I’ve decided to add another section to my monthly reporting – finance charges. It’s one that not everyone may pay a lot of attention to unless they are keeping track of where their dollars are going. And when you do keep track – oh my…it is an eye opener.
It is so sad to see that I spent $417.49 in finance charges for March. But, by golly – it is so good to have it right in my face. I am ready to look this beast in the eye and defeat it (sorry – getting myself all pumped up here – think of the “Eye of the Tiger” song playing in the background as you review the report 🙂
We keep close track of all our finance charges: credit cards ($47), car loan ($99), student loans ($766), and home loans ($2398). It keeps us motivated to move more quickly in getting them paid down. Afterall, we have better things to do with that $3310 each month.
Excellent idea Tricia – I really like this one.
Even though we’ve got a reasonably large balance on our credit cards, it doesn’t end up with large finance charges because they’re all locked in on low-interest-for-life-of-the-debt balance transfers (and we’ve stopped using them entirely). The one that’s now bugging me is the interest on the mortgage. Being a new home owner, that mortgage payment is almost entirely interest. And every month, they’re telling me exactly how much is going to their bottom line instead of ours… :/ If the credit card companies did something similar, I’d bet people would be a lot more motivated to get that credit habit monkey off their back.
Great idea to keep close track of this. I would also include any fees incurred, such as late fees or over the limit. This would all be bundled in an expense category that I would call, “cost of debt.” Ouch. $417. Well, at least you are aware of it and doing something about it. Can I ask why it is going up?
Great idea. Seeing the number will give you more incentive to pay the debt off. I don’t worry so much about the interest on my home because of the deductibility factor.
john omm – Wow! Those are some serious finance charges! They are more than my family makes in a month. I keep track of my other charges, but not monthly. Usually quarterly I check on them. Now, for my auto loan I check more frequently because in 5 months it will be paid off. I love watching it dwindle 🙂
sean – I had to look for a few minutes on my one credit card statement to find where they listed the finance charge rate. They really should put it more up-front-and-center, but they don’t want you to notice 🙁
lamoneyguy – great question about why it is increasing. I currently have a project going on that and I hope to have a post about it within the next few weeks 😉
chitown – unfortunately, I don’t pay enough in interest or have enough deductions to itemize. So I am just paying with no “benefits”. One good thing is that my home was only $35,500 and my monthly payment is $337.00. So, I’m not taking too bad of a hit compared to others.
Thanks everyone for your comments and your support!! I knew blogging about this would help keep me focused and more determined 🙂