How Much Interest Are You Paying?

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How much interest are you paying on your debt?  Most people never stop to think about it… yet the answer drastically affects their financial lives.

I’m talking specifically about how much money you pay to finance your debt.  If you have a mortgage, student loans, auto loans, and/or credit cards you are likely paying interest on all of that debt.  How much interest are you paying per year?  How much per month?  How much per day?

If you know the answer to this question you will know how many hours/day you have to work each day just to cover the interest on your debt, and I guarantee it will motivate you to get out of debt faster.

Use the spreadsheet I use to figure it all out…

How Much Interest spreadsheet

Use this spreadsheet to determine exactly how much interest you are paying each month and to track your progress.

The spreadsheet includes:

  • The Data Sheet – This is the main sheet where you input the data and see all the calculations take place.
  • The Chart Sheet(on Google Docs version only) This a cool chart that graphs out your monthly progress over the course of the year.
  • The Print Sheet – This sheet pulls your monthly interest amounts, puts them in bold red font for you to print off and stick on your fridge.  This will help motivate you and your family to continue to destroy your debt!

How Much Interest – Google Docs Template

How Much Interest – Microsoft Excel Template

How Much Interest – OpenOffice Template

How much interest are you paying?

Let us know how much you’re paying by leaving a comment… and if you have feedback on ways to improve the spreadsheet, please let me know.



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1 Katherine

Can’t find template for excel

2 Matt Jabs

Link fixed! Thanks Katherine.

3 Lydia aka Ms. MoneyChat

it’s very simple and user friendly!

4 FreeMyInterest

I definitely like the visual effect of having a graph to show the distinction. Staring at numbers month to month cna sometimes make you feel like you are making no progress. I borrowed your idea but switched the interest as the lower section so its easier to visualize it decreasing over time. Great job. Thanks!

5 Jeff

I know it’s a few days late for the comment, but I just finished filling in the spreadsheet for all of 2009. It took a little while to get all the data.

HOLY COW!!! I pay alot of interest. It’s very eye opening to see it all on one sheet for the whole year.

I’m crunching some more numbers but the sheet is showing me that I need to pay my 2nd mortgage off first. In my current snowball it’s last. It will save me almost $3,000 in interest to move it to the front of the line. Moving me 2 months closer to debt freedom by doing so.

I know Dave says don’t do it. But Mr. Ramsey also knows that his message is about behaviors. We’ve crossed that bridge and are working on straight mathematics now.

So here’s my feedback on the spreadsheet Matt. I love it. It’s such a simple tool but once someone understands what it tell you, it’s soooo valuable.

Thanks a ton,
Jeff@deliverawaydebt

6 Elysia

Matt,
This sounds like a great exercise. I’m sure I’ll find it terrifying.
Best, and great site!
-elysia

7 Matt Jabs

Thanks Elysia… and make sure to do use the spreadsheet, it may be a little scary, but it will help so much in the long run.

I promise you’ll never view your debt the same way again! Which is a great thing :-)

8 Elysia

Matt,
Well, I’ve been working on debt reduction just since last April, and even that has definitely helped how I look at debt, but these calculations add a level I’d missed before. Although happily I can see that at *least* we’re paying more in principal than in interest, the amount of interest we pay per month looks like it’s only gone down 189$ per month in the last year.
I have managed to get rid of one credit card and have hopes of eliminating another this year, which should help. I almost wish we had those little debts here there and everywhere, those would be a lot easier to pick off. Oh well! At least we’re making progress and I can see the light. I think I might also take on your 75% debt/25% savings ratio. I don’t feel like that $1k emergency fund is enough…

9 Matt Jabs

Good idea. I now advise people to save $1,000 quickly, then switch to the 75/25 method until your Emergency Fund is funded with one month worth of expenses, then switch to either 100% debt reduction or whatever ratio you’re comfortable with.

Even if you decide to make your ration 95/5… I think it is always a good idea to pay yourself at least something. It’s just a good habit.

10 Michelle

We did the 75/25 with our ‘snowball’ until our 1-month buffer (we use YNAB) was filled. Being able to live 2 paychecks ahead has freed up so much cash/relieved so much stress. Thanks for giving this advice…people should really benefit from this approach.

11 Matt Jabs

Thanks Michelle, glad it works for you too. Like you said, the added security is a fantastic feeling – especially when we’re in the midst of a down economy like this.

12 D R @ Motivating Minutes

I’m happy to say I’m paying $0 currently as I’m currently debt free and paying off my cards in full as I get the bill. However, I have been noticed recently one of my two credit cards is beginning to charge an “international transaction” charge for things I buy online. Anyone else notice this?

13 Matt Jabs

Congrats on the freedom from debt! I’m envious, but should be joining you within the next few years.

Credit cards? I quit trying to navigate their tricky waters years ago… mostly because of the tricky plays like you mention here. Close ‘em & shred ‘em and embrace cash and debit! :)

14 Debt Donkey

Wow, what a sobering exercise! I have not done the spreadsheet yet, but an informal tally puts me at about $25 a day. It could be worse, but $25 a day just in interest surely does motivate me to knock out my debt as fast as I can. Thanks for suggesting this little exercise, and congrats on getting your debt down to where it is. Keep up the great work!

15 Matt Jabs

Thanks… and yes, very sobering exercise which is why I am continually suggesting it to people. Until we see how much debt costs us monthly (and even daily,) then compare that to how much income we bring home, and calculate how many hours we have to work each day to cover it (remembering to calculate in weekends and days off because debt never rests,) our opinion of debt WILL change!

16 Elysia Confusian

I’ve been using this spreadsheet a while now, and I really appreciate it. It definitely helps motivate — though perhaps I’ll add a calculation for daily amount of interest. No doubt that would be a further kick in the pants. Anyway, we’ve paid off three credit cards and we’re aiming for a no debt/no interest life!!!
One column I did add was to show the difference between the principal and interest paid (just so I could see that yes, I was indeed paying off more principal, even when it didn’t feel like it). It gives an extra boost when we manage to throw a chunk of money at debt :-)
Happy Trails!

17 Matt Jabs

Excellent suggestions Elysia. I too have made some changes to my personal copy of the spreadsheet, and am thinking of releasing a “version 2″ to give everyone access to them, and possibly to your ideas as well. Very sweet of you to take the time to give feedback. God bless, and congrats on your awesome progress.

18 Matt Jabs

I wanted to let you know that I updated the template to include daily interest calculation and the calculation showing the difference between principal and interest. Enjoy!

19 Doable Finance

I asked my lender to send me an itemized monthly sheets which they did. You could try the same. Maybe yours will send you too.

20 Matt Jabs

Thanks, good advice for getting past numbers. I already have my numbers all the way back to 2009, since that’s when I started tracking them using this spreadsheet.

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