Once I come to the end of paying off a bill, I still continue to take out of my paycheck the same amount for that particular bill. I put half on another bill and the other half in a savings account or CD. Now each time I pay a bill off, I do the same thing to the next bill. That money was already earmarked, so I am not missing any extras.
By Georgetta from Waterloo, IA
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I did this four years ago and tucked away 46,000. I went to a site called www.paycheckcity.com. This site has a calculator that helps you play with your paycheck. I realized that because the 401K comes out of your taxable income, it allows you to decrease what you pay in taxes (money takes out of every paycheck) and you can tuck the money away tax free. Best part, the TAKE HOME total hardly changes. I discused this plan with my accountant and we figured out together how many excemptions I could claim safely. Then I cranked up my 401K deductions to 15%. I had $100 less a month but I was accumulating four times that amount every month in my 401K. Then when my employer matches the deduction, all that money starts to gain interest tax free. I never had a saving plan in my life, this one is working automatically.
Reality check needs a reality check in reading comprehension! Where does she say she is using credit cards to pay off debt?
I get paid once a month and I immediately subtract an amount out of my check register...it doesn't look like it's there, but it is. I try not to bother it for the month. At the end of the month, I decide what I need to do with it. Continue to save it, pay an unexpected bill (huge vet bill this month...than God I subtracted that money! Now I won't miss it.)
I *DO* use my credit card to pay all of my bils such as internet, cable, groceries, gas, everything because after I spend a certain amount, I get a refund check from the credit card...NEAT-O! AND I PAY IT OFF EVERY MONTH SO NO FINANCE CHARGE OR ANYTHING. I write one big check or pay it online.
Reality check, where does she say she is using credit cards to pay off debt?
I get paid once a month and I immediately subtract an amount out of my check register. It doesn't look like it's there, but it is. I try not to bother it for the month. At the end of the month, I decide what I need to do with it. Continue to save it, pay an unexpected bill (huge vet bill this month. Thank God I subtracted that money! Now I won't miss it.)
I *DO* use my credit card to pay all of my bills such as internet, cable, groceries, gas, everything because after I spend a certain amount, I get a refund check from the credit card...NEAT-O! AND I PAY IT OFF EVERY MONTH SO NO FINANCE CHARGE OR ANYTHING. I write one big check or pay it online.
I also commend you for your system, and I can attest to the fact that it works. I had $31,000 worth of credit card debt and medical bills, and I paid it off using this method. My car is paid off and all that I owe for each month is my utilities and my house note. I don't charge anything, and I am now able to save money for those things that come up when you least expect them.
One thing that people don't realize is that while getting on a budget is the right thing to do, there are many ways to do that, and you just have to see what works for you and your family. It is great to pay off the highest rate of interest first, but getting the money to pay them off at all is the real issue.
Additionally, where in your initial note did you say that you were still charging on cards? Maybe you are and maybe you're not, but it seems that Reality Check just had a hostile take on the whole subject. And I really disagree with Reality Check's advice to quit playing games with the money situation. Why not break it up the best way that you can?
You go Georgette, keep on keepin' on with that plan. I can tell you that it WILL pay off and you can get out of debt if you just persevere with that "little cryptic game".
I think this is a great idea. And, "Reality Check" needs to read your post again. I don't see that credit card abuse applies to your budget. Medical bills cannot be budgeted for, since they are not planned events. And even some items have to be purchased, even if it means "on credit". If your water heater goes out, you can't just wait until you have cash on hand. But that doesn't mean you aren't budgeting responsibly. I commend you for your self-discipline.
Harlean from Arkansas
You still have not learned how to adequately budget yourself like a responsible adult should be doing!
You need to stop playing little cryptic games with yourself and learn how to budget yourself properly. Then you need to adhere to that budget no matter what you want to buy that you obviously can not afford.
You aren't "saving" anything when you keep buying on credit and paying interest and finance fees!!! You won;t begin to save money until you stop buying on credit and paying things off on time.
While you're paying down your debts; you have to carefully examine the finance rates/charges on each debt. You should pay off the highest rates first and see what you can refinance under a lower interest rate credit card first.
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