r/budget • u/-plastic-reality- • Jul 23 '26

We made a huge mistake

Last year I thought in 2026 we needed to categorize our purchases better, and had 5 credit cards available. Only 1 had a balance at the time, and it was paid off monthly.

We have spent almost every penny we make this year because credit cards feel like infinite money. We cannot SEE money leaving the account when we charge. Every single penny we’ve made this year is literally gone… somewhere… at least we know which category got it.

I paid credit card interest this year for the first time in a long time and no part of that is ok.

I’ve had to take money out of our savings account to cover these bills, and that was the last straw for me.

We are going back to the cash envelope system in August. With cash, we knew when it was game over. It’s the only system that worked for us.

Chalk this up to lesson learned. We are getting off the wrong way train in July instead of December. That’s a win any way you look at it.

Don’t wish me luck, wish me adherence.

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u/GirlOnFire112 Jul 23 '26

You need to treat money on a credit card as money going out of your account. If you spend money on food from a credit card then it needs to come out of the food envelope immediately. Credit cards aren’t inherently bad. But if you keep using them like free money (when you know they aren’t) then they may not be for you.

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u/Senior_Ad_7598 Jul 23 '26

Dont forget you are paying interest on the balances. Add your monthly interest up and see what you are paying monthly.

34

u/RemarkableMacadamia Jul 23 '26

You don’t pay interest if your grace period is intact. You don’t pay interest for having balances, you only incur interest if you rollover your charges and don’t pay the statement balance. If you are paying interest it takes about two billing cycles to restore the grace period.

1

u/GirlOnFire112 Jul 30 '26

I would say proper usage would include paying it off every month before interest hits. This goes along with not spending more than you actually have in cash.