Milestones - The Mortgage

Long time followers of this blog will know that I have some pretty big long term goals. One of them is paying my mortgage off in 5 years. You can find the details of my plan here.

Having big goals is great but they can seem daunting, which means that in order to reach them you need to break them down into smaller chunks. Each time you reach a mile stone you celebrate. This gives you a sense of achievement and the energy to keep going.

For example, every year when I make my 10% payment I celebrate. Sometimes it means a special dessert, or a night out with my friends, or even just a happy dance. I also celebrate when I hit owning 30% or 40% of my house. Today I hit another big milestone that I've been looking forward to for months.

Today the amount that is outstanding on my mortgage went from 6 digits to 5.

My outstanding mortgage is now $99,918.35. This brings my ownership up to 47.7% and gives me a total of $91,081.65 in equity. The next big milestone that I'm looking forward to is owning 50% of my house. I should reach this point in 4 months.

I look forward to celebrating with you then.  

Mortgage Update

I thought that it was about time that I give an update on the progress on my mortgage. If you've had the chance to mosey on over to my goals page or have followed my blog for a prolonged period of time then you'll know that it is my goal to have my mortgage paid off 5 years from when I got it. That would be the 8th of November 2017. This is when my term is up and by having the house paid off will mean that I don't have to worry about an increase in interest rates and that my money can start heading towards some other really big goals.

There are two portions to my being able to pay off my mortgage in 5 years. The first is making a 10% payment against my mortgage every year and the second is a combination of increasing my payments by 10% each year and doubling up my payment every month.

PART 1

Since my mortgage started at $152,000 each year I can make a lump sum payment of $15,200. I have successfully made the 10% payments for the first and second year. I have the payment for the third year sitting in the bank and part of the fourth year as well. The final year I'll only need $1,900 since paying more then that will have me paid off ahead of time and I'll incur penalties.

Year 1	$15,200.00	Paid
Year 2	$15,200.00	Paid
Year 3	$15,200.00	$15,200.00
Year 4	$15,200.00	$5,499.47
Year 5	$1,900.00	$0.00
	Total Needed	Total Saved
	$62,700.00	$51,099.47

Since I have $20,699.47 sitting in the bank for my 10% payments I only have a short fall of $11,600.53. Since I should have a double pay check coming at the end of the month (my disability insurance is on a different schedule than my work and I just started working again) it should get knocked down to about $9,000. I can come up with that $9,000 by raiding my car savings fund should worse come to worse, however, I am pretty confident that I can come up with that amount over the next three years with tax returns, bonuses, and extra money off my pay checks. 

PART 2

The monthly portion has been a bit more difficult, especially since I took a pay cut to go back to Graduate school, and since that pay has been irregular and of uncertain amounts. Each month I have to pay $646.62 towards my mortgage. I have increased that each year by 10% and I double it up each month so each month I pay $1,564.82. All of this comes off my monthly pay check and the plan is to continue that. A bit challenging after my pay cut but it mostly came down to picking priorities. I don't currently have transportation costs since I commute on my student bus pass and savings is currently at $0. Dropping retirement savings was a bit of a struggle at first. However, I decided that it would make sense to wait until the 2015 fiscal year to make RRSP contributions since I'll be in such a low tax bracket this year. I also figure that being a student again I'm ahead of the game seeing as my net worth is still increasing as opposed to decreasing. By the end of the mortgage term I'll be paying close to $2,000 a month towards my mortgage. So for the next three and a half years I'll need to concentrate on keeping my income high and my expenses low. But all in all it seems doable. 

CONCLUSION

I have to admit when I first signed my mortgage papers a year and a half ago I wasn't sure if I would be able to hit my goal. But I told people about it. I told my family, my financial adviser, the people who were handing me the mortgage papers, and all my lovely blog followers. As of today I own 47% of my home (see the goals page for more details). From where I'm sitting now the goal of paying my mortgage  off in 5 years suddenly seems very possible, almost matter of fact.

So the next time someone asks - I'm not planning to pay off my mortgage in 5 years, I AM going to pay off my mortgage in 5 years. 

Financial Autopilot

Over the past four months I've been a tad busy. (Insert me rolling on the floor laughing at the understatement of the century.) As a result my finances got interesting. I basically went on autopilot for four months. Pay check came in, got divided up, and bills got paid. But other than that finances got ignored.

Then the new year came and I took stock of where I was and was very happy. My good habits were sufficient to put me in a very good place. This month when I looked at my net worth I realized that I had surpassed my goal of being financially self sustaining. I've hit a net worth of $161,347.49 and I only needed to $159,400 to proclaim my goal completed. I had passed it (a year and a half early) and didn't even realize it.

