Based on your comment, you still have the mindset of someone living paycheck to paycheck.

Once you have a one-month buffer in your checking account, when you get paid and when expenses are paid no longer matters.

Jumping back and forth to try to maximized gains and avoid losses is called "market timing," and it is a bad thing. Mostly because for market timing to work, you have to accurately guess when the market hits the top, and accurately guess when the market has hit bottom (so you can buy back in). Getting either one of these guesses right is extremely difficult, getting them both right is impossible.

If you're young and have decades for your nest egg to grow... stay mostly in stocks. If you're close to retirement you should be invested in a roughly 50 / 50 split between stocks and bonds.

If you haven't heard the story before, you should meet Bob, the world's worst market timer.

I moved out of the dorms half way through sophmore year. I had to work full time during school, and having to wake up and be to work at 6:30am every Sat and Sun doesn't mesh with dorm life. There were pros and cons to this. I had no RA babysitting me, I saved money, had more privacy, and my place was much nicer. The downside was I was disconnected from campus life, I had to navigate shared expenses with other people, and didn't have all the support infrastructure next door like the cafeteria and library.

I didn't have much choice, but if I got a redo I would have rather stayed in the dorms for 3 years and transitioned to an apartment senior year.

Right! I just meant I want to make sure I’m keeping the card active every month rather than treating it as a “last option” and ending up with holes and dry spells in my credit history

Yes, you have to actually pay extra in the same month after the normal monthly bill is paid. See my edit for example.

I think I chose bad wording, rather I’m looking at how credit should impact the logistics of how the budget is paid/distributed, what things it makes sense to move from one checking account onto a credit card to be paid at the end of the month rather than immediately.

By “wanting to build credit” I just mean having consistent payments and balances month to month rather than say saving the card in case of emergencies or large purchases that would leave dry spells or holes in my credit history.

I do think your explanation though lines up with more of what I meant to say, if I should stop using the checking account for immediate purchases but rather defer them to the credit card and treat the checking account as the “credit card balance budget” that I use to pay off the balance every month

[removed]

Correct. The reason that biweekly payments shorten the duration is that there are 26 biweekly payments in a year, so if you do half of your monthly payment each time, you are effectively making 13 monthly payments per year instead of 12.

Looks like you’re setting yourself up very well already. Low expenses with a solid starter salary. Kudos to you!

Given you don’t have many expenses, I’d suggest maxing out your pre-tax 401k (match from company?) and a post-tax Roth IRA. If available, also max out a pre-tax HSA account. Total for 2023 is $22500+$6500+$3850 = $32850. At $75k, this won’t leave you with much money at the end of the year, but it should be enough given your current expenses. Should leave you with ~$2500/month (inclusive of above described pre/post-tax contributions, medical/dental contributions and income taxes). What are your current monthly expenses? With the remainder, you potentially could start building an emergency fund and/or savings/brokerage accounts.

Live with your parents for as long as possible, while also working on ways to increase your market value (additional education, learning a unique skill, networking). For a SWE, it seems like you should be able to get to $100k/year pretty quickly/easily.

Using the card more does not build more credit. Don’t fill up the card, do pay it off every month and your credit will slowly rise.

Ah ok, didn’t know that, thought it was calculated constantly. So really the only way to shorten/pay less interest is making extra principle payments

Your budget is income - expenses = savings. Credit doesn’t change that at all, it’s just another way to pay for something. The moment you start thinking credit is extra money in your pocket is the moment you start a painful and expensive lesson in debt and interest.

Short answer is, that it changes nothing on your actual budget.

Longer answer: I would recommend using a credit card like a debit card, so that for any purchase you make, you are setting aside money so that you will 100% make sure you have the ability to pay the bill in full for the spending you did last month.

Your wording scares me a bit that you might not be a good person to use credit cards responsibly, and that's ok. If that's the case just use the credit card to buy gas or a cheap subscription service, set the bill on auto pay and be done with it. This will build your credit just as fast as if you were to use the card for the majority of your monthly spending.

