Live Debt Free

Pay off debt. Save. Give. Live your mission.

How Much Interest Are You Paying?

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How Much Interest Are You PayingHow 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.

How Much Interest We’re Paying – March 2011

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Every month I calculate how much interest we’re paying toward our debt.  I figure the monthly and daily numbers and compare them to past amounts.  I display them publicly as an exercise in motivation and accountability.

I hope the exercise will motivate you to do the same and have made available the spreadsheet I use to crunch the numbers.

How much interest in March 2011

In summary, the interest on our debt cost us $1,042.41 this month which amounts to $33.63 daily.

Compared to January of 2009 when we paid $1,328 and $42.84 daily, we now have an extra $9.21 going into our pockets every day.  Woo hoo!

While the numbers are still $33.63/day higher than I would like them to be, I am very happy to watch them decrease month after month.

Do you know how much interest you pay on debt each month and each day?  Perhaps it’s time you did.

Other thoughts for the day

It’s no wonder that our progress of getting out of debt has slowed since I left my career position back in November of 2010.  Since leaving I been through a lot of emotional ups and downs related to what work I should be doing, what my purpose in life is, and how to best go about serving that purpose.

Here are just a few specifics of what I’m beginning to call my mid-life crisis:

  • First I was going to be a full-time blogger to pay the bills
  • Next I started DFA Missions in an effort to live more purposefully
  • After that I jumped at an opportunity to become a Certified Financial Planner
  • Now I am again pursuing full-time blogging, but with clarified and strengthened  resolve

As you can see, and may have noticed, I’ve been jumping all over the place over the last 6 months… and it hasn’t been easy.  The good news is that the Lord has helped clarify things along the way and I have been moving forward with a combination of several of these things.

Although I dropped the ball on following through with several DFA Mission posts, and in my efforts to grow blogging income to full-time salary replacement numbers… I am forging ahead and excited for the future.  I apologize for my lack of follow through on DFA Missions and will be publishing articles to update you on the progress.  While I failed miserably with The Bible Mission (reading 23 chapters of the bible each day,) The Wardrobe Mission was actually very successful.

I will publish more details about past and future missions soon, and am excited and confident about moving forward with blogging full-time.

As a point of clarity, blogging full-time is better defined as content production and marketing, which is cool because it allows you to get up every day and create something that brings you joy and helps other people… which is my ultimate goal.

Thank you for you patience and prayers, please keep them coming!

How Much Our Debt Costs – March, April, May 2010

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February 2010 Update – How much our debt cost

“He that hath no rule over his own spirit is like a city that is broken down, and without walls.”  – Proverbs 25:28

Over the course of March, April, and May 2010 our debt cost us $37.08/day, down from 42.46/day back in February. This is just the cost of the interest on our debt, and does not include the principal amounts.  That said, when we started our debt free adventure back in January of 2009 we were paying $1,328 – which was $47.43/day.  Our debt reduction efforts over the course of the last 17 months are saving us nearly $10 every single day… money we now to funnel into our Capital One 360 Savings account to pay us rather than fat cat bankers!  🙂

I love thinking about how much more we can save because of how much less we owe.  Hopefully this motivates you as much as it does me!  Let’s take a look at the individual interest breakdown then talk about the progress in greater detail.

Here is the comparison between the last two months:

February 2009 Interest PaidMarch 2010 Interest PaidApril 2010 Interest PaidMay 2010 Interest Paid
Mortgage 1 – $584Mortgage 1 – $583 = +1Mortgage 1 – $582 = +1Mortgage 1 – $0 (refi – free month)
Mortgage 2 – $292Mortgage 2 – $292 = 0Mortgage 2 – $291 = +1Mortgage 2 – $291 = 0
Student Loan 1 – $160Student Loan 1 – $144 = +14Student Loan 1 – $199 = -55Student Loan 1 – $112 = +87
Student Loan 2 – $120Student Loan 2 – $120 = 0Student Loan 2 – $105 = +15Student Loan 2 – $111 = -6
Lending Club – $33Lending Club – $0 = +33Lending Club – $0Lending Club – $0
Total Interest Paid – $1,189Total Interest Paid – $1,139 = +50Total Interest Paid – $1,177 = -38Total Interest Paid – $514 = +81

A few notes about the details of the numbers…

  1. We’re down to just four debts. Back in March we paid our Lending Club loan off and are left with four debts.  1st mortgage, 2nd mortgage, my student loan, and her student loan.
  2. Somebody screwed up. Although student loan interest varies each month, mine varied much more than expected over the last 2 months.  Why?  Either my student loan company, Capital One 360, or I myself screwed up.  I have auto payments set up for all of our remaining debts, including my student loan.  Regardless of this, and despite the fact that I have $1,000 worth of overdraft protection on our my bank account, Capital One 360 reported insufficient funds to my student loan company when they attempted to auto-draft the payment.  The result?  A spiked interest payment for the month of April.  Although I know I should have, I never called Capital One 360 about this.  The draft would have overdrawn my account by just a few dollars, but instead failed to go through… not sure why.  I normally carry a $1,000 checking cushion but let that dwindle too far down and ended up paying for it in higher interest costs, along with a $15 late payment penalty from my student loan company.  *sigh*
  3. Side hustle earnings still growing but could be higher. Thanks to continued earnings across the board and bloated TurboTax affiliate numbers through tax season our side hustle earnings reached nearly $2,000 in April, and were closer to $1,500 for March and May.  Although these earnings are great, my decrease in posting frequency has hurt my income growth potential and I really need to bust my butt to get back on track here.
  4. Home loan refinance allows skipped 1st mortgage payment. Because we refinanced our home loan back in April our 1st mortgage lender allowed us the opportunity to skip our mortgage payment for the month of May while they paid off the old mortgage loan and opened the new mortgage loan.  While this did free up a good amount of money, we were not able to save it all or put it all toward debt repayment because of a few unplanned expenses.  Our budget has since been updated to compensate for similar future budget mishaps.
  5. Lapse in discipline. Although it isn’t easy to admit, we have had a few lapses in self-discipline over the last few months.  These lapses have resulted in less scrutiny toward spending and less attention paid to my blogging.  I am angry that I let either transpire and while our lapses were minute and affect our bottom line very little… they need to be acknowledged now and avoided in the future.
  6. Overall outgoing interest is way down. The average amount of monthly interest on debt we are paying now is $200 less than when we started out debt free adventure!  That is music to my ears and just the motivation I needed to kick things into high gear again.

The “How Much Your Debt Costs” Spreadsheet & Graph

Don’t forget to check out the spreadsheet I created to calculate how much our debt costs complete with the nifty little graph allowing you to visualize your progress.  I call it the How Much Your Debt Costs Spreadsheet… check it out.

The spreadsheet also highlights monthly interest amounts paid in BIG BOLD numbers so you can print and stick them on your fridge.