You don’t miss $4.33

This really should be included in the “You Don’t Miss $20” section, but I considered that it really should have is own section because it is a whole new level of thinking.

The concept is simple and the same as the $20 concept – you don’t miss this money in your account.  So, after the $20 was sent over to my friends, I would check to see the amount I had left.  If it wasn’t an even number, then I would round it down and send that money to the student loans folks.  Honestly, I never see those extra digits.  They mean nothing to me.  If somebody said to you "What do you have saved for when you travel to Thailand?" you won't respond "$4,678.32" you will respond with "around $4,500".  Your mind likes to round down.  You want to be comfortable if you make an error, but you also just can't remember all those digits.  It isn't natural for most people.

So, every time I signed into my bank account, I would do the $20 trick to my student loans, I would make the required payments, and I would then look at my account balance.  $154.33? Perfect.  $4.33 into the student loans.  This was likely done three times a week, and probably averaged about $5 every time I did it.  Pennies, amiright?  Why on earth would I read this stupid blog with its stupid self-righteous voodoo on paying off loans.  It can't be done any faster than I am paying off my loans now, right?!

Wrong.

$5 x 3 x 52 = $780

In one year, doing this ridiculous round down function paid off to the tune of what is likely $780.  When you apply the same calculations, I was saving this much in interest:

$39

Hardly interesting, you might say.  But you are also paying off some of the principal.  Or, you are just paying off the interest and the rest of your $$$ will go to your principal.

Over five years, the savings on interest are closer to $200.  That means you are done paying off your student loans approximately 1 month earlier!  It seems like small potatoes but everything adds up.  Because $780 per year for five years means that you have paid off an additional $3,900 in your loans.  That means you have shaved almost TWENTY months off your student loans.  Yes.  That's right.  Suddenly you are debt free (or, student loan debt free) over a year earlier than anticipated.

I can’t emphasize this enough – it’s the small things as much as it is the big things, and its getting that money out your hands and into the hands of the person who will gladly suck at the teat of your interest payments if you let them.  If I walked up to you right now and said "give me $200" would you say yes?  Of course not.  But that's what you are saying to the student loan people (ie banks) every single time you pay interest when you could have avoided it.

My motto is always this – the best way to fight the banks is to pay them off.  They hate people who are debt free.