So How About That Payment Schedule?

[Anonymous]

Hi Team!

Finally (I think), I've a valid reason for starting a thread. I preface with an apology if this topic is already buried deeper than I looked, or if I'm beating a crocodile. With a cactus. Woah.

Anyhow! As I'm entering into a somewhat more predictable paycheck at my first career move, I wonder, for future credit's sake, how do you schedule your obligatory payments with (or without) these particlar points in mind:

• When your creditors report to the burea(s)
• Based on how you receive pay: weekly, bi-weekly, monthly, etc.
• Credit card payment due date, and perhaps by extension, utilization (I prefer to be at 2% or PIF before my CC statements close (and I only have two CCs), but everyone has different priorities and realities, do share yours!)

Again, I hope I'm on the right board with this question, since it is a credit heavy one. Please, no need to disclose salaries/hourlies/commissions; I am trying to plan intelligently, now that I'm better armed with credit knowledge - great thanks to the community here, and in a way that helps maximize the benefits of having credit usage reported. Reading from the diverse group of voices here is always highly informational, so thanks for sharing.

If this doesn't make sense, whack me with the cactus, rawr!

[Anonymous]

Utilization is a snapshot and has no memory, so I don't worry about it in my budgeting. If I plan to apply for credit, then I adjust things so that I can show the utilization I want when I apply. Otherwise, I really don't care.

[Anonymous]

The billing cycles of most or likely all of your different credit accounts can actually be aligned by you to be the same, if you think that would be easier for you.  Student loan servicers, the CU where you have your car loan, your two different credit cards, etc.  You can contact them all and ask if they can arange the billing cycle to start on (say )the 5th of the month.  Or whatever day you like.

What is certain is that you should be planning a budget that enables you to save a good chunk of your paycheck every month.  So in a way some people decide that it doesn't matter when their various accounts debit their checking account.  You could do something like this:

At first just focus on paying your bills and paying your cards in full and putting a decent bit into your 401k.

After a month or two you will start building more and more cash in your checking account.  After you develop a good $1000 or more, begin doing any or all of the following:

     * Put the increasing amounts of excess cash into an online money market savings.  This MMS will be your rainy day fund, which should grow to be enough to pay for at least two months of all expenses (some people think it should be 3, 4, or even 6).

     * Increase the amount you are putting into a retirement account (you can put up to 24k a year in tax sheltered vehicles like 401ks, IRAs, etc.).

     * Begin putting money into some other kind of savings, e.g. saving for a house down payment, a car, etc.

[Anonymous]

Demiurge: True, it isn't necessarily stable, and for the most part I try to keep mine low for peace of mind. Now, however, I also understand  the benefit of timing (as well as that can be done ) and am trying to use that to my advantage, in case I need my credit scores to hover at a certain height.

CreditGuyInDixie, hello hello, hope you're well! You've outlined a sound approach to savings, thank you. I am actually always going over my and revising my plans of attack, where that is concerned, but I am using money market accounts and (YAY!) will be investing this new year. The rainy day fund, I admit, I am very behind on, but glad to say I already started it (using NFCU's highest interest certificate to help push it this next year). I agree with the minimum goal of it lasting a person six months in case of an unemployment emergency. For myself, I'd like eventually like it to be enough to last me a year of living expenses.

As for the timing of bill payments, I think that's more what I was wondering overall - and I have taken advantage of moving my CC pay dates, just haven't been able to yet with my student loans (only just entered repayment). In fact, I might have answered my own question now - but it took writing it out on here, go figure!

So here's a slightly better ask: are you consistent with your pay dates? For instance, we know on daily interest accruing accounts (i.e. student and car loans), we should pay if possible, far ahead of the due date and double the minimum, but that can be a little harder to implement on a once-a-month paycheck, especially if that paycheck isn't goal. Do you stick to a self-made date no matter what, or pay sporadically throughout the month? This is more out of curiosity what other people's situations are, not necessarily a comparison of which method is better, because we all have different timing challenges to overcome.

If anyone has a spreadsheet they're proud of, feel free to share!