First year in the dorm, it's a totally different way of life and to make friends you have for life. Second year move into an apartment. Sounds like you are in second year so it's time to move off campus and leave the dorm available to first years. Yes a year long lease is required but that so you can get a summer job in your new city and have this as your first full year away from mom and dad.

Ok I think I understand, I thought the wisdom was to keep the balance to what you can pay by the end of the month. I’m not suggesting I increase my budget for x BECAUSE of credit but rather suggesting if it would be a wise choice to “replace” my usage of the “variable” debit card with the credit card so that by the end of the month I have a full pay check stashed away to use to pay off the credit card amount RATHER than the current system when I have half a paycheck every 2 weeks, with the first “2 weeks” having a fair portion going immediately to bills. Obviously there are ways to budget around this so it doesn’t feel like I have significantly more money in the second half of the month than I do in the first half but I wonder if it would be easier to think and plan around those expenses using a credit card — although perhaps just moving all my utilities into the card all together would be easier? And then just using the $200 or so saved on the “static” account to go towards the credit balance EOM ?

It doesn't change interest or how soon you pay off if the payment amount per unit time is the same. Mortgages don't calculate interest constantly so it doesn't matter if you pay on 1/7/23, 1/14/23, 1/21/23, 1/28/23 instead of all on 2/1/23.

Lender simply expects the monthly bill paid by the due date. You can split required payment into multiple pieces on multiple days before the due date, or stay with one. If you pay extra, then the extra reduces principal for the subsequent monthly bills. Doesn't matter when inside the month you do it.

For example, if you split a $1000 bill into $250 pieces and pay weekly, then you'll be paying exactly as scheduled (not early, not late, and no extra payments) for most months. However, every year has 4 months with 5 weeks. In those 4 months with one extra week, the 5th payment is considered "extra payment applied to principal", reducing the duration of the mortgage.

Forget the credit card when budgeting.

Use it for daily purchases that are already in your budget.

Pay it off in time.

The credit line is not extra money. It’s $0 additional dollars. It’s just a pass-through so that you don’t pay cash or need to use your debit card.

No matter what you choose, give your dad a big hug and thank him for his support!

Your post has been removed because it is a poll, survey, or question that asks others to answer for themselves (rule 1). Posts asking for advice should be specific to your situation, not hypothetical or improbable, and include enough information for people to help.

• If you would like to post a poll or survey, consider /r/samplesize.
• If you would like to post an open-ended question not specific to your situation, consider /r/AskReddit.

For example, instead of a post asking "How much do you spend on food?", please ask a question like "I need feedback on my monthly budget (having trouble with food spending).".

If you have questions about this removal, please message the moderators.

I don’t change my plan. Whatever allocation and if timeline you had you stick to.

[deleted]

You can build credit without carrying a balance. Keep your credit utilization low (less than 30%, even better if you can do less than 10%) at the end of your billing period. You may want to make mid-month payments to achieve this.

Request a CLI at whatever interval the card issuer will allow you to (usually 6 or 12 months) - that will also help you keep your utilization low.

Spending money you don’t currently have in your checking account is a slippery slope and will likely end up hurting your credit in the end.

I think what they were saying is that you should create your budget independent of your credit. E.g. your income of $x,xxx with $xxx going into savings, $xxx for expenses, etc. The only time your credit comes into play is using it to pay for those already budgeted expenses. I cannot stress enough that you should only put what you can pay off immediately on your credit card to avoid carrying a balance and creating debt. Even by putting small purchases on your card will build credit if you pay it off in full at the end of the cycle.

All your credit card is, is the reverse of a checking account. You’re allowed to spend first and put money into it later.

Your budget is still determined by your income. What you spend using the credit card needs to not exceed what you bring in each month. But things like grocery, internet, phone, heat, electric can probably be paid with your credit card.

Likely, you need to move from budget by account to a written budget so that you can track your credit spending.

> I haven’t used the card for much yet but would like to build credit.

Only requirement to build credit is to pay obligations on time. You don't have to carry a balance to build.

> I’d also like to pay things off in a fair amount of time

21 days is a fair amount of time.

> so I can cover both smaller expenses but also larger expenses by freeing up credit easily

You have savings. Use it. It's very expensive to borrow with a credit card past the due date.