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

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".

5 comments:

change is a good thing said...

You are doing so well with this whole "death to the mortgage" thing. I'm always impressed, amazed and inspired when I check your progress. New hiking boots are a relatively inexpensive item in comparison to paying off the mortgage, however, deferring the cost now, even for several months will save you more money in the long run. The sooner you put more money to your mortgage the less interest you will be charged. It's a really great way to look at even small expenditures now v later. I'm going to have to keep thinking about this when thinking of my own expenses. Great post!

The Executioner said...

Thanks. I hope to keep impressing! It's been a good experiment so far. I just wish it didn't have to take so long!

Daizy said...

Just found your blog through Move to Portugal's blog. Impressive progress! I love to find other people that are killing their mortgages.

The Executioner said...

Thanks! I see you're following the super-fast mortgage payoff plan. Nice work! I've linked you and will be following your progress.

arizona auto insurance said...

my wife and I see eye to eye on finances and it sounds like you also have a great working relationship with your spouse when it comes to finances. That is such a critical part of a marriage/relationship. And it's one part that is not figured out until it's too late for many couples.