Heed these words as they may change your life. (I hope you will pass this information to your family and friends so it can help them, too.)

Benjamin Franklin meant well when he stated that “A penny saved is a penny earned.” However, he could not have comprehended the situation in which we Americans find ourselves today. As sharp as he was, Poor Richard (a.k.a. Ben) would have had to bend his mind to understand that in our world today, a penny saved is actually “two” pennies earned.

As a mortgage banker, I consider myself more than just a lender for home purchase and refinance money. I am a debt manager and strategist. Sure, a family’s mortgage is normally their largest debt, but understanding and managing debt—-all types of debt—-is a critical part of creating and preserving family wealth.

For the average person to service one dollar of debt, they must earn much more than one dollar. In fact, the most expensive dollar that a person can possibly spend is the one that’s currently in his pocket because that dollar has already been taxed many times in many ways.

Additionally, most people must spend time, effort, and usually money in order to “earn” their wages. Today, it’s really not a stretch to say that you must earn about two dollars to keep one for yourself.

On the flip-side, it takes very little time and effort to save a dollar. It usually takes commitment and a simple plan to do so. Saving just one dollar means you did not have to earn two, and saving $10 means you did not have to earn $20.

In the mortgage world, this is a huge concept because of the magnitude of the potential savings. Saving $100 dollars a month on your mortgage payment is almost the same as giving yourself a $2,400 annual salary increase because a penny saved is two pennies earned.

Take time to make sure your mortgage is fine-tuned to optimize your savings. Even in light of rising mortgage interest rates, refinancing still make sense for thousands of homeowners.

Timothy Phillips is a mortgage banker and newspaper columnist.  Homebuyers should always consult a professional for guidance specific to their situation.

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