I’m a big fan of keeping things simple. With that in mind, here is Saturday’s tip – After making your minimum payments for the month, use online bill pay to send extra payments to your creditors, as early and as often as you can. Remember, most creditors base the amount of interest they charge you on your daily balance. So, get those extra payments in as soon as you can, and you’ll reduce your monthly interest charges. (Be sure to check the account details associated with your particular credit accounts.)
The same idea holds true for deposits made to your savings account. The sooner you deposit money in your account, the sooner you’ll begin to earn additional interest.
I realize that this tip is “simple”. That’s precisely my point. Instead of letting your money sit in your checking account, put it to work. Deposit it in an interest bearing checking or savings account. Send additional payments to your creditors. Over and over, I talk to people who plan to get out of debt, but month after month, instead of sending additional payments to their creditors, they waste their money on frivolous purchases. Be different. Be intense. Be smart.
Do you send in extra payments, early and often? Leave a comment and let us know. If you are a blogger, write a post about extra payments or early payments and contact me. I’ll be more than happy to link to your post.