Progress to Date

  • Original Loan Amount: $204,000.00
  • Balance at Beginning of 5-year Goal (1/1/08): $188,983.82 @ 6.00%
  • Balance at Refinance in February 2009: $148,000.00 @ 4.625%
  • Outstanding Balance: $0.00 (PAID IN FULL!!!)
  • Latest Payment Date: April 2011
  • Latest Additional Principal Amount: $17,623.22
  • Amount Ahead of Schedule (since refinance): $121,462
  • Time Ahead of Schedule (since refinance): 7 years 10 months
  • Interest Saved Last Month: $23,972.48
  • Total Interest Saved: $28,435.55 ($1,037.74 on original mortgage; $27,397.81 on current mortgage)
  • Months Remaining in 5-year Goal: 20
  • Average Monthly Principal Needed to Meet Goal: N/A (Goal achieved)
  • Progress List Explained

Tuesday, September 30, 2008

Monthly Summary: September 2008

Goodbye, September. Goodbye, summer. Hello, autumn colors and baseball playoffs.

Without any extra income forecast in our budget for October and November, we made a smaller-than-normal extra principal payment in September. This keeps a buffer in our bank account while still allowing us to make another modest dent in the mortgage balance.

The September payment was our 29th of 180 scheduled payments on our 15-year loan, and the ninth since we set our five-year goal.

We started the month with a balance of $160,287.98. A $1,500 extra principal payment when combined with our regular monthly principal amount brought the total principal payment to $2,420.03 in September. The outstanding balance fell to $157,867.95.

We are over $24,299 ahead of schedule on the mortgage. If we abandoned this project now and made minimum payments for the duration of the term, we'd still pay off the loan two years and four months early.

This month we saved $113.43 in interest. To date we've avoided $499.26 in interest payments.

The average monthly principal required for us to meet our five-year goal rose slightly to $3,095.45, as we didn't match the amount required from last month. However, despite our underachieving September, we're still in good shape to meet our goal of a $37,796.76 reduction in principal in 2008. We have three months left this year to bring the balance down another $6,680.89, which amounts to $2,226.96 per month. This is consistent with the smallest total principal payments we've made during the past nine months, so I feel confident we can achieve our goal for Year One.

We're going to watch every penny over the next few months to stick within our budget. After nine months of our more frugal lifestyle, it's becoming easier and easier to resist the desire to spend.

Saturday, September 20, 2008

Bicycle Maintenance

I spent a couple of hours in the sunshine today working on my bicycle. When we were visiting my family in August, my brother-in-law gave me a demonstration on how to adjust the disc brakes, shifters, and other moving parts on his bicycle. I came back excited to do the same work on my own bike, and found that my components were different, which initially discouraged me. I had been procrastinating recently, but over the past week the brakes became noticeably less responsive, so today I pulled out all of the literature that came with my bicycle and read through it, beginning to end. It was descriptive enough for me to (eventually) figure out how I could make the necessary adjustments on my own. I'm glad I had seen my brother-in-law's demonstration, because it would have been much more difficult to perform the maintenance on my bicycle relying only the printed material. Now my brakes are tight, my gears shift nicely, and my chain is clean and silent.

I definitely belong to the low-cost school of bicycle maintenance. While a true gearhead would mount the bicycle on a repair stand in the garage (to hold the wheels off the ground with the moving parts at eye level), I wheeled my bicycle to the end of the driveway and turned it upside-down, letting it rest on the seat and the handlebars. I will confess to spending $10 last month to buy a multi-purpose bicycle maintenance tool (with hex-heads and screwdrivers of various sizes), but otherwise I didn't have to spend any new money to do the repair work. I'm not sure what the bike shop would have charged for a tune-up, so I don't know how much money I "saved" by doing the work myself. Although avoiding the repair bill was nice, I really appreciated staying at home instead of dealing with the hassle of riding (or driving) the bike down to the shop. I got to enjoy my own space, in the company of the dogs (resting in the grass and enjoying the sunshine and nice cool weather). And, of course, I had the satisfaction of learning a new skill which I hope to continue to improve on in the future. I'm also pleased to report that I'm now adept at replacing innertubes (a task which once seemed daunting to me).

