Q on overpayments to bills...

iVillage Member
Registered: 12-12-2004
Q on overpayments to bills...
19
Fri, 04-14-2006 - 1:08am
Hi, all. WELL, DH has decided that paying "extra" to gasoline bills, electric bill, cable, cell, etc. is stupid. I tried explaining "snowflake". He gets the part about rounding up, but thinks it's a dumb idea to have paid over on the gas bill so that we have a "credit" balance of $45!!! That's $$$ in the tank, not the bank, BUT everything is paid ahead at least thru May 5th, and on the cell, until June. Taxes-paid! ($1500!). There are expenses coming up (more doc bills for skin); BD parties (three this month). Gas has gone up 11% since last yr, ($3.00+/gal), and airfares, groceries, etc? Up. Extra $$$ in paycheck? None. Sooo--ladies, am I doing this all wrong? I did pay $100 extra to the big kahuna cc, but it will take me 8 months to pay it off. But, it sure is nice not to get socked each month with huge gas and electric bills. Ideas? Whiz.

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iVillage Member
Registered: 08-19-2003
Fri, 04-14-2006 - 8:14am

I have to agree with your husband here...

I think it would be a better use of the money to either deposit into a slipping fund account, or better yet apply it as your snowflake payment to your credit card. (or finish paying those medical bills)

I have slipping funds that I make deposits too each week (At ING), car expense, vacation, home improvement, emergency fund, and then I have a small emergency fund at the local bank.

Hope this gives you an idea.

Shannon


Pregnancy%20ticker
iVillage Member
Registered: 05-09-2002
Fri, 04-14-2006 - 9:12am

Hi,
I think the only time I read about people snowflaking toward utilities on this board is when their credit cards are paid off. I could be wrong though! For me, I would not want to snowflake on anything with no interest - or at least not until everything else is paid off.

Once I have an efund, I plan to snowflake to all my credit cards, the to my truck loan, then to my student loans. Once they are all paid, I will send the snowflake that was going to all those bills to my efund or investing. Just my two cents - for me if there is no interest being charged, I would rather pay myself and let my snowflake to myself accrue in the bank.

iVillage Member
Registered: 06-04-2004
Fri, 04-14-2006 - 11:37am

I would have to agree with the other posters, I would only send extra payments to bills that are charging interest. Why not make that extra payment to something that is costing you money to hold onto or, if you don't have any bills with interest being charged, let that money earn you some interest in a savings account. By prepaying on non interest bearing bills, you are letting those companies earn money on your money. Just my 2 cents! :)

~leanne

~leanne

deciding to be happy doesn't mean that everything is perfect, but that you had decided to look beyond the imp

iVillage Member
Registered: 12-12-2004
Fri, 04-14-2006 - 12:15pm
Hi, SM--What is a "slipping" fund? Is it $$$ you've directed to each of these funds from paycheck? How do you set it up? I decided it was too much hassle to set up accounts at all of these different banks, etc, and I just have one bank (savings, checking), credit union (E-fund), TIAA-CREF (debited each month from bank), and the retirement stuff at work. DH nixed the Emigrent idea--"you have too many accounts". I think he is afraid of the ID theft thing happening again. Anyway---how do you do this? THanks. WHiz.
iVillage Member
Registered: 12-12-2004
Fri, 04-14-2006 - 12:23pm
Hi, Leanne. THis is logical. I thought it would improve credit score if I have paid ahead in good standing with utilities, gas, etc. (cc gasoline card)--does it improve credit score on this or not? I DO snowflake to the big kahuna cc (last month's total over $350!). I will try this for next month and see what happens. I mean, DH was jumping up and down not to pay $236 to the gas and electric this month, as it was paid ahead, and I didnt hear grumbling on that. DH says its' giving them "free money", so am going to do this next payday and see what happens. THanks Ladies. Dumb Whiz.
iVillage Member
Registered: 05-09-2002
Fri, 04-14-2006 - 1:18pm

Having breathing room on bills is never a dumb idea. Now giving your terrible boyfriend all the money you have from your savings to bail him out of a financial mess once is a bad idea. Taking a loan out from the bank at 21% interest to bail him out of another finanical jam 3 months later and never getting paid back either time is dumb. $4000 later....no wonder I am in debt...

