Property Taxes are Back Again

The time has come once again for me to pay my local property taxes. As always I am given the breakdown of reduced cost if I pay early, something I will most definitely take advantage of. My goal this year is to pay my taxes with my credit card and earn rewards parts for it, of course I will pay off my credit card and this large purchase with freed cash from budgeting and relief cash from my savings nest eggs that I have been slowly building.

I will not be using my credit card as a loan in order to pay my taxes this year as I have done in previous years when my spending and savings habits were poor. From past experience I have learned that if I need a loan I should get a loan, available credit isn't a loan. The interest rate on a loan is much lower than that of a credit card unless it is a pay day loan. I would treat credit card debt and pay day / high interest loans the same and create a plan to pay them off as soon as financially possible no matter what. Any time that you cannot afford to pay for a necessity such as your taxes and you must use a credit card in order to get by I must recommend that you follow what I have learned and before you make the credit card purchase you create a complete repayment plan in order to pay off the debt as fast as possible. I personally use the free website Dueminder.com which is a great tool to help me manage debt and prompt repayment for those times when I just cannot pay cash up front. Depending on the credit card every day past the payment due date or scheduled period end date begins the process of interest compounding against me, which in turn means I end up paying more than I should have for say something I wanted to pay less of, such as taxes. Budgeting a savings plan to meet the yearly goal of your estimated taxes can save you money in credit card interest as well as help you earn cash back on credit card rewards.

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.

Debt Management with Dueminder.com

I found another great tool other than Mint.com to use on my quest to reduce debt and build wealth. Dueminder.com is a fantastic Free Debt Management tool that that I have begun using. Once signed up to use Dueminder.com I was able to set up a Debt Reduction plan in their Debt Manager and add my debts (Loans, Credit Cards, and Mortgage). The Debt Manager works by setting up a debt reduction plan and adding your monthly commitment to the debt (the maximum amount you can afford to pay every month towards your debt) and then you choose your payoff strategy. Once your plan is created you begin to create "accounts" in order to add your debts such as your student loan from Citi, then your mortgage, then your Visa credit card debt to your plan.

Once you have everythign set up Dueminder.com can begin to shine for you. Depending on your pay off plan Dueminder.com chooses the best route to becoming debt free as fast as possible. Dueminder.com figures out the amount of your monthly payments per account to best way reduce your debt for each account and even calculates how much money you will save by following your debt management plan. It really couldn't be easier to figure out the best way to get out of debt quickly than with Dueminder.com. If things change you can modify your accounts and debt reduction plan at any time allowing the advice to always stay custom tailored to your needs and your debt reduction goal. You can even generate a recommended payment schedule so you will never miss or make a late account payment again. Laying out your future payments and due dates for each account is a great way to establish debt reduction and really help you snowball your debt problems. Through the use of easy to follow payment schedules, amount calculations, and even visual displays of how your guided payments will reduce your debt in the future debt management has never been easier. I have yet to find a better tool for debt management than Dueminder.com, and the best part is that it's free.