A bit of history. 2020 I finished on Simple Savings with the hope I would be buying a home. We all know what 2020 will be remembered for but I did manage to buy a home. I also managed to incorporate a health scare. All is well health wise and we moved into our home May the 7th 2020. Me and my two teenagers. Now here's the thing,I was 64 when I got the mortgage. I had to borrow through a second tier lender because of my age and they would only give it to me for 15 years. I borrowed $332,365 it was structured like this....$12,356 was on a flexible plan meaning I could pay as much as I wanted as long as the minimum was paid.The interest rate was a huge15.49% and they gave me 7 years to pay that off. The remainder was $320,000 interest only at 5.4%For the first year. So of course I wanted to get rid of that $12,356 as soon as possible. At this time I was earning good money and threw everything at it and I managed to get rid of it in 4 months.
I got a bit lazy after I paid that off and just continued to pay the $1600 each month on the $320000. I saved a little but spent a bit here and there as well.I then found out that I could pay back $10,000 of the principle without it affecting anything but not a cent more other wise I would have to pay a fee for breaking the fixed period. So the first thing I did was up the monthly payments to $1900.After a couple of months I asked them for a transaction summary(There is no online services) And to my horror I saw that I had paid back, including the $12,356 ,$14,486.36 But in interest I had paid a huge $11,210.65....OMG I was gob smacked. So here is what I decided to do......
1.Focus on getting the mortgage down in five years.
2.Researched all the saving challenges I could find and came up with some myself.I had to keep it fun and I had to be working on at least one of them each day.
3. Make sure my sinking funds,Rates,shoolFees,holidays.and bills accounts were getting added to each fortnight so I didn't need to dip into my savings to pay these.
Now a good wack was going onto the mortgage anyway,$19000 a month. I Have decided to double that.This means my wage from my main job will be servicing this mortgage. I have another income stream of not quite $20,000 a year. We will be living on that.
So anything I can save above and beyond my normal wage will be going into the mortgage fund and added to the two payments of $1900.The secret will be to pay it into the Mortgage account every chance I get as the interest is calculated daily.So I can only pay up to $10,000 off the principle until it gets renewed in May.So at the moment the balance is$315,664.29 And I plan to get it down $310,664.29 by the beginning of May 2021.
So what saving challenges have I been doing.
1. I remember this one from years ago on simple savings. I want a $1000 but it looks huge so just save $1 a 1000 times. As soon as any cash adds up to $1 it goes in a tin and then recorded on a sheet. Since the 1st of Jan I have 135 dollars. As part of this $1000 I am also saving all the $5 notes that come to me. I have $150 worth of 5's total is$285. I have a piece of graph paper with 1000 squares on it and for each dollar that goes into the tin or $5 note a square gets coloured in. I may or may not transfer this over to the savings account before the $1000 is reached I'm thinking about this.
2.I budget $3 a day for power, I can check each day how much we spend. Anything below the three dollars goes into the savings account. Yesterday we only used $1.93 so $1.7 went in. I only started this challenge on Tuesday and have $3.33 but I like this as I do it every day.
I will post once a week on here what my total is ,savings and mortgage balance.The balance will be readjusted each month when they send me a transaction summary.
3. Each Friday I take a Card from a kids Bingo game and choose a number. Depending how much money I think I can smuggle from my cash envelopes or from an account I will transfer over to savings. Of course this all has to be doable so the number that I chose this week was 48 but instead of $48 I made it $4.80. it's important for me to make it work and to do something everyday.
4. Each Monday I pick a playing card from a pack and find that money and pay that across. Last Monday was a Ace which is $11. I took that from my food envelope.Again I could have paid $1.10 but I wanted to push the boat out haha.