# Need debt motivation? Calculate your daily costs.

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Paying for debt blows, but finding new ways to keep motivated doesn’t :) And this morning I came across a BRILLIANT way to help put things in perspective! (Or perhaps give you a heart attack, I’m not sure which)

It comes from a good blogging friend of mine, Matt Jabs, and what he does is simple – he calculates just how much interest he’s paying on his debt EVERY SINGLE DAY! All his mortgage interest, credit cards, loans, everything. And want to know what it’s costing him? A whopping \$40.13! And he gets squat from it in return. How’s that for motivation? Knowing you’re giving up \$XX every single day until you pay it all off? Freakin’ crazy mang – puts a whole new realization of what debt’s doing to ya. (and yeah I know, I typed “mang” instead of “man” – I can be ghetto like that)

Now since I’m projecting Matt’s debt all over, it would only be fair that I do the same ;) We don’t have credit card debt or any loanage (thank God), but we certainly have mortgages up the posterior! And they come in at a pricey \$350k at that.

So if we extract the total monthly interest we’re paying (\$1,800), and then divide it by 30 days, we’re paying……drum roll please….\$60 every day for our debt! WOW. That’s seriously incredible to see it laid out like that, and it’s not even including principal! I honestly thought we’d hover around \$30-\$40 a day just like Senor Jabs, but this REALLY puts things into perspective. \$60 every day evaporating into thin air – unbelievable.

I highly recommend breaking it down yourself and seeing how it affects you. And if you’re in the mood, dropping it in the comments and letting it out for all to see. Perhaps it would feel good? ;) Either way I think knowing this # could really help step up your get-rid-of-debt gameplan.

And if this interests you as much as it does me, check out Matt’s “How much your debt costs” spreadsheet! I’m going now to add it to my best of templates/spreadsheets because I think this is some really really good stuff. You know I love me some tracking!

Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!

1 tylerandalyssa February 9, 2010 at 12:51 pm

\$0 right now, but that won't last for long as more education and/or a home is down the road in the next three years. It's a bit depressing to reverse the formula and find out how much interest you are making on all savings & checking accounts. Instead of \$40.13 or \$60 it's a mere 7 cents a day. Thanks for this post! A great motivational tool…I'll be sure to use in the future!

2 Brandi February 9, 2010 at 2:06 pm

I've been doing that myself actually! Sallie Mae updates the current interest due on a daily basis and that number increases EVERY DAY until I make a payment. And it increases exponentially. Which SUCKS.

So to keep myself motivated I log in every day and remind myself why I'm working to pay her extra!

3 Kimmie M. February 9, 2010 at 2:41 pm

\$8.02! :((

4 Mrs. Frugal February 9, 2010 at 3:20 pm

Roughly \$9 / day. No bueno. Great post!

5 Evan February 9, 2010 at 3:25 pm

I did this also when I saw it on Matt's blog – it made me sick!

http://www.myjourneytomillions.com/articles/interest-pay-financing-companies-banks/

6 J. Money February 9, 2010 at 3:41 pm

@tylerandalyssa – Haha, hadn't even thought to reverse it – good idea ;)
@Brandi – Oh really? That's actually pretty cool that they do that! would totally suck seeing it rise for sure, but def. good to know what's going on exactly than pushing in the back of the mind.
@Kimmie M. – Wanna switch? ;)
@Mrs. Frugal – Yeah, anything above \$0 blows. But more motivation to work on it!
@Evan – Hah! Awesome! Looks like he's inspiring a whole bunch of us.

7 Matt Jabs February 9, 2010 at 4:12 pm

Like J. Money so eloquently said… paying for debt blows!

Doing these calculations is the best way I have found to ensure I view debt for what it truly is… a big, fat, hairy, ugly, unsexy burden. Another good calculation to do alongside the interest on debt calculation is to figure out how much of your money goes toward interest and principal combined. When you do this it shows you how much money you need to make each day, just to carry your debt.

Motivated yet? Good. Now… let's go slay some damn debt! :-)

Nice work Money.

8 Anonymous February 9, 2010 at 4:24 pm

I'm, luckily, only paying \$29.20 a day; The only reason why that is going down so much is because I'm paying twice my mortgage payment and applying the extra payment to principal which has knocked down my interest A LOT. I'll have my place paid off in 10 years on a thirty year mortgage!

9 Anonymous February 9, 2010 at 5:00 pm

On a 31 day month \$28 on a 28 day month \$31. I just have Mortgage interest and student loan interest at 0.65%. My savings accounts just lowered the interest rate again. But I am earning \$0.67 – \$0.75 a day in interest, less after taxes.

