2012 Financial Goals

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geoff_tewierik
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Re: 2012 Financial Goals

Postby geoff_tewierik » Thu Mar 08, 2012 3:40 pm

chasingthegoodlife wrote:Satelite - To Thailand with a friend, just a short trip. Neither of us have been before and I can't wait.

Geoff - Thanks for the reminder. Thinking back to when we moved in here, getting the gas and electricity sorted out was easy but the connection fee for our internet service was insane.

Any suggestions as to what other new home expenses I need to budget for? So far I'm thinking about council rates, owners corporation fees (including insurance) and water rates. And setting aside some money each month for major maintenance as needed (ie new water heater).

Rates are done quarterly, so that could be the week after you move in and then not for another three months, or it could be 2.5 months after you move in. Part of your settlement costs for the property will be pro rata on that quarters rates.

Water should be a seperate bill, again quarterly, but I'm only going by what we have here in brisbane, it's been 15 years since I lived in Victoria and paid bills down there :)

Contemplate not getting a home phone line connected if you live on a mobile phone. That's totally dependant on how you communicate with other people, and whether you're after a fixed ADSL2+ line for your new place. The Whirlpool forums will give you a good idea on what's available for that area and I know they were getting NBN around there, so you might get lucky dependant on what side of the street you are on :D Bundled deals inc line rental from TPG or iiNet are good options.

Marcopolo
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Re: 2012 Financial Goals

Postby Marcopolo » Thu Mar 08, 2012 11:04 pm

chasingthegoodlife wrote:Payday update:
$2533 / $3000 Home Deposit Fund (84%)
$213 / $3000 Travel Fund (7%)
$0 / $???? Extra Mortgage Repayments (0%)

On the house front, I have met with two mortgage brokers, decided which one I am going to use, and submitted all the necessary documents for pre-approval. I should hear back sometime next week.

It's kind of scary to think this is actually happening.


Chasingthegoodlife -

What are you going to do with only $3,000 in a house deposit fund , or is the first goal to get to $3,000 . In my neck of the woods , on the Monterey Peninsula , California , that won't go very far . Are you considering putting 3 % down on a $100,00 house ?

Please advise.

Marcopolo

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Fri Mar 09, 2012 4:33 am

Satellite - thank you! Do you have any particular suggestions for things to experience, local foods to try etc?

Geoff - How good is Whirlpool? I love it. Definitely won't be getting a landline at the new place unless it works out better for ADSL, we have lived happily without one for a year and never go over our mobile plans. One thing we found with our current place though was that a lot of ADSL providers could not service our house for naked ADSL due to not having spare connections in the exchange. I don't even understand what that means, so I have appointed my partner multimedia director of the new property and tasked him with sorting all that out :)

Marcopolo - $3k is the last of my deposit. I already had a larger amount saved, but was aiming to add another 3k to the pile this year. Around these parts $500k is a cheap house so you would definitely need more than 3k to enter the market.

Satellite
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Re: 2012 Financial Goals

Postby Satellite » Sun Mar 11, 2012 3:42 pm

chasingthegoodlife wrote: Do you have any particular suggestions for things to experience.
Not sure where you will be in Thailand but I assume you will spend at least some time in Bangkok...

1) Safari World – Excellent zoo type place with open air “James Bond” type action shows. Great entertainment.
2) Samphran Elephant Ground & Zoo – great elephant shows
3) Chatuchak Weekend Market – 35 acres, over 15,000 stalls. Every Saturday & Sunday. One of the biggest and best markets I have been too. You can find just about anything here.
4) Catch a Long Tail Boat Ride and go for a tour of the Bangkok Floating Market.
5) Siam Park City – amusement park/water park
6) Temple of the Emerald Buddha (Wat Phra Kaeo) – tourist attraction
7) Snake Farm (Queen Saovabha Memorial Institute) – excellent interactive snake park and show.
8 ) Samutprakan Crocodile Farm & Zoo – probably one of the worlds biggest crocodile farms. Over 60,000 crocs. Crocodile wrestling…
9) Wonder World Fun Park
10) Siam Ocean World – expensive to get in but not bad.
11) Dreamworld – amusement park aimed at under 10 year olds.
12) Bungsamran Fishing Park – almost guaranteed to catch monster size fish
13) Fantasia Lagoon – Water park on top of shopping mall.
14) Dusit Zoo
15) Ayutthaya – UNESCA World Heritage Site – Excellent long boat ride around city. Also go to Elephantstay for a hands-on elephant experience
16) Patpong – Adult entertainment district. Well worth a visit.

