Monday, 6 May 2013

Mortgage Plan Revisited – Monthly Payments

A lot has happened since I first formulated my Mortgage Plan.  While the numbers for how I can make the mortgage disappear are still valid I have had to go back and take a look at where the money is coming from.  The biggest change has been that I will not be seeing disability benefits at my current pay level.  I wish I could tell you why but I don’t actually know how the calculations work.  Apparently they just type people’s information into the computer and it spits out an answer.  No one I spoke to seems to be able to do the calculations themselves.  Add to that the fact that I have been accepted to start my Masters in September and could potentially see a 20% pay cut. 

As things stand I:
- made my 10% lump sum payment for the year
- have enough money from rent to cover my double ups until September
- am on track to finish saving for a car and emergency savings by September
- have $19,913.45 in savings to put towards my mortgage

So I have decided to take a slightly different approach to the problem and divided it in half; the monthly double ups and the yearly 10%. 

I am challenging myself to come up with the money for double ups ($1,422.56 this year and $1,564.80 next November) entirely from my monthly paycheck. 

If my pay drops to 80% I will see $2878.71 every month while I do my Masters.  I am hoping to divide it as follows:

Mortgage – $1,564.80 (as of next November so I’ll plan for it now)
House Maintenance - $250.00
Housing Taxes - $182.50
House Insurance - $72.00
Utilities – $230

Savings - $290

Transportation – $15 (I’ll get a “free” bus pass with my tuition)

Food - $100
Cell – $25
Internet - $50
Health Insurance – $23.52
Clothes - $5
Gifts - $5
Misc - $10
Big Ticket Item - $25
Entertainment - $10
Social/Sports - $5
Financial Planning - $14

Left over - $1.89

Yes, I realize that it is a supper squeaky budget, but at the drop of a hat I can move my mortgage payments back to $646.62, thus freeing up $918.18 a month.  The sooner I make extra payments the more of an impact they have on interest earned.  Since I’m always up for a challenge I plan on giving this a go and seeing what happens. 

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