Another Debt Paid Off (with a little help from a debt snowflake – and an extra Friday in January)

I just got back from the bank where I wrote a check for the payoff balance of one of my last credit cards. It was a card with a 12.5% interest rate and the highest balance was close to $5,000. Looking back through my payment history from years ago, I see that I was paying over $100 per month on this one card alone. Needless to say, it’s a pretty good feeling being able to wipe out one more obstacle on my way to debt freedom. What made it a little easier was that extra paycheck we get this month. This gives me chance to go over a particular feature of Undebt.it that you may not be aware of, the “additional payments” section located under the My Debts menu item.

snowflake_paymentsThe additional payments, or debt snowflakes as some people come them, allow you to account for any extra income you may be able to apply towards a debt in a certain month. Since we get paid three times this month, I try and plan to earmark an extra $1,000 to put towards debt. It’s also a good time to make sure your emergency fund is in the black. These extra payments can make a big difference in your plan. Without them, it would take me an additional four months to be debt free. snowflak_tableThis next screen shows how the debt snowball table handles these extra payments.

You’re not limited to just adding one additional payment per month – you can add as many as you want and Undebt.it will total up the payments. You can even add a negative amount to bring down snowball payment for a month if needed. For example, if you know you’re going to have a property tax bill coming up in April, just add a negative additional payment so your budget will be more accurate.

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