Monty Loree: So does that mean that you must have a bit of emergency fund or some cash at the bank in order to make the payments every month?
Nick Farina: I'm really careful about what I spend. I do get some part time work and summer work and I have a few writing jobs now that I used to bring in income. But the bottom line is really budgeting. It doesn't matter what you make unless you're making poverty line, but I have seen people make a million dollars a year. I've heard stories that you can easily go through a million dollars a year. Similarly, you can make $20,000.00 a year and you can pay your bills on time with it. It really matters to have a budgeting plan.
That's something young people don't understand really, because they often attribute it to – I'm spending too much money because I don't make enough money now. The fact is if you take the time to look at your expense, to look at what you value and really want to do and you cut out the fat and maybe make some hard choices, then you're going to be fine. You'll have enough money to pay your bills and setting up that budget is a really important thing that has flown over the years of a lot of young people these days.
Monty Loree: Exactly. I just want to interject here again and say that I'm talking with Nick Farina who's the author and publisher of moneyinenglish.com which is a Chicago-based blog that talks to young people about their personal finance. So far we've got a really good discussion. So just to continue, I guess the point I'd like to make is, and from my perspective, what I'd like to get out to people is if I had my choice – is that they shouldn't treat credit cards like a source of income. They should treat them like a tool. What I mean by that is if you don't have the money in the bank to cover the bill every month, to cover your payments in full every month, don't use the credit card. Don't think that you're going to make monthly payments and the world is going to be happier. From my perspective is, if you've got a credit card, make sure if you spend $200.00 in a month make sure you've got $200.00 cash in the bank to pay it off at the end of every month. That would make your life a lot easier. Can you talk about that a little bit?
See previous part with Nick Farina - Part 6
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