Never buy anything you can't pay for, at the time, except a house.
By Linda K. Iverson
Editor's Note: It's a simple tip, but a good one. Also a very tough tip to follow with credit cards given out so freely. They make it really easy to charge things you can't afford but you save a lot of money when you buy things outright and don't have pay interest on the debt. We were unable to afford our new server outright, so it is sitting on a credit card. One thing we will do is pay it off aggresively to limit the amount of interest we have to pay. So if you have to buy something on time or on a credit card, pay it off agressively.
Credit card companies are great at making money and they set up their minimum payments to maximise how much they make on your debt. So pay more whenever possible and you will have more money in your pocket down the road. I will post a fallow up when we finally pay off our server and let you know how much charging it added to the total cost of the purchase. Hopefully we can practice what we preach and limit the amount of interest we end up paying.
I use the "envelope method" for all our bills. We too had to pay for Internet upfront, but then I took the amount of the service divided by how many paychecks for a year (when it was due next) and put that amount into the envelope. When the bill comes due next year, the money is there and can be paid, without having to use a credit card. This works for everything - utilities, car insurance, etc.
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