Daily Interest & Motivation

What does a 14% interest rate on a $3,000 credit card balance really mean?
What does a 6% rate on $22,000 car loan balance really mean?

Sometimes, to fully understand the impact that debt can have on your life, you need to break it down into more meaningful chunks. For me, breaking down that interest cost to an estimated daily amount was very beneficial and eye-opening!

Let's say you have a credit card with a $3,000 balance and an interest rate of 13.99%. We can get a decent estimate the your daily interest rate by merely dividing your interest rate by 365 (days in a year).

13.99% / 365 = 0.0383% per day

Now, that 0.0383% sure doesn't sound like much, but when you multiply by your balance:

0.0383% * $3,000 = $1.15 per day!

By itself, you may say "it's only a little over a dollar a day!", but think of it this way: that's a $1.15 every day, whether you work all day, sleep all day, go on vacation, whatever. EVERY DAY. How would you feel if you woke up every morning and as soon as you walked out the front door, somebody would hold out their hand and demand $1.15? I'd get sick of that pretty fast! But, that's exactly what you're doing, just in a more deceptive way.

Want an even more extreme example?

Let's say you bought a shiny new car last year and owe $22,000 at 8.5% interest. I'll do the math again:

8.5% / 365 = 0.0178% per day

0.0178% * $22,000 = $5.12 per day!

In other words, you're forking over a Lincoln every single day just for interest on that loan! $5.12 a day would pay for my lunch every day!

Fortunately, every payment you make drops that daily interest down a bit more. Making extra payments on the principle drops it even faster.

As you can see, it wouldn't take long for your daily interest to add up to $10, $15, or even $20 a day. Couldn't you use an extra $10 a day?

YFNN

Be Still My Calculating Heart

spread•sheet (sprěd'shēt'):
n.
1. A piece of paper with rows and columns for recording data for use in comparative analysis.
2. An accounting or bookkeeping program that displays data in rows and columns on a screen.

I need to let the whole world know that I love spreadsheets. Make no mistake; I am absolutely, positively, 100% head-over-heels in love with spreadsheets. In grade school, when I learned just a few basic techniques on one of the first Microsoft Excel programs, I found that Lady Spreadsheet had her hooks in me and was never going to let go...and I never, ever wanted her to.

Now, it should be a given that I use spreadsheets every day at work. What good nerd wouldn't? But, I use spreadsheets extensively in even my daily personal life. Finances, to-do lists, Christmas card databases, inventories; spreadsheets hold them all together. I keep no less than thirty different spreadsheets I've written updated regularly. They're tracking, calculating, and listing various aspects of my life, and each one of them warms my heart in a different way. We're not talking simple ones, either. Oh, no. I've got them automatically updating, creating charts and graphs, forecasting, and monitoring countless variables and data.

I know what you're thinking: "That man has lost his #@$%! mind!" Let me try to explain:

da•ta (dā'tə, dāt'ə, dä'tə)
pl.n.
1. Factual information, especially information organized for analysis or used to reason or make decisions.
2. Numerical or other information represented in a form suitable for processing by computer.
3. Values derived from scientific experiments.
4. Plural of datum.

I'm a data man. I love data. I literally can not get enough. The more, the better. I want measurements, assessments, and quantifications until I'm drowning it. I want as much numerical information as I can get my hands on. It's the reason I walk with a pedometer. It's the reason I track household expenditures to the penny. It's the reason I count the number of steps from my office at work to the car. I crave numerical information.

With this constant stream of information constantly coming at me, I need a way to store, organize, and analyze it. That's where spreadsheets come in. As far as I'm concerned, they have no competition. They're the reason I can tell you how much my take-home pay will change if I up my 401(k) contributions by a percent (-$22.90) or how many gallons of gas I put into my motorcycle on September 24th (3.26).

I know, I know. You still may not completely understand my passion, so here in list form is why I love spreadsheets so:

1.) Automation - If I change a number on a spreadsheet, it can automatically re-run every calculation based on that change. Even if it's three hundred and forty-two formulas away, it'll do it, and do it instantly.

2.) Error elimination - I know that if I enter a formula correctly the first time, the spreadsheet will never make a silly math error, like forgetting to carry the four. It's perfect every time.

3.) Charts and graphs - There is nothing I like better than a solid, informative chart or graph. It can convey information so clearly, so concisely, and provide an understanding that no data table could ever dream of. Spreadsheets can generate them beautifully.

4.) Organization - Data is kept in nice, neat columns and rows. Everything is aligned properly. Data can be labeled and sorted with colors, fonts, or even animation. Organization will set you free!

5.) Flexibility - They can be used for simple lists, or the most complex financial statement. They're just as happy storing your Christmas card list as they are at calculating complex failure analyses. I know because I do both.

6.) Power - There's no better way to express the meaning of hundreds of thousands of data points than by using a spreadsheet to illustrate it by generating a simple graph or reduced data table.

7.) Speed - Instantaneous calculation. I'm pretty good at punching numbers with my TI-85 calculator, but I'm no match for the lightning-like quickness of Excel.

If you're afraid of spreadsheets, please don't be. They're perfectly amiable, and are eager to be your best friend.

YFNN