I decided to use my time wisely and get our finances sorted.
|Our flooded street|
We all know that if you put extra savings onto your mortgage it can make a huge difference to paying your home off sooner, but the difficulty is in getting those extra savings. I have read many blogs and books and received advice about different approaches on how to save and cutting down on expenses, but the harsh reality is that no matter how much you save or how you do it, unless you actually put that extra money into your mortgage account it is not going to make a scrap of difference.
I need to take all those little savings from here and there and put them together and at the end of the month deposit them into our mortgage account. Once we do that and see the difference it is making I think we will be more encouraged to keep going and try harder.
|Some light humour to ease the pain|
I set about with a plan to put systems in place to begin those savings in earnest and the first place to start is to know where your income comes from and how much you actually earn. Then you need to know where it all goes, what do we spend our money on each month?
I have started a spreadsheet (because I love Excel) but you could use a notebook or bookkeeping journal which are easily purchased in most Newsagent's. I have also armed myself with a small notebook and pen in my handbag and I have a mobile phone which allows me to take notes. With all of these tools I am setting off on a voyage of discovery to track our spending over the next few weeks and months in the belief that if you know where your money is going you can target bad habits and reduce your spending.
The Strategic Spending spreadsheet tracks our income from all sources and our regular expenses like the mortgage, electricity and gas, petrol, car maintenance, groceries, phones, insurances, home maintenance, entertainment etc.
It has taken me most of the day to fill in all our details and I am trying to be as accurate as possible and now that I have this panoramic view of how 2012 could possibly pan out financially for our family it is rather exciting. I can now see where we spend too much and what is possible in the way of savings, getting together an emergency fund, paying extra off our mortgage and planning for holidays. Before this exercise I was just in a state of wondering how we were going to manage and not really knowing whether we were sinking or swimming.
You can find this spreadsheet on this website http://www.onelife.com.au/ . You have to join the website to access the financial tools, however I am not necessarily recommending this website or financial planning as I am still researching it myself. You have to do what works for you.
Here is a handy little mortgage calculator that you can play around with to see how much faster you can pay off your home.