Thursday 4 January 2018

My Personal Debt Ceiling

Okay, so this year going forward I am going to try a bit of fancy-dancy fiscal trickery (at least for me). I am going to keep my large payments into my savings.

I will first be putting those payments into the Mid-Term Savings Account (up until that 2 year Living Expenses Target).

After that, I will be putting those payments into my Long-Term Savings Account. I sometimes refer to this as my “Dream Account,” as it will fund my dreams.

If I am able to keep these payments up, then by the middle to late of 2019, I will be able to start shopping for land.

Yet, in order to do this, I will be putting the large, expenses, onto my low-rate credit card. This one has an insanely low interest rate, so I will be treating it like a Line of credit.

I will be putting at least $100.00 onto this card each payday, as well as all of the extra cash that I can spare from my payday budgets.

This will ramp up when I near the end of the year and put a serious bite into this card. Once I hit my target in the Dream Account, I will then pause that savings plan and pay this thing off.

Yet I have decided that I will not put more on that card, than I have in my Mid-Term Savings. My max limit on this card is two thirds of my target for the Mid-Term Account.

I will not go crazy but there are a few things that need to get done, so the decision had to be made: Savings Vs Expenses. 

Do I pause my savings plan in order to pay for things like: the repairs to Wanda, or that Mattress that I have needed for the past two years? 

This way I can do both, and since I will have more in savings than on that credit card, I will be able to pay it off at the first sign of trouble. 

This is key, I think, when dealing with credit: Don’t have more on credit than you have the ability to pay off in a short period of time. 

The reason why I am doing this, trying this approach is so I am able to keep those savings payments on track. That is everything. 

Again, I will see how this goes and I reserve the right to change this plan, if it doesn’t seem to be working. 

As always: Keep your head up, your attitude positive and keep moving forward!

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