Paying down debt by the penny - how essential is that non-essential?
I am a fan of making multiple snowflake payments every month instead of saving up for one big payment. I do make one big payment a month that includes my total minimum payment plus an extra snowflake amount, but I frequently send in (via online banking) little bitty payments when I save money on something or get unexpected money or sell something. I frittered my way into debt, and I am going to fritter my way out. :) It is also a reason I love online banking so much - I can send a little payment once a day, once every two days, once a week…. whatever I want.
I love to buy little “extra” things at the grocery store. It is probably my biggest budget buster. So now, when I want to stray from the list of things we need, I say to myself “If I can afford $X.XX for this, I can afford to send an equal amount to our debt”. So if whatever it is is SO important to me I am willing to essentially pay out twice the cash in order to have it, I buy it (with cash) and then when I get home I send an equal amount of money to our credit card.
So once in a while I get a treat but my debt goes down a bit at the same time. I will beat down the credit card a penny at a time!
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June 26th, 2007 at 7:03 am
Oh I like that. I tend to make the once a month payment and then save up for a big extra payment. Maybe I should just get the money out of my hands before it is gone!
June 26th, 2007 at 7:37 pm
Wow, what a terrific idea! I like your statement - “I frittered my way into debt, and I am going to fritter my way out.”
One of my cc’s actually made a rule that you can only pay online once every 5 days. I’m sooooo ready to be done with them.
Great post!
June 26th, 2007 at 8:34 pm
My cc has a rule like that but it is once every 24 hours not 5 days. 5 days! Mean cc.
Not that they aren’t *all* mean
October 27th, 2007 at 2:18 am
Brilliant but simple idea !
Only just realised that the quicker I pay the CC bill the less daily interest, couple that with your fritter payment idea it will be like a hammer and nail situation.
Thanks !
October 27th, 2007 at 8:28 am
Oo I just started doing that too! Every little bit I can squeeze out of my budget not including my actual official minimum payments, I immediately allocate towards debt… even if it’s only $10.
October 29th, 2007 at 8:26 pm
It really does work! Glad the idea is gaining momentum
January 6th, 2008 at 6:55 am
Paying extra everymonth is great. Because my credit card debts are at 0% interest, I have opted to instead save the money on an online account and pay at the end of the month. That way I’ve earned a little more money that month.
January 18th, 2008 at 8:43 am
One of my credit card’s allows only FOUR payments in a month’s time!