For persons desirous of changing bad habits and moving towards the black in budgeting, here are some guidelines from Joan Edwards, financial adviser at Jamaica Money Market Brokers.

1. Do a budget.

This is an important first step and the only way you can know for sure how much you are spending and to determine if you are exceeding the amount of credit you can pay off in one month. You do this by writing everything down and comparing it to your income and expenditure plan.

The moment you begin to spend more than you can pay off in full in one month, then you have started to create debt for yourself.

2. Pay off your credit card in full each month.

If you are unable to make payments in full, then ensure you make at least the minimum payment.

3. Cap your credit card spending at the amount you can afford to pay off in one month.

4. If you find that you are not able to control your spending, then pay off credit card and destroy the card.

You can still pay for your monthly expenses without the card and without incurring debt. Or, request that your credit limit be reduced to an amount that you know you can pay off in full each month.

5. Say no to your bank. From time to time banks will increase your credit limit, especially if you manage your credit card well. You do not have to accept this increased limit. Invariably, you end up spending more just by have your limit increased.

MISTAKES TO AVOID

Avoid using the credit card for luxury items such as shopping online, dining out, and clothing sales. Invariably, when you review your spending patterns you will recognise that many of these purchases could have been delayed or avoided.

Avoid impulse spending or spending based on your mood. Some people shop or eat out when they are depressed. These are not effective money management traits and should be curtailed.

When applying for your credit card do not accept a credit limit for more than what you can afford to pay off in one month.

Email Joan at: joan_edwards@jamb.com.