Being Wise in the Credit Crunch

This is a guest article written by JD Withrow

We're all feeling the crunch these days. A little less in the wallet at the end of the week, a shrinking bank balance, and that knotted feeling in the pit of your stomach when you think about the future. There is a rather long laundry list of ways to tighten your belt, tips to curb your bad spending habits and the ever popular advice to cut out the little luxuries that you use to enjoy. No more seven dollar latte every morning, the tips tell you to brew your own and to pack a lunch while you're at it rather than sushi from the place around the corner.

They're right, you know. These are excellent suggestions. However, most lists and tips and tricks to save you money usually forget the most important piece of advice, and that is to live within your means. How can you possibly hope to stay afloat in tough times when you are digging yourself deeper into a pit of debt each and every month? The truthful answer is this; you can't.

Between loans, credit cards, in-store financing and an abundance of "no down payment, no interest until...." offers on the table, it's easy to over spend. You look at the minimum payment due and think "I can swing that!" Do that a couple of times and suddenly you have a whole bunch of little payments going out every month that add up to a pretty hefty sum, and once that no interest period is over, that debt will grow with astonishing speed.

Budgeting is obviously important, but again, if you don't stick to it, it's useless.

There is a simple solution to busting the budget and overspending and its prepaid debit cards or prepaid credit cards. You are afforded all of the safety and convenience of a credit card but without putting yourself into debt. You load a balance of your choice on the card and use it like you would any other credit card. Because you're not actually borrowing the money, there are no financing charges. Yes, you heard me correctly; prepaid credit cards charge no interest. You set the limit and when it's gone, you can't over spend as there is no overdraft option. If you budget your allowable monthly spending and load only that amount each month, you'll keep your finances under control and that is how you can be wise in the credit crunch

This is a guest article by JD Withrow, who enjoy doing freelance writing on personal finance.

Picture: alancleaver_2000

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