Sunday, September 27, 2009

Slow progress, but forward motion nonetheless

CC1 progress

$1,272.98 starting balance
- $6.94 earnings

= $1,266.04 current balance (20.34% paid)

I found another reason to get out of debt as quickly as possible. Blunt Money's post on how interest rates are calculated shows that most credit cards charge a daily periodic rate, meaning that I am accumulating interest every single day. The term APR is misleading because you would think that it's an annual percentage rate but it's not.

Sure enough. I looked up my last statement on this credit card and they are charging interest every single day. That means that today I'm being charged interest on the interest that they charged yesterday. Compound interest strikes hard. I feel justified sending multiple payments every week if possible. It will save us money on interest because our daily balance will be lower.

We were hit hard with expenses last week. Four new tires plus alignment (which we desperately needed) cost us $416.75. Ouch! We have a $58 mail in rebate but that money can't go to the credit card until I get a check, which usually takes 4-6 weeks. Oh, well. At least we had the money in the bank and could pay cash even without touching our savings account.

Groceries were also a big expense because we needed a few things that aren't weekly purchases - olive oil, kitty litter, two bags of cat food, and a couple other odds and ends that couldn't wait. We spent most of the grocery budget on staples, building up our pantry again. I'm probably going to have to use the rest of our snowball for September ($40) to buy additional food. We don't have enough to last two weeks.

I keep reminding myself that we are making progress, even though it doesn't seem like it some weeks. It's a blessing to be able to cash flow expenses rather than dip into savings or use the credit cards. All of our bills are being paid on time and we even have extra money some weeks. I have to look at the big picture, not just at the previous week. The big picture looks so much better! God is very good.

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