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Money can buy stuff. But a wise person uses it to buy options. Money gives you the option to choose the direction of your life.
This Thanksgiving I am grateful that I took control of my finances and became debt free. To quantify the accomplishment, I calculated the real cost (total cost) of becoming debt free. The real cost of a loan includes the original principal balance plus the interest and other fees over the lifetime of the loan.
How much did I end up paying to clear the debt?
In August 2014, when I decided to pay off my loans early instead of just making the minimum payments, the principal was about $80,000. How much did I actually pay to clear it? Including interest, I paid over $94,000 to become debt free.
How much would I have paid if I didn’t pay it off early?
Drrrrrrrrrrrrrrrrrum-roll, please ‒ ba-dum-bum-CHING. I would have paid over $110,000. Ouch! I saved at least $16,000 by paying it off early.
Final reflection on the accomplishment
Again, I am thankful that I decided to become debt free. Instead of paying money to “the Bank,” I have the freedom to invest in my family, my friends, and myself. Now, I can do anything I want. The options are unlimited. Hope you had a wonderful Thanksgiving!
By Simone, creator of Slim Fit Wallet
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