I don't know how much longer I'll be able to rely on the bicycle as my primary mode of transportation this year. I started riding to and from work during the last week of March, after daylight saving time had already started, when the days were growing longer. Though we're still at least a couple of months away from lingering snow or ice here in New Hampshire, the arrival of the autumnal equinox on Monday means that I won't have as much sunshine to light my way (and keep me visible to drivers on the road). Daylight saving time ends on November 2 this year. The US Naval Observatory has a website which provides daily sunrise/sunset data for any spot in the world. For example, on October 31, the sun will rise after 7 AM here in NH, and will set before 6 PM. This means I could be riding in semi-darkness before and after work. Just after the return to standard time, on November 4, the sun will rise before 6:30 AM (fine) but will set around 4:30 PM (dangerous). If I want to ride in November, I am definitely going to need illumination, for my own benefit (to see where I'm going) and the benefit of those around me (so drivers don't run over me with their cars). I haven't decided yet what to do. I don't want to spend a bunch of money buying new illumination gadgets for the bicycle if I'm only going to be able to use them for a few weeks anyway. By December I'm sure it will be icy enough in the mornings that I'll have to stop riding altogether. At least I have a beautiful companion (my wife) to carpool with during the winter months!

Wednesday, September 10, 2008

Controlling Spending

Even though we've managed to make steady progress during the first eight months of our five-year goal period, my wife and I realize we had some help along the way. First, we sold our second car back in May, resulting in a one-time cash receipt. And second, my wife worked a second job for a few months during the summer, but that's finished, and we probably can't count on that income again until June 2009 at the earliest. For the rest of 2008, we will be relying solely on our regular income to generate extra principal payments. This means that watching our expenses will be critical if we want to stay on our current pace. We both have a list of items that we'd like to have right now, but we're going to try to cut back on (or eliminate?) anything that falls into the "want" category unless it truly becomes a "need".

For example, my hiking boots have started to show their age and will probably not last another full hiking season (this means that the seams in the leather are starting to split open and will eventually tear free from the sole). However, with winter coming, I won't be using them as much as I have been recently (just some light autumn day trips and the occasional walk in snowshoes during the cold months). Therefore, I'm going to defer that expense for as long as possible, keeping a eye out for any sales which would reduce the cost of the new boots significantly. Meanwhile, cash that might have been used to buy a new pair of boots (at full price) in September will be used to pay down the mortgage. While the cost of boots is insignificant compared to our outstanding mortgage balance, when combined with all of the other expenses we're deferring or eliminating, the cumulative effect should help us stay well-positioned to meet our goal.

Note: I realize not everyone would classify hiking boots as a "need". I am using a broader definition of "need" which is not limited to survival items, but which includes things we use regularly. By this definition, the first pair of hiking boots is a "need", while the second pair is a "want".

Monday, September 1, 2008

Monthly Summary: August 2008

As I mentioned in my previous entry, the $1,500 extra principal payment we sent to our lender during the first week of August was credited against the July balance. I've updated the July Summary to reflect the correct totals.

The August payment was the 28th of 180 scheduled payments on the 15-year mortgage. It was our eighth payment of the 60-month goal period.

Our outstanding balance at the beginning of August (adjusted) was $164,188.51. Through a combination of lower expenses and extra income, we were able to make an additional principal payment of $3,000 this month, for a total principal payment of $3,900.53. This reduced our debt to $160,287.98.

We now find ourselves $22,686 ahead of schedule on our payments. Our work so far has reduced the term length by 2 years and 2 months.

We saved $97.94 in interest this month, bringing the total interest saved to $385.83.

Because we paid more in August than the average principal required to meet our five-year goal, the new average payment amount fell to $3,082.46.

I'm very encouraged by our progress so far in 2008. With two thirds of the year now behind us, we find ourselves ahead of our goal pace for the first eight months. Let's keep this train rolling!