Comments on: How Much Does Your Debt Cost?

By: Matt Jabs

Matt Jabs — Sat, 28 May 2011 03:41:42 +0000

Glad I could help Debt Dewd… cool name.

By: debt dewd

debt dewd — Sat, 28 May 2011 03:34:33 +0000

Thanks for the idea! I was thinking about how I would go about figuring out how much interest I pay on every dollar I spend and ran across this article doing some research .

Good stuff!

By: FreeMyInterest

FreeMyInterest — Mon, 16 Nov 2009 23:35:56 +0000

I’ve always known how much interest I’m paying per month (down to $830/month from a high of over $1,200 yay!). An engineer’s brain will do that to you. But man, posting that number on the fridge would get me really angry. And likely get the boy on board too. I’ll have to try that. I imagine that one simple act would increase snowflake payments 500%!

By: Matt Jabs

Matt Jabs — Fri, 13 Nov 2009 16:15:03 +0000

@FS – Ha!

I like the way Dave Ramsey puts it… “can we PPPLLLLEEEAAAASSSSEEE borrow some of your money to buy things we can’t afford? Pplleeaassee?”

By: BG

BG — Fri, 13 Nov 2009 16:11:14 +0000

My debt is costing me $600 a month (mortgages), which is $7,200 a year. Being in the 25% tax bracket, means the last $9,600 of my income is going solely to paying interest.

By: Financial Samurai

Financial Samurai — Fri, 13 Nov 2009 14:22:12 +0000

Matt – Are you saying I can’t say “thank you” to the organizations for lending me the money to live a lifestyle beyond my wildest dreams?

By: Matt Jabs

Matt Jabs — Fri, 13 Nov 2009 12:40:47 +0000

So many things are a matter of perspective.

For me, paying $1,200+ in interest on debt every month makes me just about cry every time I think about it.

Imagine if you had to pour $1,200 into car repairs or home repairs every month! No one would do it. We would draw a line in the sand. Well… I have drawn my line in the sand on paying money to be in debt.

My life has changed… big time. And I love it.

By: Jack @ Master Your Card

Jack @ Master Your Card — Fri, 13 Nov 2009 12:29:02 +0000

Very good exercise. It is startling how much it can cost for the privilege to spend more than you earn. I recently took out a personal loan for 1000 and only received 960 off the bat. And if I hold onto it for he full term, I will be paying back about a hundred more than I borrowed. Even on a small scale, debt can be very expensive. Everytime you don’t use credit, it’s like you are paying yourself.

By: SoCal104

SoCal104 — Fri, 13 Nov 2009 04:28:35 +0000

$2,500 for the mortgage interest and that’s it. Strange going from zero payments to having a payment that high but it was the one thing we were willing to go into debt for. Everything else is paid with cash. Working on how to pay down the mortgage early.

With interest rates on investments so low, hard to justify even paying interest on the mortgage at the very low rate that we have.

By: JerryB

JerryB — Fri, 13 Nov 2009 02:10:43 +0000

Last month’s interest paid was $147.50 all of it mortgage interest. In March of this year I paid off the last of my consumer debt (Never again shall I wallow in the pit of burdensome debt).
I’m contemplating taking some of my funds and paying down the mortgage even faster. Do I really need 24 mo of EF spread between Savings, CD’s and non-retirement investments?

By: John

John — Thu, 12 Nov 2009 23:49:05 +0000

For the last few months my interest cost per month was less than $25 for my student loan. I also have some credit card debt that was on a 0% introductory rate. I was also paying $425/month for rent.

Now that I bought a house things are going to get shaken up a bit. Between interest, tax and insurance my mortgage cost is $488 + principal for now, which I will be able to reduce by $61 once I get PMI knocked off in March. The credit card debt is going to lose it’s 0% interest and it will be increasing to about $40/month interest cost. So right now my debt is costing me $426/month. Within 6 months I’ll eliminate PMI, which is to me a cost to have debt. In 6 months I should be around $330/month and I have eliminated rent cost.

By: Courtney

Courtney — Thu, 12 Nov 2009 22:40:41 +0000

about $820 in mortgage interest and about $8.50 in student loan interest. Which, in the 25% tax bracket only works out to about $622 total per month.

By: Storch Money

Storch Money — Thu, 12 Nov 2009 19:26:47 +0000

This is an interesting exercise. When I first got serious about personal finance, the moment when I was “scared straight” was when I added up the total amount of debt I owed. I had no credit card debt, but between mortgages, student loans, and a car payment it was horrifying to realize that even with strong income I had already spent years’ worth of earnings.

Adding up the interest paid per month could have a similar effect for people.

By: lostAnnfound

lostAnnfound — Thu, 12 Nov 2009 19:12:47 +0000

I can’t wait to try this. I’m already a little steamed when earlier this year I figured out how much we let ourselves get into debt and set up a repayment plan for that. This really ought to light a fire under us when we see the money we are losing every month just in interest (not to mention the principle that is being paid back for things we shouldn’t have bought or saved & paid cash for instead).

By: John DeFlumeri Jr

John DeFlumeri Jr — Thu, 12 Nov 2009 18:04:37 +0000

It is shocking the first time we actually admit our situations, but until we put it on paper, we can’t analyze it, maybe we don’t want to be truthful with ourselves.

John DeFlumeri Jr

By: CB

CB — Thu, 12 Nov 2009 17:30:23 +0000

I read that before “easy credit,” pre-WWII, it was hard for the average American to really save very much. So Americans were striving to save some. After the advent of the ubiquitous credit card, the typical American was in the position of perpetual debt. Just getting to zero debt is a goal.

There is something a bit off about such a situation, and the fact that the economy is based on consumer spending, but the U.S. off shored its manufacturing, and because schools here aren’t “good enough” to produce the higher-paying workers we need at corporate offices, we need to import labor.

By: Lynn

Lynn — Thu, 12 Nov 2009 17:20:59 +0000

Between my husband’s student loan and our HELOC we pay about $245 in interest. I don’t even consider our mortgage in these amounts because it adds an additional $1950 in interest each month. AAGGHH!

By: Bodark

Bodark — Thu, 12 Nov 2009 15:38:34 +0000

Excellent Post Matt. Really.

By: MikeS

MikeS — Thu, 12 Nov 2009 14:37:48 +0000

Overall about $1,200 a month for me with over a $1,000 of that for my mortgage. Still have student loans we are working off for my wife, but at 3%, they don’t contribute much. Have 1 car loan (gone in 2 years) and a little credit card debt (gone in March, if all goes to plan).

By: Evan

Evan — Thu, 12 Nov 2009 14:04:34 +0000

Matt,

Thanks for the idea! My interest payments were STAGGERING and I don’t even have credit card debt lol

By: Katharine

Katharine — Thu, 12 Nov 2009 14:03:24 +0000

Hrm, I should run this calculation, but my student loans haven’t gone into repayment yet. I’ve been putting the money that would go to paying my loans towards building a small cash cushion.

I’ll have to bookmark this and do it after Christmas, when all my loans have been paid once.

By: Brian

Brian — Thu, 12 Nov 2009 13:09:11 +0000

A quick calculation shows that i am paying out $178 a month towards interest between my student loans and my recent car purchase.

Yeah. It makes me angry. I am just happy i am working to get through my debts as quickly as possible.