Bang for your buck

You will hear many financial wizards like Suze Orman suggest that you make an additional mortgage payment each year  as an extra boost in reducing your mortgage balance and to increase your deduction for mortgage interest paid to be claimed at tax time.

The problem is,  that the time you’re thinking about doing this is usually at the end of the year, just after all of the expense of the holidays and just before those huge credit card bills come home to roost,  eek!

Here is a slightly more proactive approach that you can try during the year,(much like my earlier comment on round up your bills).  Round up your mortgage payment!  If you add in an additional amount each month, you may equal or exceed the amount of a months payment over the year, but taken in smaller increments. (As the saying goes~ how do you eat an elephant?, one bite at a time!)

A good time to  take a look at this idea is when the bank makes an escrow account adjustment, if they have lowered your overall payment  continue with paying the old amount.  If they have increased your payment, look at rounding the new payment up to the next whole number.  If you can add $80 – $100 per month you will be doing well, taking this stance can dramatically reduce your mortgage term. And the good part is you don’t have to make it formal and do it by autopay but when you do have the ca$h ~ round it up.  Plus IF your bank will allow you to prepay the interest ~ that gives you a bigger deduction of mortgage interest for your tax return.  Added bang for your buck.