I decided that personal finance education could be spread a lot easier if readers were presented the material in nice short quick bursts. I know the world is moving at a fast pace, and most of us don’t want to spend more than a minute looking at things like money or retirement. So, I’ve decided to just post a PF word of the day every now and then. Quick definition, common uses, and sentence example. Feel free to provide feedback in the comment section if this ends up being a total waste.

The word of the day is: Amortization schedule

Definition: Amoritization schedule is a list of your mortgage payments month over month, year over year. This list is broken down by interest paid, principal paid, mortgage amount, and remaining balance. The list of payments goes from the beginning of the payments till the amount due is zero.

Common uses: Amortization schedules are used to show a detailed breakdown of your mortgage payments. This is very valuable to help you understand what exactly is involved in having a mortgage. Maybe if more people in the mid 2000’s understood amortization schedules, we wouldn’t be having such financial woes.

Sentence: I was looking at my amortization schedule for my current house and realized I’m going to be paying more every month in interest than the principal until I am 20 years into my 30 year mortgage.

The more you know.