Tuesday, January 8, 2013

Little Things

Good Afternoon!

Back in December, I went to pay my student loans for the month of December. I had to wait to pay the loans until the actual due date, which was the 15th. Normally my principal to interest is $304 to $166, but this time is was $231 to principal and $239 to interest. I was so annoyed! I had to think about this and it was because I waited until the due date to pay it. I forgot that the interest is compounded on a daily basis, not monthly. From there, I decided I would no longer wait until the actual due date to pay. This month, I paid the bill on the 1st and the principal I paid was $367 and interest was $122. I was very happy to see all of that money go to principal. Now, I am paying very small amounts on a weekly basis to try to keep the interest earned down, so come time for the payment, I am able to pay more to principal.

No wonder people are not able to pay these off. If they wait until the actual due date, more interest has accumulated. I can't imagine what it is like to miss a payment and have that interest become capitalized! I believe this is the reason we now have the problem we do in America. Some people have to wait until the day they are paid, which commonly falls on the 15th, a common pay date for working Americans.

In the next couple of days, I will talk about the moves I have made in our investment accounts. I am watching these very closely with the looming debt ceiling crisis. More to come on this later.

Have a great day!


  1. Well, most people also get paid on a two-week basis, or even weekly... I'd say most are on one of these two schedules vs fixed schedules (for hourly; for salary, it's probably closer to your 1st/15th paycheck). I did find that interest variation, but could not trace it for the life of me. If I paid too early (2+wks), I'd get charged more interest than if I paid 1wk in advance. The duedate was in between, but I could not come up with a formula for the short amount of time I was tracking this with my parents' car payments. My student loan was charging me a lot more for paying early than on the duedate too. No idea what's up with that...

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