Showing posts with label Mortgage. Show all posts
Showing posts with label Mortgage. Show all posts

Thursday, January 2, 2014

New Year Aspirations 2014

This year, I am keeping my New Year Aspirations SIMPLE!
I get so discouraged when I don’t meet my goals each and every year.  This year, I am going to accomplish them all.

Read the One Year Bible from start to finish
I have read the Bible in 90 Days a couple of years back and that was tough!  I want to wake up and do my devotions every morning in 2014 before I do anything else to start my day.

Lose 40 pounds
Every year I want to lose weight, but this year it is going to happen.  It HAS to happen. 40 lbs is less than a pound a week which does not sound too far-fetched.  Honestly, I just want to feel good in my own skin and be able to lead an active life.

Pay Off the Mortgage
To date, we owe $24,497.32 on our mortgage.  We were able to pay off ½ of the mortgage last year and we hope to pay off the rest this year to be mortgage-free by October 2014!

These are the aspirations I will be focusing on in 2014.


What are your goals for this year?

Thursday, February 21, 2013

Learning to Live on Half our Income


This year, Todd and I are attempting to live on half of our income.  We both make roughly the same amount of income each year, and we had been putting 40% of our combined income toward our savings goals for a couple of months in 2012 with no real pinch in our finances.

Since January 4th, the first paycheck that we received, I have been surprised at how tight the extra 10% feels on our budget.  We are nearly two months into this project of living on half our income and let me tell you, I commend those who live on one income!  Our expenses are extremely low yet we have been feeling the pressure to stay within our goal of living off of 50% of our income this year and next.

I am learning some very valuable lessons while going through this with Todd.

His Spending Habits vs. My Spending Habits
I have known that I am the natural saver in our home; however, I didn’t realize by how much.  If I had control of all the finances, I think we would be doing just fine living on half of our income; however, I would have a very unhappy husband.  J  So really, is it worth it? 

Priorities
Every Friday when Todd gets paid, we have to set our priorities.  What has to be paid this week and what can wait*?  Do we have any money left over to go out or to buy items in bulk?  I am having a really awful day: maybe we should just go to Subway for dinner so I don’t have to cook.  Is it worth it? (The answer is no, by the way.  I had to suck it up and make dinner because I didn’t want us to have to scrape by for the rest of the week just because I was having a bad day.)

*Please know that we are not behind on any of our bills.   The few recurring expenses that we have are usually paid before the statement is even cut.    

Plan Ahead
There are some expenses coming up just around the corner we have to start saving for.  One of them is the 2 weeks off Todd gets (unpaid) during the plant shutdown each July.  Usually, the employees get sent home from work early several times throughout the month due to lack of work even before the plant shuts down for those two weeks.  If we neglect to plan ahead for this, it could be debilitating to our finances in July and may even make us lose momentum.

Communication is Key
We now keep a very low account balance in our checking account because half of our income is immediately transferred over to pay down the principal of our mortgage.  Because of this, there is not much wiggle room in our budget.  I have to keep Todd up to date at all times so that he knows when he can and cannot take a trip to WalMart or pick up the tab for lunch with his parents. 

The Emergency Fund Gives Me Peace of Mind
For me, the Emergency Fund is my security blanket that even allows us to take on this project of paying off our mortgage in 2 years and living on half of our income. Without it, I’m not sure I would be brave enough to take on such a task. 

We Can Get Through Anything Together
Though this new budget of ours has put a little pressure on our marriage, we know we are working toward a common goal.  If we can accomplish this task of living on half our income, we know that if something where to happen with one of our incomes or if we start a family, we can make it.

We are learning very valuable lessons by taking on this project and I am enjoying it every step of the way thus far.  If you are a one-income household, what advice could you share with us?

DISCLAIMER: I feel it is worth mentioning:  I realize how fortunate we are to be able to bring in two incomes and have the opportunity to attempt to live on one income.  This is a learning experience for us so that one day, we can live off of one income, whether that is his or mine. 

Thursday, January 17, 2013

Saving Money: Utilities


We are two weeks into the New Year and as part of Operation Mortgage Payoff, I am attempting to cut our expenses as much as possible.  One way of doing this is to cut back on our utilities. 

I will be the first to admit that our home is an energy “hog” and I hate that we use so much electricity.  The house is mainly run from electricity with the exception of our heat which is propane.

I thought that by purchasing a smaller water heater earlier in 2012 to replace an old 80 gallon inefficient tank (the previous owners of the house had a hair salon on one side of the house) to a 40 gallon efficient tank, that we would see a noticeable decrease in our electric bill.  Unfortunately, this was not the case.

I have been racking my brain to think of ways to cut down on our energy use and this is what I’ve come up with.

Dryer
Back in July, we purchased an energy-efficient washer and dryer.  I enjoyed being able to wash an entire load of laundry from start to finish in less than an hour and a half since owning this new set.  This changed January 1st.

According to the Energy Star efficiency rating, our washing machine uses $16 worth of electricity per year based on 8 loads of laundry a week.  On average, we wash 4 loads of laundry each week.  I am not going to invest alot of time trying to minimize this use of energy.

What I am focusing on is lowering the amount we use our dryer.  Our dryer, though it is new, is not considered “energy efficient.”  There is nothing listed on the machine to show how much energy it uses each and every time we dry our clothes.  That being said, I have been hanging my clothes to dry on a quilt rack and wood drying racks exclusively in 2013.

