Tag: credit-cards

Do you spend more on vacations than most?

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Do most Americans take vacation each year? Not just take vacation days from work, but an actual vacation.  Seems like it’s important to most people.  I get that, life these days is demanding and fast paced. Work stress is higher than it’s ever been and the cost of some of our necessities, like insurance, food and taxes has certainly gone up.  Yet a vacation is something most people put on their must have list.

According to Forbes. 40% of Americans plan to travel in 2024. 40% of Americans Plan to Travel More In 2024 Vs. 2023 – Forbes Advisor. The younger generation will travel more than others.  Is that a good thing? Probably… It’s a catch 22. Travel more when your young and healthy. Or older when it might not be as easy to travel? Maybe it’s something we just need to balance better. Balance as in the time and the cost. Real vacations build memories, and great experiences. It’s a way to spend time with family or friends and experience new things, or just unplug and relax with no schedule.

The average American will spend about $4.000 in 2024 on vacations. Maybe that’s one trip or two small trips. But its important to take some time away from the day to day grind and get away.

Maybe you drive to your destination vs fly, whatever works for you….

So where do we get the money for a vacation?  Maybe we plan ahead and squirrel some money into the savings account over a few months to get a chunk of the money set aside BEFORE you book the trip. The scary part is IF you put it all on a credit card and you do not ALLREADY have the money to pay that card off ASAP.  Booking a vacation usually requires you to pay with a credit card and that starts to add up quickly! It’s like doing all your Christmas shopping with a credit card. Then you wake up when you get home from that trip stressed, when you see your statement!  According to JD Powell, 51% of Americans carry a credit card balance. Survey: Many Americans aren’t paying their credit cards in full (yahoo.com)

So, while a vacation is well needed by most and let’s face it life is short, so lets do fun things and work that into our lives!  We also need to work it into our budgets. So, we make some cuts here and there or pick up extra hours with a side hustle, or something. Let’s find some extra coin in the budget to do fun things! But let’s book it when we know we have the cash to pay for it with no regrets!

Credit cards, the good, the bad, & the ugly…

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Credit cards are like potato chips… It is hard to stop using them. Its even worse now a days with so much online fraud. It’s hard to get money back, due to fraud when you use a debit card vs credit card.  Since Covid more places do not take cash, everything must be on a credit card. The credit card companies want to give you points and cash back and all these “magical” things to make us feel like they really care about us! Come on, they are just large banks taking advantage of us!

Credit cards feel like poison to me sometimes. Unless you are a high earner, most people have credit card debt. According to Credit Donkey they found a statistic stating the Federal Reserve reported only 42% of households can pay their credit card bills in full each month. 23 Sobering Credit Card Debt Statistics (creditdonkey.com) Of the remaining 58% with credit card balances, most are paying more than the minimum, but the other half is only paying the minimum. The percentage of people with $1,000 or less on credit cards is at 15%. According to an article by Forbes magazine, Transunion reported at the end of 2023 the average credit card debt per consumer is just over $6.000! Average Credit Card Debt Study 2023 – Forbes Advisor If that’s per consumer its not unrealistic to think the average household could have more. These are scary stats and most of us have been or are still part of these stats. Its crazy how these little plastic cards can rack up debt so fast!

So how do we change this? I think the only way we can is to really understand our own habits and behaviors. The points game, ya, I personally can’t get sucked in to this. I feel like if I am not putting $5,000+ a month on a card I am not really getting anything for points. I cannot sleep knowing I have $5,000 on a credit card! You know I am not taking $5,000 out of my saving in one swoop to pay that bill! That also feels scary, even if I had the coin to do it! NOPE, both actions give me anxiety. Much easier to only use the card for certain things and set a comfortable limit for myself each month and do everything in my power to stay at that number if not under it. It’s hard! I have to work on my mental toughness EVERY month! It does make me more “mindful” of my purchases. Do I really need this?

How is this going to make me feel in a week, when I am facing this bill? I get we cannot just, NOT enjoy life and its little pleasures, but I do mentally weigh the reward of “the purchase”. I need things like gas in the car, and I usually need the credit card for that, but not for a coffee or lunch… I try to use more cash for those purchases. For some reason, mentally it’s harder to part with cash. Check out this article from Tally on the psychology of cash over credit. In some cases, people would spend 2-3 times the amount for the same product!   The Mindset of Using Cash vs. Credit — Tally (meettally.com) I know it’s very hard these days to NOT use a credit card, it’s like not having a smart phone. But maybe we need to look at our account balance every week or two to stay on top of the snowball effect. I also find sending extra cash say once a week, might not make the bill at the end of month so scary, so I don’t break out in a cold sweat paying the balance. Bottom line we all have to find ways to keep the balance in check. Maybe the first step if you cannot pay the balance in full each month is to be in that 15% of people with $1,000 or less? I would say that should be per household. That sounds more manageable to start, Agree? Then work from there. Don’t get lost in the points and the rewards and all that bull, if you are like most and carry a large balance. Remember the credit card companies are charging you on average 20%, they are not really giving you any deals here.  Getting in a good spot with credit card dept is VERY hard. Stick with it, dig in and face it. If you have more than one credit card, use the snowball effect method. Check out our FREE downloads on how this works. You are not alone; this is a major stressor for most of us. But you can do this! Stay focused and create new habits when it comes to credit cards! Talk to a friend about it, they may be in the same situation, and you can do this together! Nothing to be ashamed about, and it will be something to be proud of once on the other side! You/we got this!!!!