of “never being able to save” or “not having enough to invest” you need to stop having payments on credit cards. To do this you need to stop relying on credit cards.
Save up a $1000 “credit card replacement fund”
- Once you have this, anytime you think you need to use your credit card. Take the money out of this fund instead.
Stop using credit cards as much as possible.
- Sure, when you go to book your flight home put it on your card and pay it right off. But don’t use the credit card because you forgot to budget car registration renewal.
Pay off your credit cards:
- Now that you’re no longer having to use your credit cards for little things each month you’ll be able to make head way and pay them off for good!
This may take a few months of getting used to. But when you start paying for things with money you have saved, You will be on your journey to financial freedom.