Step 3: start using your BLOC
use the bloc for deposit in and payments out
Use Your BLOC as Your Money Account
- deposit all income:
all income earned such as pay, cash awards, bonuses, and cash gifts should be deposited (or transferred) into your BLOC.
- Note: do not close your existing checking account. It will continue to function as your bill payment" account.
However, the amount in your checking account should be minimal -- just enough to cover bills being paid and to avoid accidental overdrafts.
Check with your bank servicing your BLOC whether your employer can automatically deposit income payments into your BLOC.
If no, have your income deposited into your checking account. You will then use your online banking to transfer checking deposits to your home equity line account.
Pay All Expenses:
You will pay all of your living expense payments using an advance from your BLOC. This includes:
- your regular monthly mortgage payment
- your utilities bills
- your insurance
- your living expenses
- all other personal expenses
use your bank checking account to make payments - use the BLOC to transfer money into your bank checking account to cover the payments
Begin using a system to manage your money account
You can use a PFM program such as Quicken or Money to manage your account activity. Start by tracking your BLOC for all income deposits and expenses payouts.
- Then advance $5,000 from your BLOC to make a lump-sum payment to your mortgage.
- Manage your discretionary income over time to reduce the $5,000 advance.
- When the balance drops below $500, advance another $5,000 from your BLOC to reduce your mortgage loan balance.
- Repeat the process until your mortgage is paid off.