The famous “to be or not to be” question seemingly can't compare to another inquiry, at least to those who struggle mightily with budgeting, debt, bad credit and not nearly enough income to cover their expenses. “Cash or credit?” Most financially savvy individuals or those who don't have any issues with drafting and adhering to a budget argue that, while credit can be good, cash will always be king in their eyes. Cash represents truthfully money that isn't borrowed but rather yours to spend as you see fit. There's never debt associated with spending cash; it is your money, not that of a credit card company, lender or even an overly kind and generous friend. Where the majority of spenders get in trouble is relying on a credit card for convenience purposes or, quite frankly, if they don't have enough cash to get the items they need or want. The latter mentality is a whole lot of bad decision making and a process that is clearly broken. If you don't have enough income to pay for that shopping spree, cable television or eating dinner out at a restaurant three or four nights a week, that shouldn't be a problem that can be soothed with a credit card or borrowing money. That is a budget concern, which can be rectified by cutting back on expenses that aren't necessary. For items like utilities, food, clothing, rent and other tangible loans, those come directly out of your cash reserve (i.e. income). Using credit cards or borrowing money to pay day to day living expenses means you've gone past just reworking your budget or tinkering with a numbers here and there, but rather translates into needing credit consolidation or financial counseling. Cash also is meant for the incidental items you buy on a regular basis, things like coffee, tea, snacks, cigarettes or even grocery store trips (be it large ones for an entire week or just a few weekly items you need to restock). Steering clear of credit should be goal number one, unless you have a major repair that can't be put off or perhaps a fussy appliance that isn't working and you can't literally live without (think home heating and air conditioning not so much that dishwasher). You also should never use credit cards as it relates to down payments on cars and especially homes. In fact, if you're buying a home, lay off the credit cards in full; the underwriter on that loan might get a glimpse at your idiotic furniture purchase of $5,000 and decide you're more trouble than you're worth. Using credit cards for miles, promotional points and other perks is fine, but as long as the balance is the kind that is controllable or, in a perfect world, can be paid off within 30 days. Debt and managing it is a lot like weight loss and overeating to a degree. When you're hungry, ask yourself if you want an apple. If you say “no,” you aren't hungry but maybe just bored. If the answer is “yes,” chances are you're actually starving as you proclaim. Same goes for money. Ask yourself as you're about to buying something if you had cash in hand right now, instead of that credit card, would you be willing to part with it for this particular product or service. If you can't answer “yes,” then putting down the credit card is a move you'll not soon forget.
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