As someone who’s self-employed, I’ve found it very difficult to stick to a regular budget while having inconsistent income. My solution? Use a personal credit card for all household bills and daily purchases, then pay the balance off every week.
After many years of trying (and failing) to stick to a budget plan, this strategy of using credit cards has finally helped my husband and I stick to a budget. There are actually quite a few advantages to this method, such as:
- Not having to balance multiple checking accounts
- Easily tracking your spending versus budgeting every single penny
- Simplified bookkeeping strategy for couples
- More cash flow in your bank account
- Less confusion about expenses or purchase disputes
- Getting credit card rewards for everyday purchases
If you’ve been struggling to stick to a good spending plan, here’s how to use a credit card to create a budget that actually works.
Start paying all personal bills with one credit card
Choose one personal credit card that both you and your partner can easily access and ensure that it offers cash back rewards on purchases you make the most.
Make a list of all your household bills, including utilities, internet, and cell phone, and log into those accounts online to update the payment method. This will help alleviate some cash flow in your bank account while still being able to manage your finances all in one place.
Use the same credit card for daily purchases
Using the same credit card account, start swiping it for all your daily purchases. In addition to your household bills, use this card for groceries, gas, coffee shops, and other places you frequent.
Nearly every purchase you make should be charged to this new credit card. Consolidating all of your bills and purchases onto one card will help you track every expense you and your partner make.
When two people are trying to manage one bank account, it makes it much more difficult since you can’t always communicate in real time before making a purchase. However, with a credit card you’re able to review the transactions every week.
If something doesn’t look quite right after the purchase is complete, you can request a refund or dispute a charge if needed, without ever losing money in your bank account.
Review the transactions weekly
As someone with an irregular income, I find it much simpler to review my credit card transactions on a weekly basis.
I do this every Monday morning before I start my regular work week, then schedule that week’s payment to cover all of last week’s expenses. This helps keep my credit card balance low and manageable, so I don’t risk going into debt.
You may find it more beneficial to make a payment every other week. Do what works best for you and your finances, but it’s still advisable to review the purchases each week so you don’t miss any disputes or double charges.
Set a regular spending limit
Much like a traditional budget, the key to staying in control of credit card spending is setting a monthly spending limit. If you’re not used to budgeting at all, it may take a few months to get into a good habit of setting a spending limit and sticking to it.
Depending on the financial software you use to manage your budget, you can set alerts to warn you if you’re approaching your spending limit. If you prefer getting results in real-time, use a money management app so you can pull up your budget information on the go.
Pay off the balance frequently
It’s key to check in with your budget on a weekly basis so you can adjust your spending throughout the month. Otherwise, you risk overspending and racking up credit card debt, which can be a dangerous thing for your finances.
As you’re checking in with your budget and verifying all expenses on a weekly basis, go ahead and schedule a payment to pay off the balance. Simply add up all of the purchases you’ve made since the last statement and make a payment from your checking account.
Cash in rewards or points earned
Obviously, one of the main benefits to using a credit card to finally stay on budget is that you’ll receive rewards and cashback for all your purchases.
You’d be surprised how much you spend every week, and those rewards can add up pretty quickly. Depending on what type of credit card you use, you could earn several hundreds of dollars in cash back or statement credits for things you purchase every day.
In fact, my husband and I earn about $25 back every single month for charges made to our credit card for household bills, groceries, and other lifestyle needs. That adds up to between $300 cash back per year for us.
If you’re in a place where you are financially ready to use credit cards, using one could finally help you stay on budget. When done right, a credit card can be a smart financial tool for budgeting.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for SoFi.
2 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.50% APR (with Auto Pay) to 7.27% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of April 17, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 04/17/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.49% effective March 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.50% – 7.27%1||Undergrad & Graduate|
|2.50% – 7.12%3||Undergrad & Graduate|
|2.81% – 8.79%4||Undergrad & Graduate|
|2.50% – 6.65%2||Undergrad & Graduate|
|2.55% – 7.12%5||Undergrad & Graduate|
|3.00% – 9.74%6||Undergrad & Graduate|