 
My husband washes his own work clothes at least once a week.  I have attempted to take over this job of his, and so far, have been pretty successfully.  He prefers his clothes to be dried in the dryer; however, I dry them using the racks and then “fluff” them for 5-10 minutes in the dryer.  The “fluff’ mode does not use heat, so it is a win-win for us.  I would be extremely happy if the dryer gets used only once each week.

Oven
It takes a lot of energy to heat up and maintain a constant temperature in a conventional oven.  When I cook something that requires the oven, I am going to attempt to make more than one meal at a time in the oven.  I am using the crock pot more this year in place of using the oven as well as cooking in cast iron skillets on our wood burning stove.

Dishwasher
In the past, we ran the dishwasher 3-4 times a week.  No matter what setting I wash our dishes on (light wash or heavy wash), it takes about 2 hours from start to finish.  I have been washing the dishes by hand and let them dry in the dishwasher overnight.  Previously when we used the dishwasher, I had to pre-rinse anyway, so this isn’t so bad.  I am hoping that by running the dishwasher no more than once a week, we can see a visible change in our electric bill.

The electric company offers a “budget” each year where we have the option to pay one set amount each and every month throughout the year.  We do not take advantage of this offer.  Instead, we pay our bill based on our usage each month.  I feel this helps to keep us on track when it comes to lowering our consumption.  That being said, the only way to determine if we are actually lowering our use of electricity is to compare this year’s usage to our usage in 2012.  In 2012, we used 13,297 kilowatt hours of electricity. (WOW!) I would like to lower our use of electricity by 15% this year, decreasing our use to 11,302 kilowatt hours or less electricity. 

Propane
Our home is heated by a propane furnace.  Currently, we keep the thermostat very low (55 degrees) and heat only the rooms we are using.  If we are going to bed, we start up the potbellied wood-burning stove.  If we are in the family room, we use the propane logs in the fireplace to warm up the room.

I am proud to say that we are still using the same propane that we purchased back in the spring of 2012 to heat our home!  We will need to have the tank filled any week now, but until then, we are definitely saving on our use of propane so far this winter.  On average, we have our tank filled 3 times a year.  My goal is to lower that to just twice this year.


What other ways could we save on the use of our utilities?
I would love to hear your suggestions.

 

Monday, January 7, 2013

Operation Mortgage Payoff


Dave Ramsey often says, “Live like no one else so that later, you can live like no one else.”  This quote runs through my mind often when I want something.  This is also the quote that helps me to pass up those impulse purchases.

While I was driving home from work in the middle of December, I was thinking about our one last debt – the mortgage.  At the end of 2012, the balance of our mortgage was $50,408.57.  Todd and I talked about our goal to have the mortgage paid off in full by the end of 2016 and we were excited about being able to accomplish this.  When I reflected on the remaining balance of the mortgage, I thought about how feasible it would be for us to pay the mortgage off in two years.  I ran the numbers in my head and it was completely attainable to pay off the mortgage.  But there was a catch: Todd had to be 100% on board with the plan.

Surprisingly, Todd was game when I communicated my master plan.  This is how we are going to attempt to pay our mortgage off in the next 24 months.

Save 50% of our income
Back in October, I wrote about how we pay ourselves first before any of our monthly expenditures.  In 2012, we were paying ourselves 40% of our income to meet our financial goals.  In 2013, we will be increasing that amount to 50% in order to help achieve the goal of paying off half of our mortgage in 2013.

Put Off the Unnecessary
The only way we will be able to pay off our mortgage in two years is to put off major home repairs as well as put off purchasing a new vehicle.  We decided that we have enough odds ‘n ends work to do around the house to last us the next several decades years without taking on any additional projects, so that wasn’t an issue.  We also agreed that we would put off purchasing the new vehicle Todd has been dreaming of and we have been saving up for over the past 9 months.  By eliminating these two unnecessary expenditures from our budget will help us pay off 20% of our mortgage each year.

Cut Back
Not only are we cutting back on what we are saving for in 2013 and 2014, we will also be cutting back on our spending.  We are pretty frugal around here, so this is going to entail some creativity.

Our grocery budget is currently $250/month.  My goal is to lower this category of our spending by 25% in 2013 to $187.50/month.  With the help of our garden, I think this goal is achievable without a lot of struggle. 

We are definitely cutting back this year on our travel budget.  We enjoy taking a few trips each year to experience new places.  This year we will be cutting back to one or two trips and they will be close to home and very inexpensive. 

Sell Unwanted Items
I have wanted to go through everything in the house and purge the items we don’t use for years.  This is the year it will get done.  We have already listed and sold some of our possessions on Craigslist over the past few months, but we look forward to getting rid of a lot more. 

Start a Home-Based Business Part-Time
Todd and I have dreams of starting our own business and had plans to move the process along in 2013.  We are putting off the repairs to our home for the business this year but that doesn’t mean we can’t get our feet wet in the business.  We will attempt to grow our customer base (which wont be difficult to do seeing as we have yet to advertise our services and have zero customers) in 2013 so that hopefully we can pull the trigger and make our business a full-time position for one or both of us in upcoming years.  This will not only bring in some extra income but will give us some much-needed experience. 

I realize that we are in a great position to even have the option to do this.  If anything were to change in our lives such as starting a family, losing a job, becoming sick, or taking care of a sick parent, we wouldn’t be able to pay off our mortgage in the next two years.  But for now, while we are able, we are going for it.  We are reaching for the stars.  We are looking forward to living like no one else.

 Side Note: Steve Stewart from MoneyPlanSOS is also in the last few years of his mortgage.  You can listen to his numbers and how he got there on his Podcast Episode 88.

Are you/did you payoff your mortgage early?
I want to hear about what you are doing to make this dream a reality.