Hi, have you checked your interest rates lately?
You could be paying more than you need to and/or making less on your money than you know.
One of the first things the internet will tell you to do when you start looking for ways to put yourself in a better financial situation is to cut costs like cancelling monthly subscriptions you don’t use anymore, renegotiate car or home insurance, coupon, and spend less on things like iced coffee. Gasp. No, ma’am, not that last one.
Those are things you should definitely look into. And I’m all about keeping a money journal and/or monthly budget. It’s one of the key factors that helped me get my stuff together.
But, I’d suggest you take it a step further and check into what your current interest rate is on any loans, credit cards, and bank accounts that you have.
You might have what’s called a variable rate. Basically, they can and most likely will change. Maybe you had an introductory rate of 4% on your mortgage or personal loan for a time period of 3 years, but then after that, your rate changes according to the market. So, you may think you still have an interest rate of 4%, but maybe it’s actually 5.5% now.
Same for the flipside of things. You might think your savings account has a rate of .5% interest that you earn on your money, but maybe that was just an introductory rate and now it’s actually at .01%. Ouch.
If you check your interest rates and they’re not what you thought they were, you have a few choices on what to do. If your loan has a variable rate, you might consider doing what’s called a refinance (fancy word for paying it off with a new loan that has a different interest rate, monthly payment, and length of years for repayment) and seeing if you can get a lower rate…and maybe a lower payment, too, if that’s important to you.
If your bank account interest rate isn’t what you thought it’d be, you can check with them to see if they have any offers for you, or consider moving your money to a new account with a better rate.
BTW – this will be called an Annual Percentage Yield or APY because you’re yielding/earning money and not paying a rate/fee.
The monthly savings and/or earnings might not be HUGE, but hey, neither is that $5/mo subscription and those add up, amiright?
When it comes to loans and credit cards, it will make a difference in the overall amount of money you spend on interest over the time you take to pay it off. If you are currently working on a plan to pay something off, this will come in handy because the lower your rate, the more money you’re actually paying towards paying off the debt itself. Be aware though, if you’re refinancing, there might be a cost attached to that – ask how much, and most importantly, do the calculations to see if that cost is worth it. It might be!
Want to know more about paying off debt and how a little trick called consolidating might help? Check out this post > How to Consolidate Debt
Did this work for you? Tag me in your stories and let me know how surprised you were when investigating … @upturnavenue
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