Marie

10 Steve B February 9, 2010 at 5:07 pm

\$9.09 — no credit card balances, no loans, no lines of credit, one mortgage with less than 13 years to go (bought 5+ years ago). down from \$9.14 a month ago, and from \$9.19 the month before that. Hoo-yah!!

11 RainyDaySaver February 9, 2010 at 6:46 pm

\$43 a day for me — 98% of that is mortgage interest. After the remaining CC is paid off end of April, we'll be attacking the mortgage balance!

12 Keith Morris February 9, 2010 at 7:06 pm

I'm up to \$7.15 per day for my credit card debt, which comes out to \$2,612 per year, AKA a freaking vacation. Did the math here: http://www.lifetuner.org/discussions/403-debt_motivation

13 Anonymous February 9, 2010 at 7:15 pm

Mine is \$18.56 of mortgage interest. Good post.

finco86

14 20smoney February 9, 2010 at 7:26 pm

15 J. Money February 9, 2010 at 7:31 pm

@Matt Jabs – Debt IS a big, fat, hairy, ugly, unsexy burden! You nailed it ;)
@Anonymous – Dude, keep rockin' that!! DOUBLE your mortgage payments? Insane! And smart as hell.
@Marie – If only we could find away to reverse the debt interest w/ saving rates ;)
@Steve B. – Hey, every 5 cents off/day matters! Good for you man, keep it up.
@RainyDaySaver – Is it as overwhelming as it is to me? Paying off the mortgage is the hardest thing I've found to comprehend these days. Just can't figure out how to stay on top of it. Any great ideas?
@Keith Morris – Crazy, right? Thx for the holler over on the site – much appreciated.
@Anonymous – thx! great job calculating yours ;)
@20smoney – thanks!

16 fallingintofavor February 9, 2010 at 7:37 pm

Mine is currently \$7/day. However!! I paid \$2000 toward my student loan awhile back and they stopped sending me bills for 2 months. I called them to sort things out and found out that I owed interest for the 2 months since I paid toward the principal only. So right now I have to pay a few months of interest before I do anything.

17 Anonymous February 9, 2010 at 7:47 pm

Mine's between \$7-8 a day (all mortgage).. it's not that much in the grand scheme of things, but it's still gross and I hate it regardless :)

~K~

18 WellHeeledBlog February 9, 2010 at 8:44 pm

I pay \$0!! :D I graduated college with almost \$20K in student loans but they're from a special foundation where I have 0% interest and a 10-year payment period. Sometimes I think it'd be nice to pay off my loan before the 10 years are up, but that wouldn't make financial sense at all!

19 Jackie February 9, 2010 at 8:58 pm

Hm, looks like my husband and I pay about \$11.29 per day in interest. I'd rather be doing something else with that money!

20 Trina February 9, 2010 at 9:01 pm

\$29.62…all mortgage.

21 RainyDaySaver February 9, 2010 at 9:24 pm

@J Money: My plan has been to pay off the higher-interest debt first (credit cards), and that's almost done. Our car loan is at 0%.

The 30-year fixed mortgage is 5%, and I really don't want to be paying it until we're 60, so it is a bit overwhelming. We've been putting ~\$30 extra toward the mortgage monthly from the very beginning (June), and just with that little bit extra, we'd pay it off a year early and save \$11,500 in interest. Now bump that up to \$100 extra toward the mortgage monthly, we'd shave off \$40,000 in interest, and nearly four years.

I like paying extra per month, but you can add extra payments in lump sums if that works better — some people like to see the bigger chunk that comes off what you owe. But saving all that interest is what motivates me. Sure, some argue about the tax breaks (you can deduct the mortgage interest from your federal taxes), but you only get back about 30 cents on the dollar, and that's not worth it.

22 April B February 9, 2010 at 10:35 pm

Okay – I win. \$78 per day!

23 Michele February 10, 2010 at 2:46 am

My mortgage is costing me \$21.60 a day for this month. Yeesh, I would like to have it gone in 14 years though (making it 15 years). I can't carry this mortgage for 30 years since I am 43.5 years old!!

Shelley (FB)

24 Jamel Rose February 10, 2010 at 3:02 am

Calculating your daily costs and thinking about all the cool stuff I could spend that money on (not to mention the interest I could be EARNING) is pretty motivating.

