How One Tool Has Saved Me Thousands of Dollars

One simple device has saved me thousands of dollars over the years. No -- it's not a not a hammer, not a saw, not a screwdriver or even a power tool, it's a financial tool; a financial calculator to be specific.

I was introduced to this handheld gadget back in college when I was taking a finance course required of my business degree. At the time, it was simply a required tool for the class, something that -- like most other required course materials -- was expensive and that I considered a waste of money. Little did I know that this calculator, which was but a means to an end of my college finance work, would become a highly valued item in my personal finance life.

For many people, online calculators can do the same work as my financial calculator and that's fine. Here are some of the applications for which I utilize my financial calculator to discover literally thousands of dollars in savings.

Determining Mortgage Payments

Using my financial calculator to determine mortgage payments, as well as the difference in interest over time when it comes to these payments has made for the greatest of my related savings over the years.

For example, when determining whether to go with a 15-year or a 30-year mortgage, my calculator allowed me to determine that while a 30-year mortgage would decrease our monthly payments by nearly half, over the course of time, it would end up almost doubling the amount of interest we paid to the bank. This would equate to nearly $75,000 extra dollars! Not only this, but by figuring in the difference that extra mortgage payments make during the course of our loan, I've been able to save us additional thousands of dollars in interest that would otherwise have gone to the bank, not to mention build our equity quicker.

Interest

My financial calculator also assists me with determining interest when it comes to that owed me, rather than vice versa. When it comes to savings, bonds, certificates of deposit, my retirement plan, and similar investments, I can utilize my calculator not only to project future growth but to help me determine differences in growth over various timeframes and at different interest rates. I can also figure what the future values of these investments will be.

Knowing and understanding this information often makes it easier (at least for me) to save money, since it provides me with a specific number -- a reward or goal if you will -- for my efforts. It can be difficult to put money aside knowing that it may only be earning a paltry 3% interest, but equating that interest figure into actual dollars -- say $1000 over the next several years -- can make the sacrifice of stashing that money away more meaningful and easier to endure.

Running Various Calculations for Articles

As a personal finance writer, understanding and being able to run various calculations for research in my work equates to extra money in my pocket. People aren't as interested in hearing money saving advice or techniques from someone who doesn't understand the methodology behind it.

In this way, although it's actually my education rather than the calculator itself that is earning me money, the calculator acts as a helpful tool in saving me time and effort when running various equations for articles, and gives my work a bit more credibility. This credibility in turn becomes higher readership, which in turn makes for higher article payments.

So that $100 investment over a decade ago for what I considered at the time "just another calculator" has assisted me in reaping tens of thousands of dollars in savings over the course of that timeframe.

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.