Living within your means is more than just a worthy goal; it’s a norm we should all strive to achieve. And yes, we know the price of everything keeps getting higher, even as wages have been stagnant for many years now.

We are also well aware this has pushed far too many people to turn to credit cards, only to find themselves mired in seemingly unending debt. However, credit cards may also be how you can get your situation back in hand.

Here’s how using credit card consolidation can help you live within your means.

What Is Credit Card Consolidation?

Simply put, it’s opening another credit account to encompass all of your outstanding consumer debt into one account. While it might seem counterintuitive to take on more debt to eradicate debt, the reasoning for doing so is quite sound.

That is, assuming you do it carefully and strategically.

You want to make sure the new debt you take on has a lower interest rate than the debt you’re replacing and you want to make sure the monthly payment on that debt can be lower than the total you’re paying now, while still helping you eradicate the new debt in a timely fashion.

Once you’ve accomplished this, the next thing you need to do is make sure you don’t go back and run up the balances on the old accounts. Otherwise, you’ll just dig your hole deeper.

Create an Emergency Fund

Once you’ve done credit card consolidation, staying away from those freed-up charge cards is essential to the success of your plan. The first thing you’ll need to do is build up an emergency fund. Most experts recommend saving between three and six months of living expenses to carry you if your income stream is interrupted.

However, this stash of cash can also come in handy to offset unexpected large expenses, so you won’t have to resort to credit to manage them. Done properly, the consolidation should have freed up some cash previously used to pay credit card bills. A portion of this money can be saved to create the fund.

Develop a Spending Plan

To determine how much you can afford to put away each month for your emergency fund and retirement, you’ll need to take a good look at what you have coming in each month and what you have going out.

Make a list of all of your monthly expenses and bills, total it and compare it to your income. You’ll need to find ways to cut back or earn more if it’s more than 85 percent of your income.

Maybe you could be just as comfortable in a smaller home and driving a pre-owned car. Eating out less frequently, reviewing subscriptions of all types, eliminating outsized cable packages and closing unused memberships are also great starts toward this end.

Ignore the Joneses

Comparing yourself to your neighbors and coworkers is a surefire way to spend more than you earn. There is always going to be someone in your circle who either earns more than you do, or is willing to spend more to look like they do.

If you get caught up in competing with those people, you’re going to have a very difficult time eliminating your debt. Don’t care what they say, mind your own business and live your life your way. You’ll sleep better and you’ll enjoy living a lot more.

Using credit card consolidation to help you live within your means is a great way to take control of your life back from credit card issuers. However, you must be careful to avoid slipping back into the old habits that indebted you in the first place.

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