Quote from @Kyle Luman:
Quote from @JD Martin:
Quote from @Kyle Luman:
Quote from @James Hamling:
I struggled with debt management until I incorporated this pay bi-weekly "law". It started as a goal, turned into a rule, now it's a law I very happily live. I save untold thousands annually thanks to it.
I haven't heard of the bi-weekly credit card payment idea. I see how that would keep your utilization percentage down (and thus help your credit score a small amount), but I don't see how it saves you actual money. Can you educate me? Thank you.
The other trick to that is to pay balances off in full before the end of the month that the statement was reported, irrespective of the due date. Credit companies report balances at the end each month after a statement has closed. So for example your American Express statement closing date is December 10 and your payment due date is January 4. You owe $3000. If you pay that before the end of the month, the reported balance is going to be $0 even if you buy $5k worth of Christmas presents next week, because that float won't count until the next statement closes. Most credit cards give you 21-28 days on your float before the closing date, plus the 3 weeks or so before the due date, so the savvy credit user can actually sometimes float 5-7 weeks of credit with $0 reported depending on due dates and closing dates. I've hit it where I've given myself an almost 8 week interest free loan before and had no utilization reported, which is awesome when you're knee deep in several rehabs.
Got it, thank you.
1. If you carry a balance month to month (only paying the minimum or minimum plus), paying twice monthly can save you some money in interest charges.
2. If you don't carry a balance month to month, you can get interest free loans (money saved) for several weeks. (But, I don't think the twice monthly payment in this situation does anything. I've researched the 15/3 rule a bit and it doesn't look like it actually helps you if you are already paying the balance to zero each month.)
By rewiring your brain to bi-weekly clearing of debt's (paying) it put's a persons mindset in a much better cash-flow management place. That mindset matters arguably more than anything else, because mindset crafts reality.
Next, via bi-weekly your never going to "miss" a payment. And the calculation windows for when interest is assessed would probably surprise most people, it's generally not what one thinks it is so often waiting to that statement does often incur interest charges.
There is also algorithm advantageous to bi-weekly vs monthly, so a bit of a credit-hack boost effect to it.
Reality is most people earn income bi-weekly. And for vast majority of persons delayed debt payments results in accruing debts, because they find they have less left to pay down than hoped. It's a "rigged" system of consumer psychology, the monthly statement payor system.
Bi-weekly system is changing ones financial perspective, mindset and reality. Seems a small change but it really isn't, it's breaking free of a "system".
Look, I think of it this simple, I don't know a single established millionaire who does the "standard" consumer debt thing. Not a 1. There is a reason for that, both ways. I often have heard excuses of "oh it's easy for them/you because you have...." when truth is it's these disciplines that got us to where we are, not the other way around.
You don't live "bad" financial discipline, accrue wealth and THAN gain healthy financial habits from the $, that's nonsensical. You gain wealth as a result of good/healthy financial discipline.
Proof? Look at how many lotto winners are bankrupt in years following. Look up how many pro athletes who clocked 7 and 8 figure annual incomes, went broke. It's a scary high %.
