A little extra (budgeting)

I blinked and November left me. It is the dawning of a new month and a new set of bills. The mortgage is still one that I write out by hand, no online banking for the house. Again this month we decided to send in a few extra nickels and dimes. Every little bit extra sent in goes straight to principal and pays the loan off earlier than designed.

Depending on your interest rate, I have read just one extra payment a year (13 instead of 12) gets your loan finished about 7 years early. That early finish saves you thousands of dollars in interest. Send in more and it goes away even faster. A side note. I have had friends ask me my feeling toward the bi-monthly payment programs that basically works out to an extra payment a year it is just someone else managing the effort. As Nancy Reagan once said, “Just say no.” Most of these programs charge some kind of fee. If you just send in extra every month on your own you accomplish the exact same thing only there is NO fee. (Check with you loan provider to see if you have to specify that the extra is to be applied on the principal or not.)

Sending in a little extra gives me a little feeling every month of goodness, of controlling my money and future. That’s why I still put it on a check. I like to see the extra in writing on paper. I joke with my wife that one day we are going to wake-up and there won’t be a house payment. I create grand ideas of what we will spend all that money on when we don’t have a house payment down the road. Those little visions keep me motivated every month. So again this month licking the envelope I thought the same thing as months past, here’s a little extra and one more step toward freedom.

Click comments and let me know if you do or don’t send in any extra and why?

That’s it for today. Remember; happen to things instead of always letting things happen to you. And as always keep your eye on your EveryDay Money.

part 2

part 3