Hi Money Minder,
So, here’s the deal – I’m trying to budget like a responsible adult by making sure all my monthly expenses, savings, and credit card payments are covered. But, here’s the catch – after all that, I’m left with around $600 that ends up going back to my credit card. It feels like I’m stuck in this endless loop of paying off last month’s expenses while racking up new charges on my cash rewards card.
Am I overspending, or am I overpaying? I don’t want to end up paying any interest, but I feel like I’m falling further behind with each paycheck. My theory is that if I allocate more towards my expenses, I’ll have less to contribute towards my revolving credit card balance.
What do you think? Any advice on how to break free from this cycle?
Cheers,
Savvy Saver
Response from THE MONEY MINDER:
Hello There,
It seems like you have a good grasp on budgeting and are working hard to manage your finances each month, which is commendable. However, it appears that you might be caught in a cycle of using your credit card to cover your expenses while also trying to pay off the previous month’s balance at the same time. This can create a challenging situation where you feel like you are not making progress despite your efforts.
One practical approach to break this cycle is to focus on paying off your credit card balance completely. While you are currently not paying interest, carrying over a balance each month can make it harder to catch up and move forward financially. By allocating more of your budget towards paying off your credit card debt, you can start fresh each month without accumulating additional balances.
It might be helpful to reassess your budget and see if there are any areas where you can cut back temporarily to allocate more funds towards paying off your credit card. Additionally, consider setting aside a specific amount each month to build up an emergency fund, so you are less likely to rely on your credit card for unexpected expenses in the future.
Remember, taking control of your finances is a journey, and small steps in the right direction can lead to significant progress over time. By prioritizing paying off your credit card debt and building a solid financial foundation, you can work towards achieving your financial goals. Best of luck with your financial journey from THE MONEY MINDER.
