Ack, sorry about that. I've been drinking.
No, just kidding, this is my week off of classes, no papers to write, why would I be drinking? Ha ha, just joshin'. Well, mostly.
Anyway, this is not the March redux yet; I'm sorry if you were disappointed, but dude, March isn't even over yet! Maybe YOU are the one that's been drinking.
But no, I thought and thought and thought about the 2012 financial goal situation. I looked at my goals charts for the last couple years, and a lot of the things ... well, it's hard to explain, but it seemed like I don't need to track them anymore. Not because I'm not still saving for them (like gifts, vacations, work retirement contributions), I AM, but most of those things are automated or manageable. The only one left that I would still get all passionate about filling up was the Roth, and thanks to SOMEONE I can't have a Roth anymore[1]. So adding amounts to the chart wasn't driving me on in a frenzy of motivation like it used to. And you know me. It's 0% or 100%, baby. Minor motivation is just boring.
Investment literature (*cue posh voice*) would say that my next goal should be maxing out retirement accounts (i.e., before paying down the mortgage), but our retirement situation is doing okay at the moment and the market feels inflated to me at the moment so I don't want to go whole hog on it right this second. I could blitzkrieg the student loan, but the rate on that is so low that my savings account makes more positive interest than the student loan makes negative interest. So paying that off would actually be dumb. (I have to repeat this to myself frequently, because it's debt and I hate it and I would love to murder it the way I did my credit card debt back in the day.)
The mortgage, on the other hand--well, that rate is not lower than my savings account rate. WAY not lower. Like 7%. Did you just throw up in your mouth a little? Because I did. And then I had to go brush my teeth. AGAIN. Jeez.
What sucks is that we can't refinance it to one of the MUCH lower rates that are available right now, despite having two rock solid incomes, money in savings, and credit histories that make the angels weep, because we bought it at the absolute height of the housing bubble (remember what I said about 0% or 100%?) and it's seriously underwater. Apparently they're removing the loan-to-value cap for HARP loans soon and when they do we'll qualify, but until that happens OR until we pay down a good chunk on the mortgage, we're stuck with that grotesque 7%.
So I started playing around with numbers--like ya do--and came across this nifty mortgage paydown chart[2] that not only does the amortization but a) allows you to plug in a changed monthly payment (i.e., if 10 years in you start paying a $500-higher-per-month payment) AND b) allows you to plug in one-time extra payments. If you do either (or both, I suppose), it not only auto-corrects the little graph showing how much of your payment is interest and how much is principal (yay! graph!), but it also, RIGHT THERE AT THE TOP IN A GOLD BOX, calculates how much interest you've now saved yourself in the long run AND how many years & months you've shortened your payoff date by.
This is incredible.
And it's not just incredible if you're some kind of ubermeganerd that loves spreadsheets, it's really flat out incredible. Because watch this:
Remember when I said I can't contribute to a Roth anymore? Well since I just paid my final tuition payment (hallelujah! hallelujah!), my original plan of starting auto-deposits to the Roth each paycheck is no longer an option. So what happens if I auto-deposit it to the mortgage each paycheck instead?
Interest saved: $158,120.86
Mortgage shortened by: 8 years, 2 months
Yeah.
Really.
Now, if you've resumed breathing, let's continue. What about that little "one-time" column? What if I just made little deposits as extra money came along? Like $3 from a survey, or $45.23 from a reimbursement check, that sort of thing?
I decided I'd tally up all my March "extra money" (see reduxen, below), and pop it on there as a little bonus deposit.
$3 survey? Saved $14 in interest. All by its little self. What the hell!
I mean, I know how compound interest works, obviously, but dang.
So anyway I'm up to like $80-something for March already, and the interest saved has climbed above $400 already. And that's without even starting the auto-deposits - those will kick in starting April 1, and between the extra money and the first auto-payment we're up to nearly $3k in interest saved and a month off the end of the loan.
I think I've found a new obsession. :D
[1] I guess it's worth it. :P
[2] CHARTS!!!!!!!! GRAPHS!!! ZOMG!!
