Get Serious About Saving

Being new to the blogging world, I’ve noticed a lot of websites dedicated to coupons and saving money. It seems like there are a lot of people out there willing to invest copious amounts of time into clipping coupons and scouring the Internet for the best deals. But are we really focusing our time on the things that will save us the MOST money in the long run?

My husband and I are going to wrap up refinancing our house for the second time in less than three years. That seems ridiculous. But, bear with me. I ran the numbers for a $200,000 mortgage so you can see how much you can save by switching to a 15-year loan and taking advantage of the really low interest rates that are available right now.

                                          Original Loan                            Refinanced Loan

Term                                     30 years                                         15 years

Interest Rate                          5.5%                                             3.375%

Monthly Payment                 $1,221                                             $1,460

Total Interest Payable        $171,092                                         $56,812

Total Payments                   $371,107                                         $262,827

Yes, the monthly payment to switch to a 15-year loan is about $240 higher than the 30 year. But, look at how much you save in the long run—more than $100,000! And for us this means that by the time our oldest child graduates from high school, we won’t have a mortgage payment anymore so we’ll actually have some money to give her for college! Or you could clip 100,000 $1 coupons. Just sayin’!

If you’re wondering how you could ever possibly afford an extra $240 a month, check out Dave Ramsey’s Financial Peace University. They have classes all over the U.S. My husband and I went through it two years ago and were able to pay off some of our debt, which gave us the extra money we needed to be able to switch to a 15-year mortgage. It was really helpful and we still live by the “Baby Steps” he lays out in the class.