Kind of a strange title for today. Where do you save money by paying more?
Wherever you owe money.
For us, that’s a mortgage. Nothing like over a hundred grand sitting on you to make you want to save money somehow. We put an extra $50 on the mortgage every month. It’s not much! (compared to over a hundred grand?) It’s $600 extra a year.
Here’s where it gets exciting though. A 30 year mortgage of…. say…
$140,000 at 6% interest will cost you $162,174 in interest, not to mention paying off the 140K you started with! The banks KNOW how to make money. If you were to pay off this mortgage with just $50 more per month, you’d be saving $26,349 in interest!!! (Thank’s, Karl’s Mortgage Calculator!)
If you’re paying more than 6% interest…. say on a credit card… it’s even more pronounced. Working on paying off debt? We have been really encouraged and motivated by Dave Ramsey and The Total Money Makeover. Check out his 7 baby steps to financial freedom. Takes commitment! We don’t always do what Dave says, but we take his advice seriously when making decisions.
What do you do to keep more of your money?