TEMPLE, Texas — The numbers are in and Americans are starting to spend more on credit as the economy worsens and every day costs like food and gas continue to rise.
The Federal Reserve reported Tuesday that spending on credit cards rose $351 billion in the third quarter, meaning total debt jumped by that amount for the July-to-September period.
So how can you save because ignorance will keep you broke?
Financial advisor Rolandus Johnson reminds us to mind your budget. You've got to know how much you are truly earning and how much you are honestly spending.
“My first deal is find out what works for you, but secondly stay disciplined with that," Johnson said. "I know that the one thing that I harp on is you've got to constantly be reviewing your budget and make sure that you know exactly what's going in and what's going out."
Remember, once your bills are paid, you need to have a plan for your discretionary cash. That includes long and short-term goals, he said.
"If you’re pretty consistent with that and remain disciplined, whether it's a trip six months down the road or we're going to move money to the savings account ... multiple accounts aren't necessarily a bad thing because then you can save for the little things that you want," he said.
So how can you organize your money? Johnson says there are many apps that can help you stay on top of things, including the "envelope method."
"If you're not a big banking person, the envelope method is a great method," he said. "Write the name on the envelope and how much you want to save and constantly put money in it."
And just a friendly reminder about swiping the plastic: Studies show that when you pay for everything in cash, you actually spend 18 percent less.
"It's more of a psychological thing, where you're handing someone $100 and it stings a little bit more because you are actually seeing it go away versus swiping the credit card or the debit card and it's just zeroes and ones just transmitting in the background," he said. "I know for me, I keep very little cash on me so I know for me, I probably wouldn't spend a dime."
As of October of this year, roughly 4-in-10 Americans (41%) say none of their purchases in a typical week are paid for using cash, up from 29% in 2018 and 24% in 2015.