Prosper update, Saving tips

So I was outbid for the loan I bidded at 22%. Not wanting to lose too much time, I found another suitable loan with a relatively low debt-to-income ratio (DTI) for the credit grade (it was a C) and bidded at 18.75%, which is still higher than my average rate for the other two loans. I found out last night that I won at 19.30%. Now I just have to wait for prosper to verify documents with the borrower and finalize the loan before I start getting monthly payments. This should increase my monthly portfolio income cash flow by $0.50. This puts my total passive income at roughly $10.25/month.

Now, you might wonder how a 26-going-on-27 year old living on his own with a car loan, student loan, and consumer debt finds cash to save. After years of fighting consumer debt from bad decisions in high school and college, I've picked up quite a bit of saving tips.

I use Microsoft Money to track all my finances, and one of the things I do is I create a "payment" to myself. Every pay period (for this job, it's weekly), I increase it by $5.00 and update the date so it stays in my recent activity. Now when I look at my balance it shows I've spent $5 when it's actually still there (I actually now have $500.00 via this method that I keep around for emergencies). I do this for credit card purchases too; as I enter the expense into my credit card account, I increase the "payment" to that card by the appropriate amount. When I actually pay that credit card bill, I either drop the amount by the payment or delete the line all together. This not along makes me realize the money is spent when I swipe my credit card, this ensures the money is in my checking account when the bill comes. Other things I use it for are my car payment (I prorated the monthly amount to a weekly amound and increase the "payment" every week), my kung fu class tuition, and other bills.

I also transfer money to my INGdirect accounts every week. Once it's out of sight, it's out of mind. My checking account doesn't pay me interest, so I try to transfer most of my money out of the account except for money for the week and bills. INGdirect also has a checking account called Electric Orange. I have a couple of credit cards that are paid via that account, so when the statement comes, I transfer the money from my checking to my Electric Orange account. Then I schedule the credit card to draw the funds a couple of days before it's due. This allows me to get some interest on the money while it sits in the Electric Orange account.

I think one of the main ways I also save is that I almost never use my change. I start the day with zero change, and any change I wind up with at the end of the day goes into a jar. When the jar is full I take it to Coinstar to be counted or if I have time, I count it myself. Sometimes I pay my sister $5 to have it counted (it feels better paying family than Coinstar). The money then either goes into my savings or other accounts; recently I've decided I should add that money to either my ING account or my propser account to be loaned out.

So in total, I save $200-$250/month. I contribute 5% of my gross income to a 401k account, but I don't count that money as I won't be seeing that for quite awhile.