We are skipping advice #4 in the column because I covered it in a very similar fashion in advice #9 Laugh Every Day.
Number 5 is “Pay off your credit cards every month.”
Better yet kid, pay with cash. Living within your means is just that–spending what you have. Of course when you do things like go to college or buy a house some long term loans will most likely be involved. However, if you max out your credit card in the first month you get it–you won’t be paying it off soon unless you waited until you were a doctor to get a credit card.
Credit cards can be used to serve a purpose. In college I charged my gas each month to a credit card so that I essentially got my fuel bill in one monthly statement. What I didn’t do was buy the latest designer purse or dinner for myself and 20 friends because at the end of the month I knew that I would never be able to pay it off.
When you don’t manage to pay your card off–the credit company starts making money in the form of interest. They can charge you a percentage of what you owe and tack that amount on top of your balance for the next month. This is how you quickly get into a hole.
I am proud to say that your father and I have no credit card debt. We both have credit cards which we use occasionally. However it is usually a planned expense or a complete emergency (and not a hunger craving emergency). We do pay off our card EVERY month if we even have a balance. Until you have enough self control to spend your CASH responsibly you have no need for a credit card. Get a budget, live on cash, and then get yourself a credit card (having a credit history when you are a responsible card user can be in your favor). Pay off your card every month!! If you can’t pay off your card every month then get rid of it.
I do acknowledge that their are exceptions to every rule–however I thoroughly believe in this piece of advice when applied to a typical life scenario.
(This post is an elaboration on an article written by Regina Brett which can be read in here.)