Comments on: Round your debt payments up http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/ Helping readers to use bargains wisely since 2005 Sun, 12 Feb 2012 16:24:19 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: S. B. http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-185400 S. B. Thu, 23 Jul 2009 11:43:34 +0000 http://www.mightybargainhunter.com/?p=1697#comment-185400 Isn't it interesting how our brains are wired? We tend to view a particular number as smaller when it's associated with a much bigger number. Hence, if a $40 socket wrench is on sale for $20, we think it's a huge savings, but if a $980 refrigerator is on sale for $960, we don't view it as any big deal. But the savings are the same! You are using this fact to your advantage when you pay down debt the way you are suggesting. If you made a second, separate mortgage payment each month for $21, I bet it would feel like it hurt. But when you pay $900 instead of $879, your brain says it's no big deal because $21 is nothing compared to the $879 you're already shelling out. Isn’t it interesting how our brains are wired? We tend to view a particular number as smaller when it’s associated with a much bigger number. Hence, if a $40 socket wrench is on sale for $20, we think it’s a huge savings, but if a $980 refrigerator is on sale for $960, we don’t view it as any big deal. But the savings are the same!

You are using this fact to your advantage when you pay down debt the way you are suggesting. If you made a second, separate mortgage payment each month for $21, I bet it would feel like it hurt. But when you pay $900 instead of $879, your brain says it’s no big deal because $21 is nothing compared to the $879 you’re already shelling out.

]]> By: william http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-185329 william Wed, 22 Jul 2009 15:43:07 +0000 http://www.mightybargainhunter.com/?p=1697#comment-185329 Any body done calculations on the savings by doing this? Or a calculator online that can help? Any body done calculations on the savings by doing this? Or a calculator online that can help?

]]> By: william http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-185202 william Tue, 21 Jul 2009 11:38:12 +0000 http://www.mightybargainhunter.com/?p=1697#comment-185202 I did this for my mortgage, rounded it up to the next thousand. It is only around $200 more than the required monthly payment, but my mortgage will be will be paid off in 15 years instead of 20! I did this for my mortgage, rounded it up to the next thousand. It is only around $200 more than the required monthly payment, but my mortgage will be will be paid off in 15 years instead of 20!

]]> By: william http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-185131 william Mon, 20 Jul 2009 21:05:12 +0000 http://www.mightybargainhunter.com/?p=1697#comment-185131 A very good tip. I've been actually using it myself for some time now, and it's working pretty well. A very good tip. I’ve been actually using it myself for some time now, and it’s working pretty well.

]]> By: Frank @ ab rocket http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-184896 Frank @ ab rocket Fri, 17 Jul 2009 22:21:39 +0000 http://www.mightybargainhunter.com/?p=1697#comment-184896 I take this very same approach when it comes to knocking down my credit cards bill. I always pay a bit more than my minimum payment in order to get rid of this bill quicker. I usually do $30 extra for each bill payment though. I take this very same approach when it comes to knocking down my credit cards bill. I always pay a bit more than my minimum payment in order to get rid of this bill quicker. I usually do $30 extra for each bill payment though.

]]> By: Mikael @ Retire Early http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-184832 Mikael @ Retire Early Fri, 17 Jul 2009 07:54:32 +0000 http://www.mightybargainhunter.com/?p=1697#comment-184832 Definitely a good idea. It is just like the fact that if you make 13 yearly payments on your mortgage (instead of 12), you'll be able to pay off your mortgage in 15 years instead of 30 years. I haven't tested this concept but I am sure that it is true since I've read it several places. Mikael Definitely a good idea. It is just like the fact that if you make 13 yearly payments on your mortgage (instead of 12), you’ll be able to pay off your mortgage in 15 years instead of 30 years.

I haven’t tested this concept but I am sure that it is true since I’ve read it several places.

Mikael

]]> By: Vikki C http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-184817 Vikki C Fri, 17 Jul 2009 05:36:38 +0000 http://www.mightybargainhunter.com/?p=1697#comment-184817 That is how I paid off my 5 year car loan in less than 4 years. I think my note was $250ish and I always paid $300 even if money was tight. I guess I should start doing that w/ our mortgage considering my goal is to pay that off in 15 years. You are right about building your emergency fund instead of making big payments, BUT I am so sick of looking at my credit card balance everytime I log-in to my account that I might just pay it off next month. During the year, my husband and I only contribute to our emergency fund when he gets a bonus and when he gets those extra paychecks 2x a year. We generally apply more than 1/2 our tax refund towards it so we should hit our emergency fund goal next year. That is how I paid off my 5 year car loan in less than 4 years. I think my note was $250ish and I always paid $300 even if money was tight. I guess I should start doing that w/ our mortgage considering my goal is to pay that off in 15 years.

You are right about building your emergency fund instead of making big payments, BUT I am so sick of looking at my credit card balance everytime I log-in to my account that I might just pay it off next month.

During the year, my husband and I only contribute to our emergency fund when he gets a bonus and when he gets those extra paychecks 2x a year. We generally apply more than 1/2 our tax refund towards it so we should hit our emergency fund goal next year.

]]> By: Just Sayin http://www.mightybargainhunter.com/2009/07/14/round-your-debt-payments-up/comment-page-1/#comment-184650 Just Sayin Wed, 15 Jul 2009 13:42:42 +0000 http://www.mightybargainhunter.com/?p=1697#comment-184650 very good idea , imight start doing this , the extra for my mortgage would only be $9.73 so might aswell do it , definitely easier to think in round numbers ....i'll asky my wife to sort it out now :) very good idea , imight start doing this , the extra for my mortgage would only be $9.73 so might aswell do it , definitely easier to think in round numbers ….i’ll asky my wife to sort it out now :)

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