February 2010 Update – How much our debt cost
Over the course of February our debt cost us $1,189 – which is $42.46/day. That does NOT include the principal costs… that is just the cost of the interest on our debt. The good news is, one year ago we were paying $1,328 – which was $47.43/day. Our debt reduction efforts over the course of the last year are saving us nearly $5 every day! That may not sound like much, but if I were to put $5/day into my Capital One 360 Savings account, by this time next year I would have $1,825 plus any interest earned!
One of my least favorite things to think about is the amount of interest we pay toward debt each month. The good news is that it is shrinking with each passing month. Pretty soon all the money we line others pockets with will become our own… it’s just a matter of time, sacrifice, and hard work. What a concept eh… being able to keep the money that we earn rather than paying it toward interest on debt!
Here is the comparison between the last two months:
|January 2009 Interest Paid||February 2010 Interest Paid|
|Mortgage 1 – $585||Mortgage 1 – $584 = +1|
|Mortgage 2 – $293||Mortgage 2 – $292 = +1|
|Student Loan 1 – $160||Student Loan 1 – $160 = 0|
|Student Loan 2 – $117||Student Loan 2 – $120 = -3|
|Lending Club – $51||Lending Club – $33 = +18|
|Total Interest Paid – $1,206||Total Interest Paid – $1,189 = +17|
A few notes about the details of the numbers…
- Lending Club will be GONE next month! Unless something unforeseen happens we will have this debt paid off with our March payment! That will mean we repaid this $11,000 loan in just 7 months! We reduced this debt by $2,300 in January 2010 and by $2,318 more in February 2010 – because of this, the interest we pay to Lending Club decreases significantly every month.
- Student loan interest amounts vary month to month. As promised last month, I wrote a post detailing how student loan interest is calculated to better explain why the amounts vary so much each month.
- Side hustle earnings continue to fund large debt payments. Once again this month, the earnings from our side hustle have enabled us to make huge strides in repaying our debt.
- Killing debt creates great motivation. I hope this article makes you think… and if you are not currently tracking how much your debt costs you each month hopefully it motivates you to do so. Think about it – right now we are paying nearly $1,200 just in interest on our debt. This makes me sick to my stomach, but it also lights a fire under my britches to keep going full-speed-ahead!
The “How Much Your Debt Costs” Spreadsheet & Graph
A few months back I released a spreadsheet that does all the above calculations for you and also gives you the nifty little graph allowing you to track your progress. I call it the How Much Your Debt Costs Spreadsheet… check it out.
The spreadsheet will also give you the interest amounts paid for each month in HUGE BOLD numbers for you to print off and stick on your fridge.