How Can I be Better at Balancing my Budget with a Credit Card?

February 11, 2019

Credit cards are such a common form of payment in society today that its rare for someone not to have a credit card. But can having a credit card help you balance your budget better? Or do credit cards just cause more budgeting blunders?

With the help of MaxCash’s credit card experts, you’re about to learn just how it works.

What Does a Balanced Budget Look Like?

A balanced budget is a phrase often heard when it comes to dealing with financial issues. But the meaning of a balanced budget can be confusing to those new to the lending process. To help clients of all experience levels, we’re going to go over what exactly the phrase means before we get to the part about achieving it.

A balanced budget is a rather simple concept. Broken down to the most basic terms, it’s a budget in which your spending is equivalent to or exceeded by your income. The use of the word “balanced” is a bit of a misnomer in this case. In the end, it refers more to the stability that comes with having this kind of budget than it does the actual balancing of funds.

That is generally the goal of having this kind of budget though: stability. Your budget falling out of balance means you’ve spent more than you’d normally be able to afford. Continued imbalance of your budget can result in significant financial distress, so it’s important to try maintaining balance.

How Credit Cards Can Help Balance Your Budget

Credit cards have aspects to them that are helpful for budget balancing. Some of those aspects will passively assist you when it comes to balance, while others will require a more active approach. A few of those aspects are:

  • Tracking – One of the biggest assistances credit cards provide is a guaranteed way to track spending and totals. With cash, you’d have to keep track of your own spending statistics: when, where, and how much. But with credit cards, every charge is tracked online on your provider’s website, letting you chart your costs.
  • The Payment Delay – Unlike other types of funding, credit card charges don’t take out of your account immediately, only coming due after 30 days. Seeing as how most types of income occur either weekly or bi-weekly throughout the month, this allows clients to build up funds before their payment is due.
  • Rewards Systems – Many types of higher-end cards end up having rewards systems included as part of the package, which can directly help your budget balance. Most common are cash-back and points programs, which reward you for paying off bills regularly with a point conversion. These points can then be used to make purchases or even be converted back to money.
  • Inherent Benefits – Some varieties of cards, like travel cards, have bonuses you can get just from being an owner. These benefits can include everything from fraud protection to free entry at certain kinds of establishments, like museums.

Making the best of these credit card aspects, as well as seeking out the card with the best effects for your circumstances, can be a budget-saver on its own. But we’re not done yet. We may have gone over what tools your credit card puts at your disposal, but now it’s time to talk strategy.

Credit Cards and Your Budget Balancing Game Plan

The benefits we listed in the prior section won’t help you much if you don’t have a plan laid out to make use of them. There are all kinds of different possible paths you can take to plan your financial life.

Picking the right method for your specific situation can be just as important as picking out the right type of credit card. Let’s cover some common strategies and what makes them so effective.

  • Spreadsheet Method – If you’re a whiz in Excel or Google Sheets, this is the method for you. Before each month, the spreadsheet method sees to you divvying up your expected income amongst your planned expenses. All of this occurs before you even spend a cent. Then, throughout the month, you track your actual expenses. Comparing the two can help you know where to make improvements.
  • The 50/30/20 Method – This method allows you to give yourself hard limits when it comes to your credit and spending, by giving you hard number categories for your income. 50% of your income goes to required payments—like bills. 30% goes to desires and splurges. The final 20% goes into your savings, helping to build a stable foundation.
  • The Reverse Budget – This one can take a bit of fine-tuning to get right, but does away with all of the math. Instead of covering expenses first, you determine how much of your income goes to savings immediately. The rest is all you’re allowed to use for your remaining monthly costs.
  • Online Budget Sites – There exist multitudes of different budget assistance websites, each with different specialties and offerings. Check out this handy list of options and give them a shot to find out which one is the right one for you.

As you can see, there’s all kinds of different ways you can get your budget perfectly balanced, as all things should be. Make use of this advice, and as always, stay tuned to MaxCash’s credit card section to keep learning about how to get the most out of your credit card.

DISCLAIMER:
The MaxCash website does not offer or provide loans, but rather, it offers a service. It should not be construed as a lending agent or broker. The site does not endorse any lenders and does not charge visitors any fees. The website owners do not evaluate potential lenders’ applications, nor do they approve or deny credit. The MaxCash website does gather applicants’ personal information and transmits it to lenders that are part of the site’s lending network. No one is required to make use of this website, nor are they under any obligation to begin contact with site operators or to attempt to secure a loan with any of the site’s lending partners. Transmission of your financial and personal information on the website in no way obligates lenders to offer you a loan or any other kind of credit product. Be aware that cash transfer times can vary, depending on the lender and the bank you use. It may be necessary to fax information under certain circumstances. All questions about loans, and any concerns you may have should be directed to your lender. These loans are intended as short-term financial solution to satisfy borrowers’ needs for immediate monetary relief. This is not intended to be part of a long-term financial plan for individuals. These services are not offered in all states. Potential borrows may undergo credit check if lenders choose to use any of the major credit reporting bureaus, including Equifax, Trans Union and Experian. They may also use other alternative sources to check credit ratings. Your request for a loan constitutes your agreement and acknowledgement that (A) your personal data may be shared with lenders and perhaps other third-party partners, and (B) lenders can acquire credit bureau reports that detail your credit history. Reports from major credit bureaus, such as Equifax, Experian and TransUnion may be obtained and used to evaluate your reliability as a borrower.

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2Since we do not lend money directly we cannot offer you a solicitation for a loan. In all serviced states we WILL match you with a lender based on the information you provide on this website. We will not charge you for this service and our service is not available in all states. States that are serviced by this Web Site may change from time to time and without notice. Personal Unsecured Loans are not available in all states and all areas.

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