Comments on: The method to my madness http://www.debtreduction101.com/2008/11/28/10214_the-method-to-my-madness.html Digging my way out of debt Tue, 15 Nov 2011 21:23:21 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: steve http://www.debtreduction101.com/2008/11/28/10214_the-method-to-my-madness.html/comment-page-1#comment-71 steve Sun, 07 Dec 2008 05:40:24 +0000 http://www.debtreduction101.com/?p=214#comment-71 My feedback would be that, if managing each paycheck and making payments works for you, keep doing it. However, I have found that it works better for me if I do an overall budget for the month with a set payment to my debts. In your case, if I had a 5500 cc debt I would determine a monthly payment towards it based upon my average monthly income and just plan on sending that it. If I had extra cash beyond that, I would put it aside in my checking account as an emergency reserve until I had at least $1000 built up. After that I would apply any extra money (beyond bills, such as your dental bills) to the credit card debt. I have also found that it is very nice to build up enough money in my checking account that I can budget *last* months' income for this month's expenses--so I am spending money now that I banked last month. I learned this from Jesse Meacham on his YNAB budgeting site. This is a fantastic approach that would majorly reduce the stress (and bill juggling) of your financial life. I know that as long as I have a base level of $1400 in my checking account at the end of a month, I don't have to even visit the bank to deposit my paychecks for 4 weeks because the $1400 is enough to cover all budgeted expenses for the month. My feedback would be that, if managing each paycheck and making payments works for you, keep doing it. However, I have found that it works better for me if I do an overall budget for the month with a set payment to my debts. In your case, if I had a 5500 cc debt I would determine a monthly payment towards it based upon my average monthly income and just plan on sending that it. If I had extra cash beyond that, I would put it aside in my checking account as an emergency reserve until I had at least $1000 built up. After that I would apply any extra money (beyond bills, such as your dental bills) to the credit card debt.

I have also found that it is very nice to build up enough money in my checking account that I can budget *last* months’ income for this month’s expenses–so I am spending money now that I banked last month.

I learned this from Jesse Meacham on his YNAB budgeting site.

This is a fantastic approach that would majorly reduce the stress (and bill juggling) of your financial life. I know that as long as I have a base level of $1400 in my checking account at the end of a month, I don’t have to even visit the bank to deposit my paychecks for 4 weeks because the $1400 is enough to cover all budgeted expenses for the month.

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