Eating out added 10 years to my mortgage

Eating out can be dangerous for your waistline—and your bottom line.

Now I don’t dine out much (sorry about the deceptive title), but many people do. Most people also borrow money to buy a house or condo at some point. And most people, unfortunately, are unaware just how much dining out affects the length of their mortgage.

Spending as little as $200 a month on shoes, gadgets, or eating out is an expensive decision if the alternative is paying down debt. Putting the $200 towards a mortgage would trim 9 years and 5 months off of a $200k mortgage at 7%.

That money would also save $101,014 in interest, eliminating the final 113 payments of $1,330.

Now people generally do not enjoy thinking about their decisions in this way, but closing our eyes will cost us.

Economists have a useful term for counting the costs of our actions. Every time we spend our time or money, we forgo other opportunities. The next best thing we could have done with our time or money is our opportunity cost.

In the example, spending $200 on dining provides us with tasty meals and no dirty dishes—on the other hand that same $200 cannot be spent paying down our mortgage, on entertainment, or perhaps providing our children with music lessons.

Life is about more than money

The best way to mathematically spend our money isn’t always the best for us, so you might prefer dining to owning your house sooner. The decision is up to you. But you should remember to think about the opportunities you’re passing on when you spend your time and money.

note: a $200,000 mortgage at 7% APR will cost $1,330.60 a month for 30 years. Simply putting an extra $200 a month towards principal will trim 9 years and 5 months off the mortgage.