Things to do with your refinance savings
You often hear the best investment for your Refinance savings – is to apply it to your principal amount each month, so that you can pay off your loan early, right? However, there may be some other options you may not have considered…
- Build your Savings Account or Emergency Fund
If you applied $300.00 /month every month for 5 years, to an emergency fund, did you know you’d have $18,000 in that fund, not including any interest earned? That could really come in handy in an emergency.
- Build an Education Fund for your Children
If you applied $300.00 each month for 10 years or 120 months, that would add up to $36,000, Enough to pay for 4 years tuition in a state sponsored school.
- Invest your Savings
You could invest monthly savings into your 401K plan, or IRA, which may provide additional tax benefits in addition to compounded savings, depending upon the rate of return.
- Pay Off Short-Term Debt
Imagine you have two credit cards, both charging 10% to 15% interest rates, and with an average balance of $5000 each. Your total monthly credit card payments for these cards could be as high as $300.00 per month. If you applied the full $300.00 savings in addition to your minimum monthly payments for these cards, you could realistically retire both of them in 3-4 years, and result in an eventual additional Cash Flow of $600.00 each month! ($300.00 in ongoing refinance savings + $300 in monthly savings from debt retirement)
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