Do it On a Dime Blog

Do it on a Dime Blog

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Time for a little transparency and honesty.

 

As you would know if you read my blog often I have a fairly low-income. I live very frugally, partly because I am naturally frugal and mostly because I don’t really have a choice. I don’t choose to share my income and exact numbers with you because it’s not the point of my blog. It’s not about the numbers but about the actions and feelings and thoughts that drive the decisions that we make.

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Let’s Talk About Credit Cards

Let’s talk about credit cards! Let’s talk about the pros and cons of credit cards and how I personally feel about credit cards.

 

Credit Cards Pros and Cons

 

Credit cards are a very tricky topic because they are such a dangerous tool. They are dangerous but they are also a tool. There are pros and cons to credit cards.

credit cards pros and cons

My thoughts on credit cards have evolved slightly especially recently and I will explain why.

Credit cards are basically a quick loan. You can borrow money, from a creditor at a very high interest rate for anything you want. Anything you need to buy, you can borrow the money for. You don’t need to justify to anyone your purchase or even prove that you can eventually pay it back.

Credit cards are so quick and easy- it’s extremely easy to forget that you are even spending money. Many, many people spend too much on credit cards- buying things that they don’t need with money they don’t have. This can, and does, easily spiral into people owing huge amounts of money with little or no assets to show for it. At least when you borrow a million dollars for a house than you have the house at the end of it! With credit cards, you can spend tons of money on nothing and have nothing to show for it except for mountains of debt.

 

Terrible, right?

 

Well…. sort of. Borrowing money on a credit card is a pretty bad idea. Borrowing money on the credit card to buy stupid stuff is stupid. That doesn’t mean that you can’t ever use a credit card. Using a credit card to buy things you need and can afford? That may be a good idea.

 

Credit cards are a great tool to help you take control of your finances and to help keep your finances simple (simple is the name of the game over here)

 

Here are some great perks of credit cards:

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giving charity

Guide to Giving Charity

Guide to Giving Charity

How to make charitable giving a part of your budget

I talk so much about saving and investing.  We all do. It is one of the core tenants of personal finance. Save more than you spend. Save for retirement. Your savings rate (how much money you save a month) is obviously a key indicator of financial wellness.

Money is a tool to be used to better your lives and the lives of the people around you. That means that you do have a moral obligation to help people who are less fortunate than you. This involves giving charity, as much as you can.

giving charity

Giving 10% of your income to charity

As a Jew, I subscribe to this pretty strongly. There is a Torah commandment to set aside 10% of your income for charity. This, unlike the Christian tithing, is not necessarily meant to go to the synagogue (although you can if you want) but rather to charity- to those less fortunate than you.

Giving 10% of your income (Maaser) has always been a key part of my budget. This is not really negotiable. Even when we were making very, very little money this was always set aside.

My parents were not particularly good with money but they always gave Maaser. I was always instructed to keep track of how much money I made babysitting and other odd jobs so I could give 10% of it to charity. Of course, sometimes that meant I was giving a few cents to charity!

The amount of money that you give doesn’t really matter. It’s the percentage that counts (at least according to Jewish law).

Charitable Giving Account

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