If you're wondering what this financially self sustaining thing is click on the link bellow and you'll get the full explanation. 

Financially Self Sustaining

Goal:  $159,400 by July 2015

Current:  $161,347.49

101.22%

START

END

All of this was possible because I had instilled good financial habits including spending little, saving a lot and investing every month like clockwork. Other mile stones I've hit are:

-I'm down to 14 years left on my mortgage. 

-I have enough money set aside for this years 10% payment on my mortgage ($15,200) which I can pay down on the 8th of November 2014. (This will be my third of four payments for this amount, the fifth 10% payment will be approximately $1,900 so that I don't pay off my mortgage before the five year term is up.) The mortgage plan is going really smoothly and I'm supper happy with the progress. 

-I have just over  $6,400 set aside to put in my RRSP once I have the room after tax time. I should have $10,440 worth of room this year so I'll be able to fill up over half of my RRSP contribution room right off the bat. The rest of the room I'll be able to fill up over the 2014 year with contributions of $335 a month. So over the year I'll use all my room up for maximum tax refund. 

-My total Retirement Savings have reached the happy total of $29,140. Retirement is best saved for when your not actually looking at the pot grow. 

New Year

I generally don't partake in large New Year Celebrations. I spend it with may family, we'll have a nice dinner, a movie or games and then a small toast (Egg Nog!) when the count down is over. Despite the fact that our celebrations aren't grand I've always enjoyed New Years Eve. There's just something about standing on the cusp of a new year that makes me excited about what the next year is going to hold. After all the last year was grand so the next one should be stupendous. Here's what 2014 has in store for me:

-Four masters classes in four months. (The normal load is three but I don't do things small.)

-I'll start taking respite foster care placements. I've working at the approval for 7 months, but the social worker in charge of my file says it will be signed soon and I can start the fun part.

-Lots of new stories written down. I've been writing stories down since I was a kid, but it was just in the past November that I made it a priority, and that feels great. In 2014 I'll plan on spending an minimum hour a day (20 min on the bus to work, 30 min on my lunch break and 20 min on the bus home) writing fiction. Who knows? Maybe I'll even manage to sell a story.

-Summer vacation at the cottage. With my cousins summer vacation is always a hoot and nature doesn't get any better than my grandfather's cottage.

-Start my thesis. Kind of a big scary unknown, but I've got some great classmates and a couple of really supportive supervisors.

-At my current rate of saving I should become Financially Self Sustaining sometime in 2014. Which means that, if I really had to, I could live off of my Net Worth indefinitely. (Granted there would be no fun and my house would have to be sold for more modest accommodations, but I could keep a roof over my head and food on the table.)

In short my 2014 looks like it's going to hold a lot of interesting happenings, and I'm looking forward to it.

Writing Fun

Many of you will know that I was absent from this blog a fair bit last moth because I was partaking in an absolutely silly venture. I signed up with NaNoWriMo (National Novel Writing Month) to write a 50,000 word book in November. I can now say that I won!

Yes folks, over the course of 30 days I pounded out 50,000 words in the form of a novel. Either I'm really good or I need my head checked. So what did I learn from this insane venture?

1. Friends are important. One of my good friends also took part in and won the challenge. We had each others backs that whole time and e-mails back and forth were frequent. We pushed each other and then got to celebrate together at the end.

2. I had cut active fun out of my life way too much. Sure I took in some passive fun, usually watching TV while I made and ate supper or folded laundry, but I wasn't DOING things that I enjoyed. Writing a novel every day was to be constantly thinking planning and plotting, on the bus, during chores, and as I slept. I was always excited about getting just a couple minutes alone to pound out some words.

3. I can manage a heck of a lot when I put my mind to it. I worked 32 hours a week and was doing a full time masters (including final projects) while I wrote my book. Nothing else suffered as I dedicated myself to my writing during my off time, if anything I felt more balanced.

4. I need to set more writing goals and work at them earnestly. My friend from point 1 will be helping me out with this by holding me accountable as I hold her accountable.

5. I am so doing this next year. A novel in a month is sooooooooo much fun. Especially when there several 100 thousand other people doing it too.

End November Goal Review & Salad Waste

First things first I had to waste the last serving of a wonderful salad because one of the ingredients had gone off. I made a huge bowl of it at the beginning of the week and just kept eating it. The down side is that when one part goes the whole thing need to be tossed. The up side is that I actually ate salad this week. The result being I will make more week long salads and just make sure that I use ingredients that are roughly the same age.

Lets take a quick look at how goals shaped up over the last month.

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [It's on auto pilot and I'm looking forward to more RRSP room next year.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [I put my second 10% principle payment down this month and now own 43% of my house.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [One take home exam and one big paper and I will have passed my first semester.]

