You know that I am always on the look out to help save your hard earned money. Well here is some info I received from one of my lenders: ” a recent study showed that on average, people who use credit cards spend a third more than people who don’t.”
So if you spent a third less, it would be like getting a 33% raise. And I don’t know about you, but if I got a 33% raise, I would be ALL IN, in fact I am all in! Let me explain.
We have been victims of our own demise when it comes to this credit card thing. We have been using credit cards even when we didn’t need to and got in pretty deep. As you know, I am very transparent on these things, as I want to help you as well, I have to tell you the truth 🙂 So, we have been pretty close to maxed out on our 4 credit cards and paying about $600 per month in INTEREST CHARGES alone!!!! That is just disgusting, ridiculous, and outrageous!!! While preparing ourselves for the tax season and going through all of our expenses, we discovered how much money we were throwing out the window, on average, we were paying 22% in interest charges on these cards!!! This is aside from the fact, that as it states above, we are probably spending more than we should since we are using credit cards, and this is why….
“The study went on to say that the reason credit card users spend more money is because when they pay by credit card, it doesn’t feel like real money.” I thought about that statement for a bit and discovered it applies to me too; somehow it doesn’t feel like real money when I use my credit card, the pain isn’t as real, at least not until I see the statement and the crazy high interest fees.
So we have decided to pay off almost all of the balances, as much as we could pay off and we are on our way to reverse this crazy outrageous cycle. Now, I understand not everyone will have the funds to do this right away, for us it was just good timing as we just wrapped up our first flip project (see previous blog posts) and used some of profit from that to pay these down (arguably not necessarily the best option, as there were other possibly better options, but we will discuss those later or call me/comment below if you are curious what those might be).
So our goal is to not use any more credit cards, except one, to earn the miles it offers. BUT, even this strategy can get you right back into trouble, so we agreed to try it for 1 month, and if we can pay back every charge we put on it IMMEDIATELY! then we will continue to use it, otherwise we are going to a cash based lifestyle (not actual physical cash, but debit cards 🙂
So I have a simple challenge for you… I say “simple” because the “real” challenge would be that you follow Dave Ramsey’s advice “start paying all your credit cards off, starting with the smallest balance first and move on from there, cut up all your cards, NEVER use them again, and watch your savings grow, and then start buying rental properties with those savings, etc…” but I know that is not an easy task, therefore, I will leave that for another day or leave it up to your request, whenever you are ready, I will be happy to help with that as well (this is VERY IMPORTANT … if you decide to go that route, DO NOT CLOSE your credit cards because it could impact your credit in a negative way, CALL ME or your lender and ask for help before you do anything like that)
So the simple challenge for you, if you accept:
Let’s try for 1 whole week not to use a single credit card. I know you may think, ‘there is no way I could do that’. But my response to you is, if your boss told you that you would get a 33% raise if you didn’t use your credit card for a week, would you do it? Just a simple idea, let’s just try it for one single week.
Speaking of saving 33%, my lender also told me that he met with one of our clients for their yearly mortgage review and was able to lower their total monthly payments by $153. Now that may not seem like much, but get this, they structured the deal so they will have their home paid off 12 years early! This will save them an additional $97,456 dollars in wasted interest payments. In turn, they will be able to retire about 4-5 years sooner than originally planned. So my question for you today is this – what would you do with $97,456?
If you want to find out more or to see if this would work for you, CALL ME or your lender to set up your mortgage review soon and we can see how this strategy could apply to you. Don’t forget to ask about no closing cost loan programs that can be applied to either purchases or refinances.
So this week I have two challenges for you. First, take my challenge to save you 33% of your income by using cash instead of credit cards for 1 week. Second, let’s see if the strategy to lower your monthly mortgage payment AND pay off your house sooner could work for you.
AND AS ALWASY your referrals mean the world to me, so if you know anyone who is looking to buy or sell a home this year, I will be honored to help them 🙂
I’m looking forward to talking with you soon!
Have an amazing rest of the week!
Your FULL TIME Realtor and Friend
602-516-5360 Always Open 🙂