TIP 3: Deposit In, Take Money Out

Instead of using your checking account to manage your money,

let's use your BLOC as your primary money account.

Understand these concepts:

• the BLOC is not a savings account
• the BLOC functions as a tool to drive the mortgage pay-down plan
• your BLOC cannot drop below a zero balance
• payments made into the BLOC will force an adjustment to the principal balance

BLOC Account Starting Credit Line Balance: $60,000
Date	From	To	Advance from BLOC	Payment to BLOC	Ending Balance
July	BLOC	Payoff Credit Card Debt	$3500		$3500
July	Pay	Deposit Paycheck		$2500	$1000
July	BLOC	Pay Mortgage	$1250		$2250
July	BLOC	Living Expense	$1000		$3250
July	Pay	Deposit Paycheck		$2500	$750
July	BLOC	Pay Auto Loan	$500		$1250
July	BLOC	Living Expense	$500		$1750
July	BLOC	Living Expense	$750		$2500
Total			$7500	$5,000	$2500

 

What Does This Show

Line of Credit Available:	$60,000
Pay Credit Card Debt	- $3,500
Pay Living Expenses	- $4,000
Balance Owned	- $7,500
Deposit Payment	+ $5,000
Ending Balance Owned	- $2,500

• Your Starting Balance was $3,500
• Your ending balance was $2,500
• you never made a schedule payment to the BLOC:
  your income represented your monthly payment
• you borrowed $7,500 from the BLOC
• you will only pay interest on the average daily balance of $2,500
• you paid no interest on the $4,000 living expenses
• your BLOC become an interest cancellation account