Why Every Homeowner Needs a Credit Card

One critical aspect of owning a home is budgeting; credit cards and budgeting go hand in hand.  Credit cards allow you to manage cash flow by giving you 30 days to pay, and if they’re used correctly, they can be a considerable tool to maintain and increase your wealth. The ability to track every expense you incur is important for budgeting, and assists in the ability to breakdown exactly where your money is going on a monthly basis.   

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How to Budget Home Expenses

Using last month’s income as a benchmark, create a list of spending categories at the beginning of every month. For example, you may know an approximation on what your bills will cost each month – mortgage, homeowners insurance, etc. For the variable categories, you can make estimates; some of the biggest variable and ongoing expenses are in the grocery and miscellaneous categories.  This is when credit cards come in handy.

How to Use Credit Cards to Stay on Track

  • Start the beginning of each month with a set amount to spend on groceries and other miscellaneous expenses, then check in once or twice per week.  It’s important to check in to see where you are with your budget. You can usually access each of your credit card accounts online, making this part easily accessible.
  • While using a credit card, you don’t have to keep receipts for smaller purchases such as groceries or gas since all purchases can be accessed online.
  • Pay off your credit card 2-3 times per month. This is key to making credit cards work for you instead of against you. Since you start each month with a dollar figure for spending, paying off your bills helps you stay on budget and ensures that you won’t pay interest fees.
  • As the month progresses, keep an eye on your spending in all of your variable categories. When you run short on grocery funds the last week of the month, opt to eat food already in the pantry or use up extras in the freezer.

It’s important not to consider credit cards a free-for-all. Maintain your budget, stay within your limits, and watch your savings grow! 

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