One of prime goals here at modern day thrive is to help you save a little money , and I cant think of a better way to do so then NOT to give all your hard earned money away to interest.
I don’t know about you but it heart wrenching to look at your mortgage statement and realize that 700 + dollars of your hard earned income went into someone else’s pocket. You will never eliminate interest all together but there are certainly steps you can take to minimize it.
So lets take a deep dive in on something you can do right now to take some of that burden off of you and turn some of your interest into more principal paid.
1. Convert all of your interest accounts over to a more optimal payment structure that benefits you and not the bank. Sounds easy so why doesn’t every do that already? The answer to that is you have not thought of it and just needed a little knowledge how to do it properly .
2. Second you would write down all your debts on paper or a spreadsheet , this is really up to your preference and access. As you are writing them down make sure to put them in order from largest balanced account to the smallest and this will become apparent why shortly .
3. Let say for example your smallest debt is a payment of roughly $25 dollars due on the 30th of each month. The process is simple as you will go ahead and make your normally scheduled payment prior to the due date.
Once your statement balance and payment are available for the next month which should be around the 1rst of the month you want to make another full payment. What this does is to put you 30 days ahead of your billing cycle , so now you are decreasing your average daily balance which is what the amount of interest you pay is determined .
4. You would just rinse and repeat the process for all other accounts until they are all converted. In some cases you will not be able to do some of the bigger accounts and have to save up to have enough to convert it . (This is normal and still worth the effort).
5. Once all your accounts are converted pay the minimum on all accounts except for one and my preference is the lowest balanced account . It is much easier to make strides on a smaller account instead of struggling to attack larger accounts when you are likely just making the minimum payments anyway.
6. When one debt is paid off it is advised that you roll that payment on the top of the next debt in line to increase the principal pay down and in the long run reduce your interest charges.
This is pretty simple to follow but if you have any questions please feel to add a comment to this post and I will address in the best way I can.
Hope this information finds you well and we look forward to bringing you more content soon.
Next up : How to get a better interest rate on your credit card.
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