In my last post, I talked about the accrual adjustment which can have a ripple effect across your wealth. In simple terms, if you make more money, you can pay off your debt quicker. If you make less, you have an adjustment period where you can start to pay off your debt sooner.
Accrual adjustment, or accrual management, is the process of managing your debt over the course of time. When you make more money, you pay more towards your debt each month, and then when you make less, your debt is paid off a bit quicker by the same amount. Accrual management is also the process of figuring out what that amount is, so you can decide whether you’re going to pay it off more quickly.
Accrual management is a little tricky. If you make more the next month and then make less the next month, your debt is paid off a little quicker each month. But if you make less the next month and make more the next month, then your debt is paid off a little faster each month. So if your monthly debt is $100, you could pay off your debt faster if you make $100 in a month.
The Accrual Adjustment is usually calculated in the same way we do with our credit card payment. You first calculate your payment amount, then you work your way up to the full payment amount.
The Accrual Adjustment is a great tool to use when you’re trying to figure out how much you need to pay each month. It shows how much you can afford to pay each month and also allows you to pay it off quicker if you have a little more money in your bank account.
I have never been able to figure out the formula for calculating it, and I don’t know exactly how it works, but I still use it every month to determine how much I need to pay each month.
It’s actually not complicated, but you need to add two things into your calculation. One is a monthly statement that shows how much you’re making per month. The second is how much you have in your bank account per month. In my case, the monthly statement shows me that I’m making $1,937.83, but then I add up my bank account that is $7,133.33 which puts me at $2,078.00 a month.
This month my bank account has gone from $4,023.64 to $4,017.16. My total monthly payment has gone from $2,980.00 to $2,977.68. That is a $0.28 savings.
The problem is that you’re saving more than you should. The accrual adjustment is supposed to be the difference between how much you have in your bank account and how much you’re making each month, but if you’re making so little that you are actually paying less than you should, you should certainly be making less than you should.
Accrual adjustment is supposed to help your bank account balance. If the adjustment is too large, the person with the highest accrual adjustment account balance goes into debt and pays a higher interest rate than the person with the lowest accrual adjustment account balance. If you want to go to a good credit repair debt counselor, this is a very good time to do so.
