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Money Saving Minute #033 – Dollar a Day
What can a dollar a day do for you? A dollar might get you a cup of coffee, it might
buy a music download OR it could get you out of debt.
As we all know, term loans and credit cards charge interest by the day. By accelerating your payments by as little as a dollar a day, or $30.44 per month, a borrower will pay off their loans faster and save themselves money on interest. Let’s take a look at a few examples.
MORTGAGE
$150,000 financed over 30 years at 5% interest.
In this example if a borrower were to faithfully pay an extra $30.44 toward the principle of the loan the borrower would save almost $13,000 over the term of the loan as well as have the loan satisfied over two years early.
AUTO LOAN
$20,000 financed over 5 years at 6% interest.
In this example, an extra $30.44 per month would save the borrower more than $250 over the term of the loan as well as have the loan satisfied 10% early.
CREDIT CARD
$2,000 balance at 18% assuming a $50 minimum payment
In this example if a card holder were to faithfully pay an extra $30.44 toward the principle of the balance each month the borrower would cut the time it takes to pay off the account as well as the interest paid by 50%!
There are workbooks available to help you calculate what a dollar a day will do for you and your financial health. The workbooks and information are free so please help yourself to any that will help you.
