Out of curiosity, how low would that dollar amount have to be for you to opt to spend it on something else? Would it still go to debt if it was only 1,000 or something?
I think 1000 or 2000 for me. I know it’s optimal to put it on my mortgage but that’s an amount I would use the excuse of “having to spend it” to spend it on myself. 20k in cleared debt is like 1.4k yearly expense reduced which really moves the needle. If you pay off 1k a month you’re effectively increasing the payoff rate by 12%.
It’s probably highly specific to how much money somebody makes. If my monthly paycheck is $2000, and you give me $1000, I would use that to get ahead by a half a month. If I make $10k a month and you give me $1000, getting ahead by a tenth of a month won’t do much. So hookers and blow all day.
I guess if it was a few hundred, I would just put it in the bank with the rest of my money where it would go towards food, bills, and any other day to day expenses. Probably anything over $1000 would go directly towards debt.
EDIT: I forgot about the by the end of the day rule. I can’t just save it for later. We’d do a Sam’s club run and put the rest towards a bill.
Out of curiosity, how low would that dollar amount have to be for you to opt to spend it on something else? Would it still go to debt if it was only 1,000 or something?
I think 1000 or 2000 for me. I know it’s optimal to put it on my mortgage but that’s an amount I would use the excuse of “having to spend it” to spend it on myself. 20k in cleared debt is like 1.4k yearly expense reduced which really moves the needle. If you pay off 1k a month you’re effectively increasing the payoff rate by 12%.
It’s probably highly specific to how much money somebody makes. If my monthly paycheck is $2000, and you give me $1000, I would use that to get ahead by a half a month. If I make $10k a month and you give me $1000, getting ahead by a tenth of a month won’t do much. So hookers and blow all day.
I guess if it was a few hundred, I would just put it in the bank with the rest of my money where it would go towards food, bills, and any other day to day expenses. Probably anything over $1000 would go directly towards debt.
EDIT: I forgot about the by the end of the day rule. I can’t just save it for later. We’d do a Sam’s club run and put the rest towards a bill.
It’d have to be less than a hundred for me personally. A grand less debt? That’s a nice feeling