Good Morning Readers,
As I was going through the financial blogs I read daily I saw a great article at www.DelieverAwayDebt.com in which he explains how cutting out a coffee a day can have a major impact on your finances.
While the article is true and the math can be staggering as you extrapolate out the data I was reminded of the Quicken Personal Finance podcast I had listened to just last week. The podcast had on a financial planner who said that people get to wrapped up into the nickel and dime savings of day-to-day living and that it should not be the approach 90% of people should take to start saving money.
His argument is that if people would spend the same amount of time and energy on the major life decisions (Insurance providers, home mortgages, car loans, etc) shopping around for the best packages they could in turn save thousands upon thousands of dollars which in the long run may make that $4.00 mocha you are enjoying less of a strain on your daily finances.
Below you will find an example of how just a bit of interest rate shopping could potentially have a HUGE impact on ensuring your family’s financial peace of mind:
|Home Value||Down Payment||Loan Amount||Interest Rate||Interest Paid||Cost of Loan|
- Down payment 20% of loan value
- Minimum Payments
- 15 Year Fixed Rate Loan
Now using DeliveringAwayDebt’s math of $5.00 a day in latte’s costing you $1,825 a year by spending some extra time shopping around for your home loan you could potentially have coffee with no net change in your financial picture for 7 years and 9 months.
The take away from this article is that watching for the nickel and dimes can have a significant impact. Just be wary of getting caught up in the little details and miss the big financial decisions that could have a much larger impact on all aspects of your life.
Question to Readers:
Have you ever missed a major financial decision that you wish you could go back and change? Got locked into an interest rate that killed your monthly budget down the road? Please share your stories in the comments.