Most people I know make it a daily habit to go to their local coffee shop on the way to or from work each day. It’s easy to spend $5 or more a day for the luxury of a cup of coffee.
As a mobile mortgage broker I’m guilty of it myself since I meet many of my face-to-face clients at the local Starbucks. Sitting down over a coffee, however, allows me to put into perspective the real savings you can achieve just by skipping something as simple as that morning latte.
Here’s how the numbers break down:
By forgoing the morning coffee each weekday and saving the $5, you would save an extra $25/week and be able to put an extra $1300 down on your mortgage each year.
Assuming a $250,000 mortgage with a 4.5% interest rate amortized over 25 years, making bi-weekly accelerated payments, if you made a lump sum payment of $50 each bi-weekly payment:
By skipping the weekday morning coffee you could pay your mortgage off 11 years and 9 months earlier and save a whopping $72,496.91 in interest over the life of your mortgage!
Think about that the next time you’re in line to order a grande latte.
