A personal finance blog about the findings in my quest to reduce and manage debt and gain wealth through money management, investment, good habits, and self education.
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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