Herman Ye

I'm a big fan of credit cards, they're my go-to way to pay. When used correctly, you can reap rewards at no cost at all. Credit card companies are smart though, they're not in the business of free lunches. They know how to make money and lots of it. They make  billions  every year. Interest is the big money maker, accounting for 40% of earnings. Interest is applied whenever someone carries a balance. When your payment comes due, you have two options. You can either pay off your balance in full or pay the minimum. The minimum payment is enticing because it can be much smaller. It's a trap! Don't fall for it. Smart credit card users never just pay the minimum. They pay the balance in full so interest is never owed. How the Minimum Payment is Calculated The minimum payment is typically the greater of: 1% of your balance or a set minimum amount, such as $10  If your balance is lower than the set minimum, then your minimum payment would simply be t...

We humans are notorious for overestimating our abilities. We're a cocky bunch.  Let's take a look at how big our heads really are and its influence on our finances.

Credit cards get a bad rep. They have a ton of fees, charge a boatload of interest, and can encourage destructive spending habits, the ol' swipe now, think later . With all that being said, I'm a big fan of them. I prefer credit cards over all other forms of payment (cash, debit, begging). They have a lot of upside if used properly. Credit Card Best Practices Pay your bills on time . This is obvious. If not, you'll get hit with late fees and damage your credit score. Pay your balance in full. Don't just pay the minimum payment, pay it off completely. This allows you to sidestep their high interest rates (usually 16-20%). If you can't afford the balance, that's a sign you're spending too much. Cut it back. Don't use all your limit. If your balance is always near your limit, it means you have high credit utilization. It shows credit bureaus you live/spend on the edge, this makes you look risky and hurts your credit score. A good rule of thumb i...

Atomic Habits by James Clear is a simple yet incredibly insightful read about habit building. It centres around the fours stages of a habit and the driving forces behind them. You can leverage this knowledge to build good habits -  and to break bad ones . Today, let's apply these insights to the world of personal finance. The Habit Loop - The 4 Stages of a Habit The habit loop consists of: Cue ---> Craving---> Response ---> Reward The cue is the trigger. It can be a location, time, feeling, sound, action, etc. The cue sets off a craving. The craving is the desire to change your current state. If you're hungry, it's the desire to be feel full; if you're stressed, it's the desire to feel relief. This is the motivation to act. The response is the action that satisfies your craving - t he habit itself . The eating to settle your hunger, the nail biting to settle your stress. And finally, there's the  reward . Your craving satisfied...

“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. ” - Archimedes