This EX boyfriend was from years ago and now I am forunate to be dating someone wonderful.

iVillage Member
Registered: 01-25-2006
Fri, 04-14-2006 - 1:25pm

Whiz,
You aren't dumb. You were trying to do what you thought was best. It's a good sign that your husband and you are talking about this sort of stuff and no harm was done. I agree though that snowflakes should go to interest charging accounts not paying ahead on bills. I know that the energy bills were nice to give yourself some padding since we all knew they were going to spike and there is minimal harm in the fact that you did it this winter. I wouldn't do it as a practice though. And I definitely wouldn't pay ahead on more predictable expenses like the cell phone.

As far as the 'slipping' accounts (I've also heard them called sinking accounts or freedom funds), you don't necessarily have to set up physically different accounts for that. I think you said you got Quicken. You could simply set up accounts in Quicken to 'send' money into on paper and leave it all in one savings account. I wouldn't leave it in your checking account because that will make it difficult to balance it but if it was all in one savings account at the bank but you divide it up in your system, that would work. Then the thing to do is to look at intermittent, recurring expenses (license plates, insurance, bigger utility bills than expected, etc), total them, divide by months or paychecks and 'deposit' that amount in this account.

Do you have a payoff plan for the credit cards/medical bills? If you haven't figured out a budget amount for what is a reasonable payoff plan, you might want to do that too. Then you'll have a goal snowflake amount and even if you don't hit it every month, you'll have a target.

Peg

iVillage Member
Registered: 01-25-2006
Fri, 04-14-2006 - 1:34pm

Whiz,
None of my utilities or my cell phone accounts appear on my credit report. I'm sure if I had a deliquency, it would eventually turn up on there (probably when it got sent to collections) but they do not report positive info to the credit bureau. Therefore, you cannot be getting any effect on your credit report/score. Have you pulled your report so you are familiar with what is and isn't reported? Actually overpaying your bills doesn't directly impact your score. What impacts your score is the fact that you are decreasing that all important outstanding debt vs. available credit ratio and that you are making another on time payment. Again, the fact that you paid more than the minimum is not reported so it in and of itself is not what is helping your credit.

Hope that makes sense.

Peg

iVillage Member
Registered: 12-12-2004
Fri, 04-14-2006 - 1:55pm
Hi IDP---Am glad you posted back. I recall your inspiring story awhile back, how it took five years to pay off something! Am glad you don't have that siphoning BF anymore, and a new, financially wise BF. I cannot imagine that 21% interest rate and then, bailing out the guy again, only to have BF not learn lesson. No promisory note or repayment plan? Same thing with ex-GF. This is sad for me--file it under stupidity, or whatever. At one time, had a best GF. Monthly or bi-weekly get togethers. Laughter. Music. Concerts. Vegas. Lunch. Etc. At first, it was "Can you loan me X dollars until payday?" and it was always, without exception,paid back timely. Then, it was, "Can you give me some $$$" (we'd be at the casino). It took awhile for me to see what was going on. There never was much reciprocation. Here and there. Sadly, it has been 6 months, no more get-togethers. Someone once said, "You can be a doormat only with your permission" or something like that. I now have new GF's that reciprocate--i.e., they'll pay for their concert ticket, or they'll get tickets, and I'll get the meal, parking,etc. It has worked out so much better. BTW---HOw much more do you have to go on your debt? How are you doing? Am glad to hear from you. Whiz.
iVillage Member
Registered: 06-04-2004
Fri, 04-14-2006 - 2:00pm

Great! Give it a try and let us know. I know it is nice to have the utilities paid ahead, but I don't think it is helping your credit score in anyway. Keep paying off those darn interest charging bills and you will be money ahead in the long run. Great job, and you are not dumb! :) Have a great weekend!

~leanne

~leanne

deciding to be happy doesn't mean that everything is perfect, but that you had decided to look beyond the imp

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