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Mortgage free.  Financially Free. Financially independent.

Buzz words or something real and attainable and something to take very seriously?

I just finished reading Financial Freedom: Personal Finance Experts Reveal Their Journey by Bryan from BucksandCents.com and the paragraph that just floored me was,

” We continue on this path for the next 40 years until we reach something called retirement.  At that point our biggest expense, which is our house, will be paid off.

During this 30-40 year period, the bank made TONS of money off of you and that monthly mortgage payment you sent in 360 times; one every month.  You have paid them above and beyond what the cost of that house initially was because of something called mortgage loan interest.

If you follow this pathway, which the majority of the world’s population does in developed countries, you will be able to achieve financial freedom in your late 60s or early 70s.”

LATE 60’s or EARLY 70’s.     Let that sink in for a minute.

 

What is the actual point of living a life like this?  Having it spelled out this way by Bryan it seems CRAZY!

I read the piece aloud to Mr. Spend Anon and he did a wee Google for me and apparently, our current system of mortgages for housing as we know it today was born somewhere in the 1930’s.  Mr. Spend Anon’s Mom was born in 1931….hmmm.

Mortgages originated in England when people did not have the resources to purchase land in one transaction. Buyers would get loans directly from the seller – no banks or outside parties were involved. Unlike today, purchasers were not able to live on the land until the entire amount was paid. And, if they failed to keep up with payments, they would forfeit their right to the land as well as any prior payments they made to the seller. (Mortgages – a brief history)

My gut churning reaction to BucksandCents.com’s simple post was –

…when did modern day slavery become an everyday norm?  So much so that we have actually been conned into thinking this so good for us and something that we should aspire to?

On a mission to become mortgage free.

I’ve spent the last hour going over my budget spreadsheets and plugging our recently renegotiated Mortgage details into Dave Ramsey’s Mortgage Payoff Calendar.  We can do this, but not in five years. Aagh!!!

Our mortgage only allows us to pay $20,000 a year extra off the principal (If we can save that much) and there’s a little over $193,000 to clear.  With the best intentions in the world we will end our new five year term with a balance of around $55,000.  Still, now there’s a Goal.

Let’s apply the principles of S.M.A.R.T to our Goal.

Specific:-  Mortgage free in five years.  Pretty specific if you ask me.  Not much room for faffing.

Measurable :- You betcha.  Using Dave Ramsey’s calculator I can see the balance after each regular mortgage payment and again after each annual lump sum.

Achievable:-  hmm – bit of a sticky wicket here.  An end game balance of around $55,000 could be covered with a line of credit until I’m able to claim my private UK pension at the age of 55 (approx 8 months after the five year term ends).  Also, our game plan means we have to find an extra $1500 to $2000 per month to throw at this.  OK.  I can absolutely do $1000 per month, most months.  Need to work on the rest then.

Realistic:- If I say this will be then THIS WILL BE.  I have a cast iron will and opposable thumbs.  It’s gonna be a slog though.  The budgets say it’s almost do-able as is… just need a final smidge of a push.

Timely:- Extremely timely!  Our first payment of the newly negotiated deal was Dec 21st. Today is Dec 29th. Time to saddle up.

 

Where to find the extra $1500 – $2000 per month?

Having scoured Pinterest for great ideas on “How to save more money“; “How to make more money“; “what we did to be mortgage free“, etc I’m a bit stumped.  You see 19 out of the 21 “things to stop paying for” I don’t do anyway.

Since our own Personal Economic collapse of 2016 we have actively cut our costs, grown food, made things instead of buying and have managed to live comfortably off one income, which was part time.

Mr. Spend Anon and I only run one vehicle (saving insurance costs, repairs and gas).  We haven’t had cell phones for almost three years.  Mr. SA is a retired chef so meals are cooked from ingredients, from scratch.  Meal plans and grocery lists feature heavily.

We ditched the expensive cable an EON ago. Our home has a wood stove for heating and live in virtual darkness because I won’t allow the lights to remain on.  My family did this to be Debt free, which we accomplished in under two years, after having over $88,000 in unsecured debt.

OK then – making more money it is.

Cue back to work for 5 days a week from three.  I’m in finance so bookkeeping jobs, etc are pretty easy for me to find.  New position (very) recently secured for three days nets $1620 per month after tax but “normal job”, which was three days, goes down to two*, losing me $700 per month (until my hourly wage increases after three months probation).   Overall Income boost $920 per month for now but should increase to circa $1400 a month by April.

*more to do with the Company not being busy enough to keep me entertained for three days a week..nothing more.

Additional “at home” bookkeeping client taking up approx 5 hours / month – after tax say $150.

Blogging and Affiliate Marketing:-  Total income to date… less than $500 (since July so – 6 months).  There’s potential here as I’m fairly new to the game and I REALLY love it.  Another reason why I went down to three days a week working.  Keep on plugging away here I guess.

Book sales.  Epic.  Sold one – to my mum. Total commission $7.  Fanks Mum!

Only need to sell another 27 thousand five hundred and seventy and I’ve cracked it.

Cut backs.

Ugh! looks like I’m gong to gave to cut back on my Fizz.  I do like a cold glass of Fizz in the evenings and perhaps we have been hitting it a little hard this holiday season.  (Don’t judge).

Kids – not really able to sell them to science as it is deemed unethical.  Will be offloading Child #1 in March though for her “Around Europe trip” and then off to Further Educate herself in Calgary.  Could rent out her room I suppose. At this stage we will be reducing the groceries and gas budget by $390 per month (she doesn’t drive to chauffeuring her around will stop).  Only having to cater to #NumberOneSon will mean Mr. Spend Anon and I can eat more frugally (we love soups and stews – kids hate em!).

Adding this up (assuming my math is correct), after #1daughter leaves in March we should be netting around $1940 a month in extra income / savings.

BOOM!

Mission accomplished.

Just have to make it April on reduced quantities of wine…. Wish me luck!

XO

Anna