The balance between paying down debt and savings

[Tradd]

Someone had suggested a half and half approach to laying down my debt. I’m going to give that a try. The 30th paycheck is when I pay on cc with balance. I’ll throw extra on payment. My extra from the 15th pay will go into savings.

Debt pay down is seeing results already: credit score went up a bit. I got a credit alert through Experian (I have an account where I recently froze my credit) that one account had a reduced balance. Plus my Apple Card limit was automatically increased by about $3K.

[iris lilies]

Enh…the credit score thing—last month my credit score dropped from Exceptional to Very Good, all because I put a large charitable donation on it, to be paid within a month. I never carry a balance and have not for decades. This amount didnt even put me anywhere near my credit limit.

Bottom line: the ratings are stupid.

[Rogar]

I was reading, I think in Motley Fool, how people should have a few credit cards just to maintain a credit score. I bought my first house late in life, with no other debt, an only a debit card. I was asked for records from bills like phone, rent, and power showing I paid my bills on time. It seemed like enough to qualify for a loan on my first home mortgage. I've never really thought much about a credit score, but it seems important that you pay off debt payments on time regardless of whether you just forgot, or it's unaffordable.

[Tradd]

I have NO late payments at all.

[Alan]

I've never really thought much about a credit score, but it seems important that you pay off debt payments on time regardless of whether you just forgot, or it's unaffordable.

Otherwise one would appear to be a bad credit risk which, oddly enough, is reflected in their credit score.

[catherine]

Credit scores are artificial measurements of that do not measure your true "credit-worthiness." A credit score is a metric that the credit-card companies use to see how likely they are to be able to make money off of you. Your score is high if you use credit all the time, but only use 1/3 of your available credit.It's higher if you have had a credit card for a long time, or if you have a lot of credit cards, which raises your available credit.

To quote IL: ratings are stupid.

[Tradd]

The Every Dollar experiment was a dumpster fire. I budget per paycheck. I always have. Budgeting for the month with money I don’t have yet just doesn’t work for my brain. As you saw, my expenses are not complicated. So what I do is pay bills, including minimum payment for credit card, then see what I need for any diving or extra activities (including things I need to save up for), and what I want to put into savings or extra against debt. I don’t use cash for anything so I can easily look at checking account or Apple Card (I use this for gas and things like that and pay balance immediately) to see what I’ve spent.

[Tybee]

That is funny that it was a dumpster fire! I have been behind but working on this month's Everydollar budget. I do use a lot of cash, put money in envelopes. But then I also put stuff on a credit card when shopping online, which makes budgeting more complicated, since I don't connect accounts to a budgeting app, I do it all manually.

This month, I swear, I will get it right, budgeting!

Yesterdy DH and I worked out what our social security payments are going for as the amounts are changing, and he is going on Medicare so has more being taken out. And I've had new health stuff I am taking out outside of Medicare, so we needed to straighten these out.

[happystuff]

That is funny that it was a dumpster fire! I have been behind but working on this month's Everydollar budget. I do use a lot of cash, put money in envelopes. But then I also put stuff on a credit card when shopping online, which makes budgeting more complicated, since I don't connect accounts to a budgeting app, I do it all manually.

I also do my finances and tracking bills manually. While not necessarily budget related, I keep track of every credit card purchase (don't use a debit card) by writing it in my check registry. This way I know that when the bill comes in I will have the money to pay it off every month and it also makes it easy to verify my credit card bill (no added/incorrect charges). Some folks think it is a lot more unnecessary work, but I don't mind as I am pretty sure of my exact charges and account balances. Just a thought.

[iris lilies]

The Every Dollar experiment was a dumpster fire. I budget per paycheck. I always have. Budgeting for the month with money I don’t have yet just doesn’t work for my brain. As you saw, my expenses are not complicated. So what I do is pay bills, including minimum payment for credit card, then see what I need for any diving or extra activities (including things I need to save up for), and what I want to put into savings or extra against debt. I don’t use cash for anything so I can easily look at checking account or Apple Card (I use this for gas and things like that and pay balance immediately) to see what I’ve spent.

I use my credit card for most everything too, 99% of spending. The record keeping aspect has come in handy, not only for purchases, but to track my whereabouts on a certain day if my calendar does not reflect that.