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Mon Apr 16, 2012 4:09 am

(Satellite - thanks so much for your suggestions!).

It's been a while since I updated this, but the only major change is that I can now truthfully say: I OWN A HOUSE!

We won't get to move in until later in the year when the tenants move out. Part of me is impatient to get in there ASAP and start decorating, but it will definitely be good to have some time to tie up all the loose ends and plan the move without the stress of organising settlement at the same time.

So what now? Is it time to ... BURN THE MORTGAGE?

Current home loan balance: $250,000
Current travel savings fund: $2644

Home loan goal (principal paid): $10,000
Travel fund goal: $3000

What are everyone's hot tips for paying down their home loans?

CecilyC
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Re: 2012 Financial Goals

Postby CecilyC » Mon Apr 16, 2012 2:34 pm

Try to double the principal right away and get used to not having the money to spend. Or even if you only can do half the principal, do that. The sooner you start, the sooner you can be done.

Set a target for each year. Keep track of your process, since it's going to seem to take a very long time.

And automate, automate, automate, if you can!

CecilyC

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Tue Apr 24, 2012 5:18 pm

Thanks Cecily. You remain my Burn the Mortgage hero.

I am using this spreadsheet (with a few modifications) to track my progress and test different repayment scenarios:
http://www.vertex42.com/Calculators/hom ... lator.html

I think I am going to post my updated 'principle paid' total each month right after my mortgage payment comes out. And maybe how far ahead I am on the standard 30-year amortization. Whatever it takes to stay motivated right?

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Thu May 10, 2012 2:11 pm

First mortgage payment was charged this morning, I feel like such an adult!

Goal Update:
Mortgage principle paid: 3672.27/10,000 (36%)
Travel Fund: 2764/3000 (92%)

However, some of the extra principle payment may be redrawn in a few months to cover my taxes (I have no idea how being a temporary landlord is going to effect my tax liability yet). In the meantime, I am getting a 6.45% return by paying that money onto the mortgage.

According to my trusty mortgage calculator spreadsheet, within the first month I have paid as much principle off the loan as I would have done over 1 year and 3 months by making the minimum repayment. Insane!

Progress will slow down now as part of that extra payment is money I had left over after settlement costs, but just seeing how far ahead I am on the principle is so motivating. No takeaway latte for me today :)

geoff_tewierik
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Re: 2012 Financial Goals

Postby geoff_tewierik » Thu May 10, 2012 8:35 pm

Congrats! Nothing like getting in front from the start. Wherever possible, ignore the fact you can redraw, it's THE DEVIL!!! ;)

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Sun Jun 10, 2012 6:23 pm

Goal Update:
Mortgage principal paid: 5088.05/10,000 (50%)
Travel Fund: 2800/3000 (93%)

Some thoughts:
  • After 2 months, I have paid off as much principal as I would have after 1 year and 9 months making only the minimum payment. Hurray!
  • However, this is only 2% of my total loan balance - scary!
  • I don't think I was ambitious enough with my repayment target - I will probably revise this after I have done my taxes.
  • My interest rate has gone down twice since I took out my loan, which is awesome. I have maintained my previous payment and now a little bit extra is coming off the principal each month.
  • Inspired by an article I read recently, I had a look at my mobile phone provider's website and worked out that once my contract expires in the next few months I can pretty much halve my phone bill for the same level of service. Now the question is - should I direct this windfall to my mortgage or to a few little luxuries? Or possibly towards starting a small investment in shares, which I would like to learn more about.

geoff_tewierik
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Re: 2012 Financial Goals

Postby geoff_tewierik » Mon Jun 11, 2012 4:39 pm

Get the cheaper plan, stick the money saved into a spare online account and let it build up.

