One of the most common problems that puts people into debt is spending money before they have it. People will go out and buy a new car because they are expecting a raise. In a perfect world any time you think you’re getting some extra money it would always pan out. In reality, expected income doesn’t always turn into actual money in your bank account.
When you spend money ahead of receiving it you start operating in “debt” mode. This can be a dangerous habit to practice. Credit cards often encourage this because you expect to have more money by the time the bill comes in 30 days.
The best use of a credit card is just like checks–you don’t write checks for money that isn’t in the account. Do the same thing with your credit card–don’t spend money on your credit card unless it is already in your bank account. This simple practice will go a long ways to keeping you out of debt.
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