You probably get tired of hearing people say, "Skip lunch and you can save $10 a day, or $50 a week. That's $2,600 a year." Who wants to skip lunch every day? Besides if I skip lunch for a month and save $200, and then turn around and buy two tickets to see Jersey Boys, I'll blow through my lunch savings in one sweep of the credit card … k'ching! Which is exactly the problem people have "saving" money.
I can't tell you how many times I've heard some version of, "Yeah, I can give up eating lunch out and save $25 a week, but what's that really going to get me?"
How about a $30,000 savings on your mortgage. Interested?
On a $250,000 mortgage at 6 per cent amortized over 25 years, if you add an extra $100 to your monthly payment, you'll save $32,640 off your mortgage and chop 3 years off your amortization. That's got to be worth brown-bagging it for lunch!
Since many of us have much lower interest rates than this the results will vary but it's certainly worth the effort to find out. Another simple way of saving a ton of cash is to simply increase your payment to the next even hundred. For instance, if your payment is $649.08 round it up to an even $700 every month! The extra goes directly to your principal and makes a huge difference.
Most people never realize the gains they could make because when they do something to "save" money, they leave their "savings" in their wallet, where it eventually vanishes into a cup of coffee, a new magazine, or a DVD for the kids.
If you want to make your "savings" work as hard as you do, then you've got to apply them somewhere important quick, quick like a bunny. Use the money you're saving to pay down your credit card balances or your mortgage, bump up your emergency fund, or increase your retirement savings.
I'll bet there's a bucket-load of ways you're spending unconsciously. And I'll bet you can find the $100 a month to save $30,000 on your mortgage. Why don't you give me a call and we can take a look together?