Question re. settling finances at month end

[Lindahfx]

We're starting a major debt diet and are focusing on credit card debt. I'm tracking the balance of credit cards at the end of each month. There is a balance on one credit card that is very temporary and will be paid off before the end of next month. It was just the most convenient way to pay for the item at the time. Should I be including this with our total debt? I guess this also includes expenses for travel through work. We have to use our personal ccs to pay for our travel and are then reimbursed and pay off the card. Should I be including these types of amounts when I am reconciling our month end cc balances to show how much debt has been paid down? I feel that these amounts aren't truly reflective of our cc debt as they are just an in/out thing on the card. What do you think?

[tinapbeana]

personally, i would allow a 1 statement 'grace period' to yourself when it comes to these types of charges. basically, i wouldn't include in my debt calculations the first month it appeared on a statement, but i would the second month because that's usually when you're now paying interest for it.

[disneysteve]

I think it depends how tight your budget is currently. Ultimately, you need to account for every penny somewhere. Even though you will get reimbursed for the work charges, for example, you still need to be sure you have the money on hand to pay the bill when it comes. If you leave those charges off your tally, you could come up short on funds when the bill is due and that would be a problem. So I'd suggest including all outstanding charges on your debt total to avoid that.

[ktmarvels]

We use our card to buy everything, but then pay it off each month. For us it is more like a glorified debit card. Sounds like that may be the same with you. I don't consider the balance that our card caries between statements credit card debt.

[jmjj215]

If it's a debt w/o a revolving balance, I wouldn't include it in your diet calculation -- provided the money is just sitting there...

[wellheeled]

I put the outstanding balance of my credit card in my liabilities section when calculating net worth - but I don't count the purchases that I've made on CCs but haven't shown up on my account yet.

[LuxLiving]

I don't count them as debt as I automatically deduct the charges in the checkbook as the purchases are made w/ a notation of 'CC' in the check number area of the register - to me it is money already spent.

I just go back and check them off the register when the bill is autodrafted or write the check number when I send a check to CC company.

If an emergency came up and I needed a cash influx in the worst sort of way, I could add that number back to the register and go forward and then carry the balance on the credit card as revolving- but I won't, , because we have an emergency fund that's fully stocked these days and I'm resolved not to carry a balance on the cards.

[Ima saver]

I pay off my balance each month, so I count that as zero credit card debt, even tho my husband charged almost $4000 to the credit card last month. I would not count work expenses if they are paid off each month.

[DUMPLINS]

I agree with Disney Steve!

[Lindahfx]

Thanks everyone for your comments. I have decided not to include it as cc debt. However, if the balance runs into the following month, then I will include it. It's a bit of a strange reason but right now I need to believe that we have paid off the higher amount in cc debt in May. If I include the amount on the card that we will be paying off in the next few weeks, we would have only paid off $385 verus the $786 I am now showing. I need the motivation of having paid off the higher number right now. It's all about mental belief and commitment for me right now

[disneysteve]

Originally Posted by Lindahfx

If I include the amount on the card that we will be paying off in the next few weeks, we would have only paid off $385 verus the $786 I am now showing. I need the motivation of having paid off the higher number right now.

Despite what I said earlier, I think this is perfectly fine. I, personally, don't include current CC balances as debt because I know I will pay the bills in full each month.

[autoxer]

When I want to know how much debt I have, I include it all, whether or not it is accruing any interest. It's still a liability. Like when I do my monthly net worth statement, I want it to be a very clear & honest snapshot of where I stand. I can't balance it against future income, but not consider it debt. I have been paying in full each month, but that doesn't change the fact that I owe ~$700 at the moment. If I tricked myself into believing that I was debt free, then I would probably charge too much to pay off in one month.

I look for motivation in my goals when the progress seems slow. I know that some months I will make a lot of progress & some months will have setbacks, but neither one will affect how hard I'm trying to reach my goals.