10 February 2009

Tip of the Day February 10, 2009

Living With Cash!

If you don't have the cash, don't buy it. This is the simplest thing and yet it can be so difficult, especially when credit is involved. Somehow paying for something with a little plastic card doesn't send the "warning: spending in progress" alarm off in the brain. For years credit has been easy, too easy, to get. What is forgotten is that it comes with a very steep price.

Think of it this way: when you buy something on credit (that wasn't budgeted for) you don't own it until you've paid it off - the buying price and the interest if you don't pay the credit card bill immediately. Living on a cash budget and sticking to the $100/24 Hour Rule might not be what everyone else is doing but they will help you to live below your means and build up savings for the tough times and own everything you buy.

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