Credit cards are evil! They can easily kill a budget – i.e. putting your minimum payment as a line-item in your budget instead of the entire balance! But that’s a topic for another day. Today’s topic is you – borrowing from you, more specifically. This can take many forms. But let’s briefly mention the one that seems to derail budgets most often and why I think it’s not a good idea.
This one is simple: You’re not a credit card company. You’re not a bank. Do not borrow from next month (or next year) for something you’re buying or doing now.
The whole point is not to borrow to buy or do “stuff.” It is to save to buy or do “stuff.” Yes – this means not doing much for a little while so you can catch up. You’ll have to (a) “catch up” to your spending, (b) save up to spend and, only then can you, (c) buy or do “stuff.” So instead of booking a vacation in two months for $1,000 and then allocating $100 per month for 10 months, it means waiting – budgeting $100 per month for 10 months and THEN booking the vacation. It’s much more enjoyable like that anyhow and better practice. This way you don’t end up looking at the budget 8 months from now and seeing a bunch of line items for “stuff” you bought or did months ago and nothing left to do spend that month.
Why is that a big deal? Because it snowballs! And you could end up using credit cards in those later months to either keep up a lifestyle or just pay for necessities.
So don’t borrow from later months. Save up and don’t do or buy stuff you don’t need until you have the money. Your budget will thank you.
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