how not to use credit card

How Not To Use Credit Cards

If you are in debt, can’t control your spending, your savings account is significantly smaller than your credit card statement, PLEASE CUT YOUR CREDIT CARD AND STOP USING IT! You might be asking, what about big purchases? Well, today, I will teach you How Not To Use Credit Cards

Hello Wealth Builders, 

Today, I will share with you the 7 Steps that I do so I can buy expensive things without using my credit card.

Quickly, the 7 Steps are   

  1. Plan Ahead 
  2. List all of Your Expenses and Add it Up
  3. Rank Your Expenses According to Life’s Necessity
  4. Figure Out How Much You Make
  5. Figure Out If You Are Broke or Rich
  6. Eliminate Some of Your Expenses
  7. Decide How Much You Need to Save

Affiliate Disclosure – I am an Affiliate of many products promoted on this website and may earn a commission if you purchase something.


How Not To Use Credit Cards – Even If You Need to Buy Expensive Things?

1. Plan Ahead

how-not-to-use-credit-cards Step 1 Plan Ahead

The first step to how not to use credit cards is planning ahead.

Planning ahead means listing the things you want to buy in the future. It doesn’t matter if these things are realistic or just wishful thinking. What matters is for you to identify these so you can set aside money.

Why Plan Ahead?

The first reason why you should plan ahead is so you will have money to pay for the things you wish to purchase without having to use your credit card. The second reason is it will help you improve your spending habits, meaning, it will discipline yourself to spend only on the things that really matter to you.

For example, 

Today is September and you want to buy a 65″ 4k UHD TV on Boxing Day, December 26.

If you plan for this purchase, then you will probably not going to buy unwanted things for the next 3 months. However, without a plan, you will most likely be going to indulge yourself with take-outs or random electronics/ make-up buys.

When December 26 comes, you will not have money saved to buy the TV so you will either cry on the corner for not getting the TV or you would swipe your credit card and risk going into debt. 

How to Plan Ahead?

Here are the steps that I recommend you to take: 

  1. List down the things you want to buy
  2. Write the price beside each item
  3. Indicate when you would like to buy them
  4. Determine how much you need to save per month

2. List all of your expenses and add it up

Now that you know what you will be saving for, your next step is to audit your finances, so you have a plan on how to save. This is a very important step because many people believe they can’t afford to buy the things that matter to them, but in reality, they are simply bleeding cash and they don’t know about it.

Here’s what you should do for this step:

how-not-to-use-credit-cards step 2 List all of your expenses and add it up
Example Spreadsheet of Personal Expenses
  1. Open an Excel File
  2. Create 3 columns
  3. Label the first column as “Expenses”, the second column as “Amount”, and the last column “Frequency”.
  4. Go to your bank account statement or credit card statement to see all of your expenses
  5. List your expenses on the 1st column
  6. Find the total amount you spend on each expense per month on the 2nd column
  7. State how frequent you spend on each expense per month on the 3rd column. It could be monthly, weekly, 2x, 3x, etc. or irregular
  8. Get the sum of your expenses

3. Rank your expenses according to life’s necessity

You need to acknowledge that not all of your expenses are essential and if you will be honest to yourself, most of your expenses are actually just discretionary spending.

This step is important because it will help you identify which expense you need to give up so you can save or to help you reduce or pay off your debt.

This step is pretty simple and straight forward.

Go back to step two (your expense list) and rank your expenses according to how essential the spending is.

Step 3 Rank your expenses according to life's necessity
In this budget template, I placed groceries, rent, gas, etc. on top because I need these to maintain a certain degree of quality of life. Self-development comes second because investing in yourself is the best investment you can do. Finally eating out and others are at the bottom because I can live without those.

Note: Although clothes are considered essential expenses, I still put it on the bottom because I know I skip buying it if I don’t have to.

Essential expense is a type of expense that you have to pay in order to maintain a degree of standard of living while discretionary expense is a type of expense where you can get away without.

Essential expenses include clothes, food, and water, shelter and education. Yup, that’s it. Expenses related to these should be on top of your list.

Discretionary expenses include VIP phone and internet plans, eating out, make-ups or video game costs, etc.

