So I just checked my other bank and saw that my savings account it up to $1300. I set an allotment for my paycheck to just send money directly to this account every two weeks back in November. $100 a paycheck isn't hurting too much, and if I had that money in had I'd probably blow it on something stupid anyways.
My question is this, I have about $5200 on my Mastercard right now. That's down from the $7-$8k that was on it in January, but I used a large portion of my tax return on paying it down. Since I get paid every two weeks I essentially get 2 extra paychecks a year (I plan for 2 a month, or 24, not 26). I was planning on sending about $2000 to the card next month with this extra paycheck (and then some). Should I also take out like $1000 from this savings account to chop the debt down to $2200 from $3200? It just seems like a much more approachable number to me right now. One payment away from starting with a $1,xxx.xx. Then it should be downhill from there.
Oh, my rate is really good for a credit card btw, 8.24%, so the interest/minimum payments are not even an issue on a month by month basis.
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It's pretty simple to determine where your money is better directed, just look at what your debt costs you versus the interest you earn on it in your savings account. If you would save more by paying your debt off sooner than you would earn in interest on your savings, use the money to pay off that debt. If you would earn more in interest than you would save by paying the debt off earlier, save the money.
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