It’s true. That Starbucks habit could drain well over $150,000 from your retirement fund.
Sounds insane – but go with it for a moment and let me prove it to you.
There are three habits that seem of little consequence, but in the long run will cost you dearly. Here they are:
- The daily Starbucks fix
- Buying lunch
- Drinking bottled water
Assume you ditch these habits in favor of flipping the switch on your coffee pot, brown bagging it and filling a reusable plastic bottle with your own water. Do the math and you’ll find as much as $250 – maybe even more (depending on whether you favor the caramel machiatto over a drip with room). Now assume you dump this found money into your mortgage.
In this example, I’ve taken a 5% fixed rate mortgage that our recovering Starbucks addict took out in January 2010. I plugged the numbers into our Mortgage Minder Dashboard (which is available for free, by the way). Kicking all three habits knocked 69 payments off of the mortgage:
If your goal is to be mortgage free at some point in life, even better news awaits. Check out the screen shot taken from this example. This 40 year old wouldn’t have paid off his mortgage until just before he turned 70, but now he’s done by 63. And he’s added $150,000 of cash to his retirement years because he won’t have a mortgage payment anymore:
It’s amazing how the little things in your financial life can secretly steal your retirement dreams. Making a few simple changes today will provide a big payoff later.
PS – Go to our website at www.mindyourownmortgage.com, sign up for our free membership and plug in your numbers. See how much you can save!