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

armchairexpert

Ahhh, thank you both for commenting! I have been feeling like I'm talking to myself, which is still useful but not quite as much fun! Thank you both for poking your heads up, it's much appreciated.

It's interesting, and I think a lot of people find this to be the case when they start budgeting seriously (here and on the Debt Free board I see this a lot) - we think we have far more spare money than we do. And then we start budgeting and it seems like every month there's an unexpected expense that puts us back to the starting line. And really, the answer is that that money - the unexpected expense money - was just never available to be spent anyway. We underestimate how much we have to play with and it takes a long time to accept how little left over there really is.

Also this month I feel like I've been working my *coughs* off and I'm not going to earn a huge amount, but that's because I had to take most of last week off to cover school holidays. My income is very bits-and-pieces-ey, so although I'll have to send out eight separate invoices this month (which also means all the guff around the work, the client contacts and following up and checking the briefs, times 8), several of them are for only $100-200. Galling.

Cherryfudge

Your comment on budgets that don't really have much leeway is exactly what I have found with budgetting my time. No wonder it's an uphill struggle.

armchairexpert wrote: »

Also this month I feel like I've been working my *coughs* off and I'm not going to earn a huge amount, but that's because I had to take most of last week off to cover school holidays. My income is very bits-and-pieces-ey, so although I'll have to send out eight separate invoices this month (which also means all the guff around the work, the client contacts and following up and checking the briefs, times 8), several of them are for only $100-200. Galling.

Perhaps think of it this way: the work is behind you and you may not be paid at all if you don't get those invoices out. Therefore you are going to be paid $100-200 per piece of completed paperwork.

Mind you, if it were me, I'd still want to better paying ones.

mfmaybe

armchairexpert wrote: »

Ahhh, thank you both for commenting! I have been feeling like I'm talking to myself, which is still useful but not quite as much fun! Thank you both for poking your heads up, it's much appreciated.

I read (and enjoy) frequently, don't worry! I should use the "thanks" button more though.

I definitely found once I started budgeting properly, including for all the annual bills (eg insurance) and potential bills (eg repairs) that my money never stretches far enough. On the other hand it is rather nice to know that most expenses are budgeted or saved for all the time.

armchairexpert

Cherry, the idea is that the small clients become bigger clients once they trust me and start chucking me bigger projects to do, but it makes some weeks very painful! The invoices aren't the worst part, it's talking to new clients to find out what they want, the work takes longer because it's a new brief, that sort of thing. I'm just whining, frankly.

Mr Expert had the girls today (still school holidays, hanging in there by the skin of my teeth) and stopped at the big gourmet market in the city and they made a surprise dinner for me; Malaysian steamboat, delicious, with carefully chosen music and candles. I don't drink alcohol, so Little Girl (5) poured me a Coke in a wine glass with an umbrella and a stripy straw, bless her dear little heart. I don't know why I merited a surprise dinner, but I wasn't turning it down. I'm just writing this month off, spending-wise, and being thankful that we'll break even - May is a new month.

Cherryfudge

armchairexpert wrote: »

Cherry, the idea is that the small clients become bigger clients once they trust me and start chucking me bigger projects to do, but it makes some weeks very painful! The invoices aren't the worst part, it's talking to new clients to find out what they want, the work takes longer because it's a new brief, that sort of thing.

That sounds like an uphill slog, I hope they hurry up with some bigger projects for you! I'm assuming you're freelance, which is something I once considered but I'm rubbish at applying myself so I do take my hat off to those who can keep on keeping on.

Here's to May! :beer: May you prosper in it.

armchairexpert

May numbers are in, and ...it could be worse, I guess? I managed to pay off $500. That's total: it's an interest-free mortgage, so the principal doesn't go down unless I make an OP, meaning that $500 is the entire sum by which I've reduced it. The good bit is that it's under $220,000 and will stay there now. Because it's a LOC, the total bobs up and down a lot, but I've worked out that it won't go back over that number. (It's different in my sig for reasons)

Three months in I'm getting a clearer picture of the budget. Here's what I'm finding:

$100 for 'home stuff' was ludicrous. In March we spent $650 because we were doing the bathroom up. In April, with no big project lined up, Mr Expert spent $300 on, mostly, plants. He will always, always have a project and he will always see 'things for the garden' as basically free money because it's things for the garden and it all improves our living conditions but it costs money. I'm trying to decide if it would be mean to increase our personal spends and make him buy garden things out of his half.

