The ups, downs, and occasional sideways bits of trying to be mortgage free

Tahlullah

Sparks of light at the end of that tunnel!

I am wishing you all the positive vibes I have available for you to get saving for the holiday in Tasmania. As a snow bunny, I didn't know Tasmania was a ski destination, bus I suppose I am in the wrong hemisphere.

I guess you have 8 months to save - have to pay for the hols 1 month before you go? So $625 per month and you are there.

I will cheer you on!

Tx

armchairexpert

It's not much of a ski destination, although I think there are maybe a couple of smallish ski fields. Most of the resorts are in Victoria. But we're not skiing: we're going to go visit Cradle Mountain and do a bit of gentle hiking and just see snowy scenery. My kids are born and bred in a warmer part of Australia, so they've literally never seen snow.

Is it really only that much per month? That looks more doable! I was thinking $1k/month but I hadn't sat down and calculated it. Too busy with the self pity.

armchairexpert

Mostly what I've achieved this month is a lot of complaining. Again. However!

UPS
1. Despite all of that, I did manage to make a $360 overpayment (probably shouldn't have done, since I ended the month overspent by $130, but there we go), and all in all I paid off almost exactly $1K. My bank calculator tells me I've shaved another month off the MF date.
2. This month's interest was $681 (down from $719 last month). Before I refinanced, I was paying $1000 a month in interest alone, so that's an amazing drop.
3. I came in well under budget on groceries! First time ever, although this is largely because Mr E was away for ten days. But also, we're really in the habit of baking bread and brewing kombucha and things now, I can't remember the last time we bought shop bread or squash.
4. I have managed to save $1200 for Christmas. I haven't previously budgeted for Christmas so this is a guess, but I think it's fairly easily doable. As I didn't start budgeting in January, this meant some extra top ups some months: will be easier next year.

DOWNS
1. Um, I overspent by $130, not counting Mr E's work expenses which are yet to be reimbursed and also not counting a bunch of things on which I've turned the arrow to the right and borrowed against this coming month.
2. Nothing at all added to savings or the emergency buffers this month, all of which are still woefully underfunded
3. The amount of things that we need to save up for! I can't even think about it, I'll get heart palpitations.

NOVEMBER GOALS

1. Come in under the grocery budget again even though Mr E is here. Budget is $1000 and I need to buy some birthday party bits and Halloween sweets and things like that this month.
2. Build up the buffers. This might mean no overpayment this month. Painful.

TO DOS GENERALLY

1. Buy the girls' birthday presents
2. Make a start on Christmas shopping
3. Make Christmas cake!
4. Lose 5kg before Christmas

armchairexpert

One last post for today, copied and pasted from over at TOPM's thread. She was talking about the idea that one should spend 50% of income on essentials, 30% on discretionaries and luxuries, and 20% on savings.

Mine comes out like this:
Essentials: includes mortgage, rates, bills, food, school fees (this is just the $400/pa per child that covers stationery and things, they're not in a private school), medical costs, mobile phones and internet (We're sim-only deals for phones, there's no percentage for buying the actual phone included, so as far as I'm concerned this is an essential not a luxury): 70% of income.
Discretionary: includes all clothes, toiletries, haircuts, spending money, family entertainment, extra curriculars, pet costs: 18% of income.
Savings: 12% of income on a good month. Includes emergency funds and short term savings goals as well as (entirely theoretical) long term goals.

In fact, I've just realised that amount hides the car costs, which are on a novated lease and come out of Mr E's gross income. Essentials would be closer to 75-80% if I calculated them all back in.

As it is, I've already:

- checked around for the best insurance deals
- gone sim-only for both mobile phones
- checked that we're on the cheapest/most appropriate internet deal for our household (I work from home, so we do need a half-decent connection)
- groceries have been shaved within an inch of their little lives
- refinanced to the lowest mortgage deal I could AND
- put my income up by $1k/33% since the start of the year.

I find those numbers quite amazing. I mean no wonder we can't get ahead. It's entirely housing costs. We earn a bit above the average household income for Australia, BUT the average new mortgage across the country is $374,900, whereas we owe a total of $490K. 30% of our disposable income goes on mortgages alone, average is 25%. Plus it definitely costs us more to run two properties than it would to run one property with the same mortgage, because we pay two sets of council rates, water rates, there are strata fees on Mum's unit, repairs, etc.

