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How to Calculate Daily Interest-- Big Motivation to Pay Off Debt-- LIVE video - YouTube
Channel: Six Figures Under
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Hey there! I'm stephanie from SixFiguresUnder.com. And I'm Mike. I love having
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him work at home somedays so he can come
on here with me. Today we want to show
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you a calculation that will help to
motivate you to pay off debt and help
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you track your debt payment progress. And
if you have a spouse that is not on
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board with paying off debt or maybe
you're not really motivated yourself
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this will help you to get fired up to
pay off your debt. Now back in 2016 we
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finished paying off $144,000 of student loan
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debt and I've got a whole email series
that-- there's a link in the description below-- a
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whole email series where I go through
the steps we took to set up a plan and
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what we did to pay that off so you can
click on that it's free in our last live
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video we talked about our new goal that
we're super excited about to pay off our
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mortgage in five years so we are back in
debt payoff mode no joke if there anyone
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else here who is is fired up to pay off
their debt or maybe you have debt but
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you haven't decided if you're gonna dive
in yet you can leave a comment if you
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are we'd love to hear what kind of debt
you're paying off last night I was going
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through our numbers for our November
budget update each month we share our
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income our expenses what we save over on
six figures under comm and this is the
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first month that we got to actually put
some extra money toward our big mortgage
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that's exciting yeah
so I'm it while I was in there on the on
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the site paying off the extra mortgage I
was looking at the interest and holy cow
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we pay over a thousand dollars a month
just an interest this is money that we
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don't have anything to show for except a
mortgage like this is money we're just
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throwing away really and it's oh it's a
15 year mortgage so that's why it sounds
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like so much but
anyway thinking about the amount of
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interest really got me excited to share
this with you so if you or your spouse
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are reluctant to pay off debt this
calculation will help to motivate you so
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this is it do you know how much interest
you pay every day do you know what your
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daily interest is if you do leave a
comment you don't have to tell all the
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numbers or you can but I'm curious to
see how many of you make this
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calculation of how much interest you pay
daily and here's the actual calculation
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it's really simple it's pretty simple so
you have your current loan balance
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whatever kind of debt that could be your
interest rate and you multiply the two
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and the interest rate of course has to
be decimals so if it's three point six
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percent interest its point zero three
six and then that gives you the amount
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of interest you pay every year so yearly
you're gonna pay your current loan
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balance times your interest rate as a
decimal and then you can decide how much
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of that you'll if you want to see on a
daily basis how much what we're talking
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about right now you just divide that by
365 and you see how much you pay every
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single day and interest um if you more
motivated by a weekly or a monthly
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number you can divide by 52 or 12
whatever it is but but it will tell you
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how much you're actually paying every
day and it's super simple now of course
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if you're paying more than just interest
this number will change because this has
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the the interest you pay per day right
now hopefully as your current loan
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balance goes down because it paid
something the interest rate will say the
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same but your interest in a year will go
down on the Soviet you you could
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actually create an amortization table if
you want to do that but the super simple
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calculation is how much you are right
now and how much you owe each day right
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now given that balance so to give you an
example we did this calculation when we
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were first starting to pay off our
student loans so we've started with
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about a hundred and thirty thousand
dollars of student loan debt and it was
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at a six point six point eight percent
um part of it was at five point five
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percent interest and part of it was at
six point eight because so there were
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two different kinds of loans to keep it
simple we multiply it by
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we multiplied the the amount we had
remaining times point zero six eight to
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find out that we paid eight thousand
eight hundred and forty dollars a year
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in interest or pay or accrue so divided
by 365 that is over twenty four dollars
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a day now twenty four dollars might not
seem like much just as an amount of
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money but think of every morning waking
up taking twenty four dollars cash out
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of your wallet and throwing it in the
trash or burning it or flushing it
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whatever think of just getting rid of
twenty four dollars every day that's a
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lot of money to be wasting so fast
forward that's with seven hundred
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dollars a month that's a lot anyway fast
forward we paid off quite a bit we had
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seventy seven thousand left and we did
this calculation again and it was down
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to fourteen dollars a day it's a lot
less so right now as we started our goal
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you know a couple weeks ago we our
mortgage balance was three three hundred
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and sixty three thousand dollars and
it's at three point six to five percent
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so that's just over thirty six dollars a
day of interest that we're throwing away
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money that we're just throwing away um
so if you have debt right now whether
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you're working on it actively or not I
want you to make this calculation figure
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out how much you're paying daily in
interest now if you have multiple debts
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maybe you have student loans and credit
cards and a car payment and a mortgage
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all those different find out what the
daily interest you're paying in each of
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those and add them up and see how much
you are paying every day an interest and
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visualize yourself throwing away that
money and for me that gets me fired up
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and ready to pay off my debt I hope it
does that for you too I'm thinking about
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the trend because if you're paying that
amount down faster then you're throwing
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away less money every morning faster if
you're actually letting your amount
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up then every morning you have to pull
out a few more coins or a few more
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dollars and throw them away too so so as
much as you can keep your your debt on a
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downward track every day every
subsequent day you're doing better
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financially because you pay a little bit
less interest that day than the day
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before
so then as as you're paying off your
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debt
keep track of that maybe every month
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after you make your your big extra debt
payment calculate what your what the
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daily interest is now and see see how it
goes down that will show you that you're
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making a difference so if you have a
spouse that's not on board share this
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information with them crunch the numbers
and show your spouse what what kind of
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money you're throwing away a lot of
times if somebody's not on board it
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seems like maybe it's because they're
thinking this is a hard thing to do like
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all of this work all the things I'll
have to go without if instead you can
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show them well this is how much you can
actually have this is what this is the
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extra money available for you if we do
this faster that's a much more exciting
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story then we're gonna have to go
without because because we're trying to
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throw all our money toward it and so
we're gonna try some beans for a while
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yeah have any of you done this I would
love to hear if any of you regularly
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make this calculation or if you've just
used this this number this daily
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interest if you've used this to motivate
you to pay off debt leave a note in the
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comments I would love to hear if this is
a normal thing for for people to do now
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there's a fine line between being
motivated by this and being discouraged
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by this for us it's really motivating to
calculate how much interest we play each
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month for other people it might might be
depressing or discouraging so if this is
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a number that that depresses or
discourages you don't do it okay yeah do
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it once and say oh that was awful I
don't want to do it again and don't do
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it for another couple of years or
something over long it takes for it to
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be making a big difference then you can
look at it again and say awesome
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so yeah but but don't let this make you
feel helpless we want this to to
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encourage you and to motivate you if you
are just getting started paying off debt
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I've got a link in my header here
that will take you to a seven-day free
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email series where I talk about how what
how we paid off one hundred and forty
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four thousand dollars of debt how we set
up our plan and how we worked through it
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so you're welcome to sign up for that
it's free
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I hope this motivates you to crack down
on your debt and move toward debt
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freedom you can do it you can do this
guy's okay see you next time
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