Friday, October 9, 2009

My Thought Process on Investing vs. Debt

I have four credit card accounts, I have paid off and implemented the art of paying the full balance every month on two of them, leaving me with two that have balances. Truly I actually care about one, I have a balance of about $3000 I need to pay off, I earned this balance due to a lack of an emergency fund I am working on establishing. I do not want to cease my current practice of paying myself first strategy (I send $10 a week into multiple online savings accounts and now send $96 per week into my IRA and $15 per week into my Sharebuilder.com brokerage account. My new goal is to finally eliminate all of my high interest credit card debt by the end of this year. I have made the decision and am in the process of reducing my spending to find more money and I have chosen to deplete some of my savings in order to eliminate the debt. I have learned to look at a riding balance on a credit card as losing a % of my hard earned money through interest compounded against me. It is a sad day to know that the money I have saved is about to be depleted, however, the weekly payments I make to myself will slowly rebuild my savings accounts and then the interest there won't be reduced by lost credit card balance interest. If you were wondering the reason I am only concerned with one of my credit cards riding a balance is because the other is on is a proprietary retailer credit card that I use about once a year to make a purchase that qualifies for their 12 month zero interest program repayment program. I have already planned out my course of action and payments to pay the balance in full in less than 12 months thanks to Dueminder.com on that credit card.

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