extra payment for good budget

Guest 0.10 Dollars($)

A few days back I was discussing with my friend on the ways to budget. We discussed a lot of ways. One suggestion that my friend gave, confused me a little. He said that if some extra is paid on each bill that will free up money and prove to be a good way to budget. He cited an example like if I pay $60 against a bill of $50 then it's going to save me ten dollars the following month. Any advice on this?

blue · Posted: Wed May 31, 2006 3:16 pm Post subject:

Hi Explorer,

I don't understand what difference that will make but I think a good way to budget is save all the receipts against each bill payments at least for one month.

When you refer those bills afterwards, you know where all your expenses go. Once you know the places and the amount for your expenses that's the best way to plan your budget as you can analyze and decide where you can cut down your expenses.

Blue

Guest 0.10 Dollars($)

Thanks for the advice Smile

but, I just wanted to know if I can free up money and thus save by making extra payments towards my bill?

Samantha · Posted: Wed May 31, 2006 4:36 pm Post subject: saving money

Hi,

I don't think that making extra payment in one month in order to reduce payment in the following month is not going to save money. The result will be same with only a different distribution.

Taking your example, you are paying $10 extra on one month and on the next month paying $10 less doesn't make any difference.

But if you consider overpaying on your loans, CCs and any other debt that acquires interest that will save money in the long run.

Hope that answers your doubt.

God bless you.

For MortgageFit,
Samantha

helping_user

Hi explorer,

I fully agree with Samantha.

There is no doubt that if some extra is paid on debt that will free up money and prove to be a good way to budget.

There are some methods to pre-pay your debt like mortgage that will save 10 to 1000 dollars so easily.

Use your income for tax refund.
If you receive any bonus or incentive at work, try to pay it as the principal on your debt.
Pay extra money as much you can afford each month when you are making the payment of debt or mortgage.

Hoping that by application of these different methods will really help you to save money.

Thanks

All times are GMT - 7 Hours

Page 1 of 1