No point dropping it into shares until you have at least $1k to invest, and then it may be best for you to put it into a managed fund if you can support their required monthly minimum deposit amount.

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Tue Jun 12, 2012 3:11 am

That's the problem with shares isn't it? At $20+ per trade you need to put a fair chunk of change forward to make it worthwhile. And when I DO have a big pile of dollars, I'd rather put them towards the mortgage (or, let's be honest, a summer in France).

Perhaps I should devote my attention to better understanding the investment options in my super.

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Tue Jul 10, 2012 2:46 pm

Goal Update:
Mortgage principal paid: 6582.95/10,000 (65%)
Travel Fund: 3000/3000 (100%)

  • The trip is now fully funded, hurrah! For the last few months I've just been siphoning my leftover 'play money' for the week into the travel fund to finish it off, so it didn't affect mortgage progress. It's much easier to say no to a coffee or taxi when you know you will shortly be reaping the rewards on a Thai beach.
  • I'm debating whether to make travel a regular line item in my budget. While I'm still (somewhat) young and childless, I'd like to try and take an overseas trip each year. I might do a separate post about my thoughts on this.
  • The mortgage continues to chug along at a satisfying speed. After 3 months, I have now paid off as much principal as I would have after 2 years and 2 months making only the minimum payment. I love seeing the amount of my regular payment going towards principal gradually rising :)

chasingthegoodlife
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Re: 2012 Financial Goals

Postby chasingthegoodlife » Mon Aug 13, 2012 4:02 am

Goal Update:
Mortgage principal paid: 8000/10,000 (80%)
Travel Fund: Goal completed, Thailand was awesome.

  • After four months, I have paid off as much principal as I would have after two years and eight months of only making the minimum payments. I am still tracking everything on a spreadsheet and coloring in the cells as I make progress, need to stay motivated somehow since I'm still only 3% of the way to final payoff :|
  • I did a quick estimate of my taxes over the weekend. Usually I do my own tax return, but I don't understand the rental income/deductions section so I am going to get some advice from an accountant. However, I tried to do a 'worse case scenario' before deductions and it looks like I will owe, but not so much that I need to pull money out of the mortgage.
  • I don't think my goal was ambitious enough - time for new goals!

New Goals:
  • Pay $15,000 towards mortgage principal by December 31st.
  • Save $2000 towards overseas travel in mid 2013. Destination to be confirmed.
  • Read a book about investment or economics each month until the end of the year.

New Goal Update:
Mortgage principal paid: 8000/15,000 (53%)
Travel fund: 255/2000 (12%)
Reading currently: Alan Kohler's Eureka Report: A Guide to Personal Investing.

CecilyC
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Re: 2012 Financial Goals

Postby CecilyC » Mon Aug 13, 2012 10:11 am

Hey Chasing!

You are making great progress on that first year goal -- way to go! Wish I could say that I had paid off 10 or 15K the first year of my mortgage! :party: In fact, I won't be able to say that I've paid off 10k in one year, myself, until next year.

I notice you decided to move the goalposts on yourself. The balance between ambition and realism is hard to strike, I have found, both emotionally and financially. It took me a while to figure out how much pain I am willing to endure and how much elbow room I need in my budget. Emotionally, I tend to get depressed when I reach too far and don't make it. And don't forget that emergency fund! Anticipating taxes (or other things) is a great idea; nothing sucks more than reaching (or getting close to reaching) a goal and then having to take two steps back.

Anyway, keep up the good work! And keep tracking your progress!


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