25 Money Reasons February 10, 2010 at 4:08 am

I'm finally at \$0, as of this month. But that won't last, someday I'll need to buy a car again or want a larger house with more property…

26 youngandthrifty February 10, 2010 at 7:25 am

Ew! That's a lot of \$\$ a day gone "poof"! That's a really good motivator- thanks for the tip. I currently don't have a mortgage, but AM looking to get one soon. I'll definitely keep that in mind when I get one. It makes me think about not buying "more than we can afford" and just getting something smaller so we can have a smaller mortgage and less money gone poof.

27 jdgreene February 10, 2010 at 1:37 pm

I have roughly \$80,000-\$100,000 in school debt and no clue what my interest per day is. When they all enter into repayment next year (after graduation) I'll figure it out down to the penny, but I'm thinking it will be huge, nasty, and extremely motivating.

28 Anonymous February 10, 2010 at 4:06 pm

\$16.30 per day, all mortgage. Paying it off as quickly as possible, 10-12 years to go! We bought the house 2 years ago with a 30-year mortgage, NO WAY we're waiting 30 years to pay off the house. :-)

29 J. Money February 10, 2010 at 4:33 pm

@fallingintofavor – Not too bad, you'll be done with it in no time my friend.
@Anonymous – Paying *anything* a day towards debt is no fun, totally understandable ;)
@WellHeeledBlog – Hah! You gamed the system ;) It looks like you have no debt with these calculations, but in fact you do – interesting. If only you could swap it out for a mortgage/car/etc. haha….thanks for sharing!
@Jackie – You could use it to get 2 coffees at Starbucks every day! haha..
@Trina – Blows. But good that you only have mortgage!
@RainyDaySaver – Definitely good points….we go back and forth on paying some off every month or so (\$50 here, \$150 there) but then we also like seeing the additional savings in our accounts too. But maybe tracking this daily interest paid will get me to work harder at it?! at least in theory it should ;)
@April B – Ouch. I wish I had a prize for ya!
@Michele – What, you are?! I had nooooo idea! I thought you were in your 20s ;) that's a compliment, right?
@Jamel Rose – I'm glad! Not fun thinking about debt, but it is thinking about the money you could be using it for INSTEAD.
@Money Reasons – Enjoy it while it lasts ;) I want to downsize our house, but I could go for a newer car here once mine dies.
@youngandthrifty – Yes, PLEASE whatever you do, make sure you're 100% comfortable with your mortgage and monthly payments. Having "more" room and house is good in theory, but it also adds to things like debt, maintenance, more "stuff" to fill up that room, etc etc. That's not to say it can't be worth it, just consider it all before you sign ;)
@jdgreene – Should be decent rates if it's school stuff at least. Much better than auto/home/etc rates.
@Anonymous – WOW, good for you! that is inspiring…honestly, very impressive!

30 Trina February 10, 2010 at 5:23 pm

Thanks again for this post. It led to a great discussion with my hubby last night. Another way to look at it and see how gross mortgage interest can be is to see how much you are paying over the course of a year. \$10,811.30 for us. Gross! Then to think that the life of the loan is 30 years…yikes. We are currently paying an extra grand a month and plan to have it paid off in 10 years…just before our 40th birthdays:)
Also, got the Sammy cd. We love it! Thanks.
Trina

31 J. Money February 11, 2010 at 5:04 pm

Oh yeah, yearly is even nastier! Daily seems more "real" to me for some reason ;)

And good for you applying \$1,000 EVERY MONTH to your mortgage!!! That's freakin' incredible, seriously. I am amazed :)

32 Anonymous February 13, 2010 at 6:45 am

Amazingly, only \$21/day. Two dollars is my car loan, two dollars for credit cards, \$17 for student loans. I say amazingly since I owe close to \$190k in student loans, half federal and half private. Interest rates are so low right now that my highest student loan rate is only 3.3%. This reinforces my idea that, because the rates are low now, it makes sense to make off as much principal as I can, because the private rates are variable, and I do foresee them going back up before long.

33 J. Money February 13, 2010 at 7:19 pm

Yeah, I could see that. My Heloc variable is at 2%-something (CRAZY!) but will go up as soon as the Fed starts raising rates again….but my 1st mortgage is @ 6.9% locked in so hard to determine which to pay first ;) As long as we're all paying something off though!

34 StacknBills November 27, 2012 at 3:39 pm

\$25 a day, mostly pertaining to education loans and mortgage. Thanks for this article.

35 J. Money November 28, 2012 at 11:29 pm

Glad you got something out of it :) Been a couple of years since I wrote it, but I remember liking this one while putting it together.

36 trevor December 19, 2012 at 2:22 pm

Wow that’s a brutally high number. I live my entire life on less than 40\$/day