Chipping Away - Busting Debt in Boston

A personal finance weblog about my own journey to eliminating my debts and building net worth. Hopefully this will serve as a place for me to share and discuss my strategies and ideas, as well as keeping me on track and focused.

7/14/2006

How I let Debt Pile Up - Part 1

Just read a post over at My Money Path entitled Work is Holding My Money Hostage, and it reminded me of two things. One is that I have done a lot of thinking about the same issue. And two, I actually allowed this phenomenon to assist me in building up more debt...

Similar to the issue mentioned above, when I go somewhere for work, I pay out of pocket with my credit card and later get reimbursed in the form of a check. That check goes into my bank account and then needs to be paid back to my credit card immediately (to avoid racking up extra finance charges). This SHOULD be done in addition to whatever regular monthly payment I was planning on sending to that card anyway. The problem is that more than a few times, I ended up making no additional payment to my card on top of the reimbursement from work, and subsequently let more debt and interest stay on my balance.

Do it once and it's not a huge deal. Do it several months in a row and suddenly you're not only a few months behind on your planned payments, but you're also further in the hole due to additional interest that's built up. To make matters even worse, think of what happens if you purchase a couple things during that period of not really paying into the card... Now where's that balance, again? ;-)

3 Comments:

  • At 7/14/2006 12:08 PM, Blogger Quo said…

    This very same problem started me to saying "no" to trainings that I should attend. I will go to the "mandatory trainings," but I no longer will go to the optional trainings. I was not able to recoupe my monies spent until a month or two aferwards depending on when I turned in my receipts. It can get expensive, and I have been horrible in the past with my money. It is an expense I can do without right now.

    Quo

     
  • At 7/14/2006 4:37 PM, Blogger Daniel said…

    Thanks for the comment over on my blog. I run into the problem of not paying enough on my credit card also on occassion. I'm considering using an entirely separate credit card for these expenses to help me manage it better, but I hesitate because I only have one Airline miles card. I may have to just suck it up and use another card, but I just haven't decided yet. Good luck to you with this one. If I get any good suggestions, I will let you know.

     
  • At 4/16/2008 11:03 AM, Anonymous iva said…

    How I let debt pile up...part 100... That'd be the case if I was writing this article! Far too many mistakes to mention. At least now my debt is starting to come down for the 1st time ever!

     

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