So it is what it is. That's a helpful breakdown for me. I do wonder how people I know, who I'm sure don't earn much more than us, seem to be able to buy new clothes and go on holiday. That's how.

Tahlullah

A very useful exercise which puts your finances into perspective. Running 2 houses always drains your income at a rate, because as you say, you have 2 lots of bills for everything and you have to budget twice - insurances, replacements of things that wear out, general household costs. It is this reason I believe I am unable to build the emergency fund to anything above £2k without having to spend from it. One emergency pot feeding 2 houses. It is forever being emptied.

But the upside is that you are preparing for the long haul. When older, you won't need to earn as much to live a comfortable life. But in the interim, life can be very frugal indeed.

Life is about priorities. When following the way of the YNAB, you have to remember that the journey is your life, not the destination. If you focus solely on the destination, you will miss your life. Try to ease up on yourself and perhaps re-look at what is the most important thing to you and your family. Paying off the mortgage 10 years early, or enjoying the things you did on the way to paying it off 10 years later.

armchairexpert

I'm not really trying to get ahead so that one day I can Buy All The Stuff, but so that one day I can work part time and pursue the very low paying work I really want to do. Unless a Basic Universal Income comes in, I can only do that this way. It feels important enough to me to try.

Anyway, yesterday was a NSD without even noticing because I did not sit down for a second. The girls have a week of swimming at school which means rinsing out and drying costumes and towels every evening and repacking their bag and checking it against the checklist every morning. On top of which, Big Girl has to bring in and demonstrate a science experiment today which required some set up from me last night (it's her project, but the set up involved boiling water, and I'm not quite that laissez-faire). On top of that was trick-or-treating, and on top of that was the usual dog walking and cooking dinner and etc. Lots of coming home, dumping bags, changing, going straight to the next task without stopping. I sat down at 9.30pm and almost couldn't move again.

Monday was similarly crazy, with Big Girl due at school half an hour early for an off campus trip, and tomorrow Little Girl has a dentist's appointment straight after school and I promised to go and see them at swimming lessons. It's all mad.

Money news: none. It's November! I can't see all those red arrows any more!

armchairexpert

Another of those ridiculous days today where I'm running from phone meeting to appointment and back again. The girls have swimming at school this week and I had to take my turn to come be a parent helper today. Also a business call with my partner to set the next set of development goals, a phone interview with a new client, Little Girl has a dental appointment this afternoon and Big Girl has developed a nasty looking boil which I am desperately hoping will go away without expensive medical intervention. I have had two takeaway coffees today which is v extravagant but is also substituting for both breakfast and lunch.

Went out to dinner with a friend last night. Planned for, but still a little bit extravagant because I was super hungry and over ordered. Totally worth it though.

armchairexpert

Swimming attendance achieved, dentist's appointment achieved, Big Girl's leg is subsiding without medical intervention, which I'm counting as achieved. Last day of swimming today, thank goodness, they are utterly knackered although Big Girl also has ballet this afternoon which can't be cancelled. Then hopefully an earlyish night for them.

I splurged on some new skin care the other day which I am hoping arrives in today's post: I currently have literally nothing except a bar of soap and some cheap sorbolene cream which I use as moisturiser/cleanser in one, so I have bought all sorts of creams and serums and things from a surprisingly cheap new brand. I'm intrigued to see whether they make a difference. My skin's not awful, but it's red and uneven and just generally unglowy. I will report back!

armchairexpert

Mortgage payment came out today, putting me at $216,153. It's killing me not to make a $153 overpayment, but I am going to grit my teeth and let it ride until the end of the month and then see if the money's available. I have already made an overpayment this month of about $150, which is better than nothing, but next month there are 3 x fortnightly payments due so I need that buffer in my account for now.

(it's killing me though)

Last interest payment was $681. My fortnightly mortgage payment is $647. So my current goal is to get the interest component down past $647 so I'm paying more than 50% of each payment straight off the principal.

Sent Mr E and the girls off to do the grocery shopping today. I reckon I could do it for about $120, because we don't need anything big this week and we're sorted for meat/fish. Taking bets on what he comes back at? My guess is $210.

mfmaybe

I don't think you should get too down-heartened by the % analysis, because propping up 2 houses is not normal. Hopefully the refinancing will be just the pendulum swing that's needed to get ahead of those big bills.

Just a thought. Is your Mum's unit a 1 or a 2 bed? If the latter, any chance it could sustain a lodger?