September 1st, 2007 
NCN
Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts.
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.
Click here to read all of the 33 Days And 33 Ways To Save Money And Reduce Debt posts
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I do indeed send extra payments, early and often. I have a credit card at Chase, and I can send payments as often as every three days if I like — I now send two payments every week. One payment in any given month is my minimum payment. Two more payments during the month are “snowballs” to reduce my debt. The remaining payments are for the items I charge, plus any “snowflakes” (smaller amounts) I have during a given week.
I use Quicken to track my money, so I have an expense category called “pay down balance” that I use for snowballs and snowflakes. I add snowflakes to my pending entry for Chase and have it update the total, and Quicken will deduct the amount from the balance of my checking account, so I will not see it as money available for spending. The next time I transfer money from my checking account when I make the Chase payment online, I copy the transaction number from the payment and replace the memo that says “pending” with the transaction number, so that I will know that it is paid, and I will update the date of the transaction in Quicken to match the date of the scheduled payment.
Any balance in Quicken that still remains when my next paycheck is deposited to my checking account is also a snowflake, and so I either will add that amount to my next credit card payment or I will transfer it to my “irregular” savings account, to help cover unexpected bills.
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I check my internet banking dailying…any change in there as in what I cant withdraw froma machines gets transfered to credit card to get it paid off sooner..That is on top of Minimum payment
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