Note: Essential expenses may become discretionary expenses when you spend on it more than you need to.

For example,

Food is an essential expense but it becomes discretionary spending if you are buying too much junk food or desserts!

Similarly, buying clothes is essential but if you are spending about $200 + a month on clothes then you have a spending problem!

If this step is still a bit confusing to you, be sure to let me know down in the comment section and I will be happy to answer your questions.


4. Figure out how much you make

After you determine what are your expenses, how much per month you are spending for each expense, and rank them according to life’s necessity, your next step is to figure out how much you make.

This is an important step to “How Not To Use Credit Cards” because you want to know if you are spending more than you earn or if you are making your extra dollars that need to work.

To do this step, all you need to do is to check your payslip to see how much you are making per month.

Step 4 Figure out how much you make

5. Figure out if you are broke or rich

In this step, you will determine how much money you have left after paying all of your expenses.

Doing this step will enable you to determine if you are in debt or if you have cash left at the end of the month.

To do this step, all you need to do is subtract your total expense from your total income in a month.

Step 5 Figure out if you are broke or rich

6. Eliminate some of your expenses

Hopefully, you learned that you are rich after doing step 6. If you are, then go to step 7 but feel free to do this step because it will help you save more cash.

Now if you are broke, the simple solution to eliminate some of your expenses.

Remember you ranked your expenses in step 3?

Now, you just need to commit not to spend money on the expenses at the bottom of your list.

Step 6 Eliminate some of your expenses
In order to save, I would try to minimize my expenses on the “eat out” and “others” section. Doing so could easily help me keep about $500 – $800 a month.

After committing to eliminating some of your expenses, do step 5 again but this time subtract your “planned” total expenses from your total income. Hopefully, you will have the extra money in your pocket this time.


7. Decide how much you need to save

Guess what?!

Because you did steps 2 to 5, you now have a working budget!

Horray for you!

Now, its time for you to figure out how to save money so you can pay for expensive things without using a credit card.

Before I proceed, let me congratulate you because you are now 1 step to fully knowing How Not To Use Credit Cards!

For this step, you will need to know how much is the item you want to buy and when you want to buy the item so you would know how much per month you need to save. Hopefully, you got this ready in step one.

Now, look at your budget and determine if you have extra money that you can set aside so you can save for the big item you wish to buy.

If you have enough, then congrats! Maintain your budget until you save enough for the item you wish to buy. If you don’t, then just go back to step 6 and adjust your spending until you can work out the amount you need to save per month.

Here’s an example,

If you have a desire to get married, then know the average cost of a wedding is around $30000.

If you are an in you are in your 20’s and planning to get married around 30 then you have 10 years to save up.

That means you need to save $250/month for 10 years. That is $30000/ (12 months*10 years).

Now go to your budget and see if your net income is greater than or equal to $250. If not, then reduce your spending.


How Not To Use Credit Cards When Income is Not Enough

If you did everything to reduce your expenses, yet your income is still not enough, then maybe the only solution left is to increase your income.

There are many ways to increase your income some of which are the following:

  1. Ask for raise or ask how to get promoted
  2. Do part-time job
  3. Create a side-business
What side-business to do?

Sadly, there are a lot of scams on the internet that promises you quick income. However, this should not stop you from exploring online business because there is actually a lot of online business models that are potentially profitable when done properly.

One of the most popular ways to make money online is to create a blog or vlog and promote affiliate products.

Interested but don’t know how to start?

I recommend that you check out Wealthy Affiliate.

I personally use Wealthy Affiliate and the result is this blog. Some of the things that I like about Wealthy Affiliate are the following:

  • step-by-step affiliate marketing training
  • a very helpful community of affiliate marketers
  • access to a personal coach
  • all-in-one blog services provider

Questions and Feedbacks

Well, I hope this article taught you a lot about How Not to Use Credit Cards. If you have any questions or feedback, feel free to share it in the comment section below.

No questions and feedback? Let me ask you some!

  1. Do you believe you can buy expensive things without using your credit card? Why or Why Not?
  2. What do you think is the hardest step about How Not To Use Credit Card?
  3. Are you willing to give up your discretionary expenses so you can buy things that matter?

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