Want a little motivation this Thursday for paying off those debts? I suggest playing around with a loan interest calculator. Just google “loan interest calculator” (I used this one), plug in the numbers, and play around. I think it’s easy to feel like making small extra payments each month is a futile effort- especially if you have a huge amount of debt like me. But you guys, it’s not! Like at all!
For example, I put in my $90,000 of debt at an average of 7.9% interest and calculated that, making just the minimum payments, I will end up paying almost $83,000 in interest over the course of the loan (what?!). But, if I increase my minimum payments by $500/month the interest over the course of the loan would be reduced to $32,000 (yes, still a lot but so much better).
Now I recognize that $500 is a lot extra per month, so I tried the same exercise, this time increasing my payment by just $25 per month. Guess what? That small amount extra would reduce the interest over the course of my loans to $76,000- saving me almost $7000. Just by adding $25 per week! So there you go, if that’s not inspiration to pitch some extra dough each month (no matter how little) to your debts, I don’t know what is.