So really, that's more like $300.

$100/month on clothes is also tricky. In April I needed two sports bras (which would have been $180 full price if I hadn't marshalled vouchers and sale prices). Mr Expert bought two pairs of pyjamas and new running shoes ($200). In March he needed new work shoes and some t-shirts, Big Girl's good leather shoes needed repairing, I bought a secondhand skirt, $200 gone. This months' budget is already gone on the girls' winter dresses, underwear and tights, and it turns out Big Girl also has no winter trousers - I sent her to school this morning in a cobbled together outfit of a summer dress over a long sleeved shirt and a pair of trackpants from her younger sister's pile that don't cover her ankles. My only pair of yoga pants are falling apart, two of my three pairs of leggings have been consigned to the bin, I own zero jumpers. That secondhand skirt is the only addition to my wardrobe in 2017.

So $300.

Spending money is okay at $240 (30pp/pw) which really covers the occasional take away coffee, a book, a pair of headphones, entertaining the girls. Eating out/entertainment at $100/month is also pushing it - one cheap dinner at the local Chinese and it's gone - but there's a lot of overlap between those two items.

Groceries, which I control, are very good. We were spending close to $300 a week; I've got it down to $200 including interim top-up shops.

All in all...B-? At least I know now what a realistic amount to budget is. Unfortunately what it means is that we have a surplus of only $500/month (split across all savings goals but discounting emergency funds) which is not going to get me to my goal or even remotely close.

Treadingonplaymobil

armchairexpert wrote: »

It's interesting, and I think a lot of people find this to be the case when they start budgeting seriously (here and on the Debt Free board I see this a lot) - we think we have far more spare money than we do. And then we start budgeting and it seems like every month there's an unexpected expense that puts us back to the starting line. And really, the answer is that that money - the unexpected expense money - was just never available to be spent anyway. We underestimate how much we have to play with and it takes a long time to accept how little left over there really is.

This x1,000,000 for me at the minute! It feels like there should be lots of flex in our budget (one good income, one variable but ok income, lower housing costs than we've had for years), but actually there is always something to throw the budget off. Our lesson for April is, I think, to expect that and budget for it, rather than to keep hoping for a month where it doesn't happen.

Tahlullah

I have to agree. I have been looking at the budget over the weekend and somehow, cannot find any money to use for overpayments. Once the bills are accounted for, and I begin to budget for the unexpected, which isn't really unexpected, I was just hoping it wouldn't happen, I have no money left and so am left scrabbling for small change.

Well, at least you now now. Good luck will going forward. The small bits add up and make a difference.

armchairexpert

Thank you! Yes, after a night of having imaginary defensive conversations in my head about how I'm trying my best already and nobody can expect me to live on less, blah blah, I've decided to not make my life quite so miserable.

Our finances also have a built in safety valve, which we've been relying on too much in the past years, which is that we get a hefty tax deduction at the end of the year (tax year is 30 June here) because the rental property makes such a huge loss: last year it was around $8,000. Previously, I've decided that as long as we break even during the year, that tax return counts as our annual OP. What happened last year, though, is that we didn't break even; we slowly ate back into the LOC and used up the tax return.

What that means is that even if we do only break even this time around, or make tiny payments, we still have that lump sum due sometime in the next few months. $8k/year is not going to pay off my $220k mortgage, obviously (remember, it's IO), but I've been ignoring it and trying to do the OPs without taking it into account and that's not working. Time for new calculations!

Cherryfudge

I think standing back and recalculating from time to time helps everyone. After all, circumstances change and not always in ways we can easily spot. Costs creep up, unexpected things happen and sometimes we don't need to put as much into one pot as we used to.

I hope the recalculations are useful... if you post them there may be someone able to spot something helpful.