Saturday, September 1, 2007

Day 4 Of 33 Days And 33 Ways To Save Money And Reduce Debt : Extra Payments Extra Deposits

No Credit Needed is posting a series on 33 Days and 33 Ways to Save Money and Reduce Debt. Day 4's topic is on making extra payments and extra deposits. The idea is to make extra payments because creditors calculate debt on a daily basis. I am a big supporter of this method, but it can also proove difficult if you do not already have an emergency fund in place. (Big red flag... this has been one of my greatest downfalls in my efforts to repay debt, but I'll get into that in later postings.)

I find that creditors are very supportive of receiving those extra payments, but I may have to explain what it is. Oddly, its my brokerage that seems to scoff at deposits that they don't deem as worthy. These brokers, who seem fresh out of school, must be able to make large deposits if they don't wish to be bothered by my attempts at saving. I on the other hand am quite happy when I can deposit an extra $25. One of these days, I will bring them a copy of "The Millionaire Next Door" by Thomas J. Stanley and William D. Danko to read. Until then, I just smile when they roll their eyes.

Some ways I've found extra money to make additional payments include housesitting/pet sitting, recycling cans for deposits, FSA reimbursements, mileage reimbursements from work, and e-bay sales. I am always looking for new ways to increase income.

First Things First

I must begin by making a few confessions…
First, I am relatively new to blogging and have only been reading for a few weeks. My financial research however goes back through Internet sites, books from the library and magazine & newspaper articles.

My second confession is difficult to admit to but I have an existing debt of 10,000 in School Loans and 15,000 in credit card debt. How you may ask can anyone who has taken the initiative to read about debt reduction, personal finance, budgeting, and investing been crazy enough to take on this kind of debt? Not a day goes by that I don’t ask myself that same question.

I have put together a fairly comprehensive budget on an excel spreadsheet. I have addressed some of my weaknesses. I quit smoking 4 ½ months ago. That’s a savings of $5/day and $1825 per year. Ouch! I have stopped eating out everyday, but I could still use some improvement in that area.

Goals for September:
- Pay back my stepfather for that emergency loan in June. ($600) He’s allowing me to paint a portion of his house to help pay it off. They may not be charging me interest, but I’m going to feel a lot better nixing that debt quickly. So far I have repaid $180.
- Put $100 into my emergency fund and get that puppy started. (Okay, I confess that my plan is to pay off my Line of Credit that is attached to my checking account as part of my emergency fund. I’ll kill two birds with one stone.)
- Cut my meals out to twice a week and no more than $25 per week.