Monday, April 9, 2012

Changing Our Spending

Dave and I have had quite a few talks about our finances of late and have finally agreed upon a new strategy (for us anyways). Basically we will live off Dave's wage and about 35% of mine with 65% of my wage going to the house. At the moment that will be paying for the painting but after this it will be going directly to our mortgage.

I was keen to live off Daves plus about 5% of my wage, but Dave pointed out that we needed to have savings separate from the mortgage as we don't want to be in the position of having to redraw the loan everytime we have a big unexpected expense.

We should eventually be able to put about 80% toward the mortgages once we have built up a separate savings. Once we have that buffer in place we will be able to go higher. I hope! If this actually works we *should* in theory have our mortgage paid off in about 8 years-ish. More if we are really vigilant or have a income increase or a rate drop.

I just want to see the light at the end of the tunnel. It's quite inspiring to read other bloggers who have managed it! It feels a little like an impossible dream but from next payday this is the plan.

One of the reasons for our rejigging is we were discussing the term "lifestyle inflation". This is the term for when your income increases so does your expenditure. We have done that. We have somewhat relished in it after being on quite a low single income then going to pretty good dual incomes. We've realised we are just spending alot of our disposable income sometimes thoughtfully, sometimes not. So that is where all this started and I can see it as a fairly common situation as well, I don't have to cast my very far to see we are not the only ones. Hopefully there is now one less!

*Image from Cimexus

No comments:

Post a Comment