[Anonymous]

I am lucky that my salary is big enough (and that my desire for stuff low enough) that I never have to think about it.  My paychecks come in every two weeks.  I tend to keep about $1000 - $4000 in my checking account..  My credit cards are all set up to PIF automatically -- the credit card companies just debit it to my checking account.   When I see that my balance stays above 4k for at least a month I push 1-2k over into a MM savings account.  

Booooo - ring.  I know.  But it's what I do.

:-)

[Anonymous]

I'm on Step 1 of what CreditGuy literally just posted!  I have 2 main banks, one holds my IRA, the other has a CD I started in August.  I pay myself biweekly when I get my paycheck, into savings until I hit a $1k goal.  Then, 25% IRA, 75% Savings.  Repeat.  About to hit Step 2 25/75%, excited.

I have a tight budget.  Moving in 3 months, to a lower rent inland city as well, closer to work. 1-2hr drive sucks.

I PIF and stagger my use of cards and pay dates so no interest is ever dealt. Still new to CC vs Debit Cards. Cap1 was statement credit, NFCU Cash goes to savings. More I use cash back more I love it. 

Reading this thread. Good Intel!

[Anonymous]

I live off SSI at $733/month, which comes in generally around the first of every month.

I set up all automatic bills and credit payments to occur between the 3rd and 7th of the month, if at all possible (one won't let me got any earlier than the 15th so I manually pay it off with the automatic as backup). My "small amounts/rarely used" cards are set up to automatically PIF, and my main use card is set up to pay minimum due automatically (since I don't always have enough to PIF this option avoids both lates and overdrawing).

I set up my system this way so that the first week of the month is spent making sure all the bills and payments are taken care of, and sketching out how tight my belt needs to be for the rest of that month in light of financial goals and present realities. During that first week I manually pay a large lump sum to my main card as I'm working to get that balance to $0 and I maually transfer some amount into savings if at all possible that month, even if it's only $5. My approach is shaped a lot by the fact that I'm subsisting on "bare bones" in a lot of ways, and while I can survive on very little it easily reaches unhealthy extremes. This approach ensures I stay out of debt and avoid lates while also making it easy to plan the best route forward from month-to-month in keeping with ever-changing circumstances.

[Anonymous]

CreditGuyInDixie, not boring, efficient! I'm not yet comfortable with direct debiting anything, but then, I have little enough to manage that it's easy to remember what needs paying when. I am going to shuffle into it at some point soon though.

buyaobuyao, that is wonderful, I'm glad you're in a position to do as you're doing, can't wait to join you in your savings party.

Batsy, it sounds like you're "handlin'" it, good for you! And yes, even $5 is better than no dollars - it has taken me a while to get to that point, because I've always been more concerned with paying my dues. "Pay yourself" should be written on the mountains, eh?

You all pointed out having little to no desire for "stuff" and I appreciate you saying so. I have a few expensive hobbies, but they are such that can pay me, and at the moment, they're not costing me anything - otherwise, I am a big fan of practical minimalism.

[Anonymous]

I use a zero-based budget, meaning that I assign every dollar a job (idea stolen from Dave Ramsey, though I am generally not a big fan of his, and You Need A Budget, though I am too cheap to use their software). All of my bills are due by the 12 of the month (this is referring to normal monthly bills. I don't consider when my credit card bills are due because I make many micro-payments throughout the month so I typically report a very small balance, if any.) My house bills auto bill to my credit cards. DBF, who shares the bills with me, gives me his bill money up front every month. His money, plus the first of my bi-weekly paychecks pay off the credit cards as soon as they post, as well as add to the short term savings for things that I only pay annually or semi-annually. My final check of the month pays any take out food charges I have made and the rest goes into savings. Twice a year or so when I get three paychecks a month, I do not count it in my budget, so I am able to bank that check into savings as well. I do not spend more because I may make more those months.

Edited to add: I typically get a significant tax return back (normally 3k or so) because I claim zero throughout the year and claim my son when I file in Jan or Feb. I do not blow this money away like many do. I may pay a bit extra on my student loan, get another month ahead on rent (currently two months ahead) or just put it all into savings. Sometimes I take $100 and buy the expensive things at the store that I hate buying, like razor refills and giant laundry soap. I consider these things a splurge. lol

[elim]

when Prism alerts me the bill is due, i pull down the icon, put my phone back in my pocket, and continue doing whatever it is i am doing at the time.  paid