Social

-Join two new clubs in the local area.  CHECK [I’m actually up to two writers groups plus quilting.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [Getting ready to launch query letters at people again, plus I'm 48,443 words into my second novel.]

-Become a respite foster parent. CHECK [I’m in the process of being matched up.]

-Finish my current crafting projects.  NOPE [But Christmas break is coming which is usually a very productive time for me in this arena.] 

A respectable 86%. December goals will be (1) getting my school work done in the first half, (2) spend some time on crafts over Christmas, and (3) keep up the good novel writing habits I developed in November. 

Goal Review End September

I was kind of curious to see how my goals list was going since I started my Masters. 

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [I’ve started thinking about strategies for optimizing investments in my TFSA and RRSP when the new year rolls around.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [Not sure what my hours are going to look like especially in the winter semester so this may slow down. On the other hand the second half of the 5 year period is post masters so I may see a pay raise for the second half.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [I’m having lots of fun, and the concepts aren’t too hard.]

Social

-Join two new clubs in the local area.  CHECK [I’m actually up to two writers groups plus quilting.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [I have once again launched my book to two agents, one ha said no, I’m still waiting on the other.]

-Become a respite foster parent. CHECK [I’ve got my rooms ready (finally) and have spoken to my worker about possibilities for weekend placements.]

-Finish my current crafting projects.  NOPE [Well I’ve done some stuff. The only thing is that I can’t sew in 15 min intervals. I need to know that I’ll have at least an hour uninterrupted. This will slow down until my next school break.] 

A respectable 86%. For October I’m not going to worry about the crafting or where my novel is. I will be concentrating on my studies and on getting started with foster care.  

Goals and better late than never

I really did have the very best of intentions to get my food waste blog post up yesterday. Then I got sick and best intentions were all left behind. For those disappointed souls here is my waste - six potatoes that went kind of yellow and fuzzy.
Usually I keep them in the fridge so that I can get through at 10 pounds before they go. But when I got my room mate a couple of months ago they go moved out and I forgot to put them back. Lesson learned!

Man that was a fast month, it's kind of all a fuzzy happy daze!

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [I've got my eye on the clock waiting to make my next RRSP contribution, sometimes time goes sooo sloooow.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [I've hit 33.3% ownership, one whole third of the house is mine.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [I’m as ready as I'll every be for the start next tuesday.]

Social

-Join two new clubs in the local area.  CHECK [Actually surpassed this a little, I'm now in two writers group and quilting is about to start again.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [It's been sent to another couple agents, I start waiting again.]

-Become a respite foster parent. CHECK [PRIDE is done and I'm waiting for my social worker to come back from vacation to finish my homestudy.]

-Take a big backpacking trip solo. [This goal got trashed, instead I had a blast up at my grandparent's cottage.] 

-Finish my current crafting projects.  NOPE [Yeah, I haven't touched a needle in 2 months.] 

A respectful 86% this month.  September's going to have a lot of changes so I'm not to bothered about doing all my goals equally. At the moment I'm just going to concentrate on getting on an even footing for my masters and diving into foster parenting. 

Goal Review End July

July was a really fun month, unfortunately my daily to do list has not been moving along with any particular speed. 

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [I’ve got to love how my system just chugs away without me having to think about it.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [I keep making progress towards my third 10% payment.  Also arranged my schedule so I won’t have to take a pay cut until around December.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  NOPE [I’ve got some reading to do and some extra studying I set for myself to get a leg up on my thesis, but I’ve not put time aside to do it, life keeps happening.]

Social

-Join two new clubs in the local area.  CHECK [I’m checking out a new writers group in the area, made up of a very nice group of folks.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [I’m in the process of making some final edits to it before I launch it once again into the great abyss.]

-Become a respite foster parent. CHECK [I’m done my PRIDE class, home study still not complete due to my social worker’s case load but it sounds like the very, very latest that I’ll be fully qualified is the end of August.]

-Take a big backpacking trip solo. [This goal got trashed, see why here.] 

-Finish my current crafting projects.  NOPE [After the big push to get my brother’s wedding gift done I’ve kind of slacked off, guess I should get back at it.] 

Down to a dismal 71% (actually a bit surprising, I thought it would be a lot worse).  August will concentrate on 1.Get some studying done for my Master’s (really, this time I’m serious) 2. Get my manuscript back out there.  3. Get back to work on my crafting.  

Revisiting my Vacation Goal

Good goals are flexible and change with the person who's made them.  That's not an excuse to leave your plan in the dust at every bump in the road, however, it is a good reason to revisit what your goals are and why you want to reach them.

Since mid October I have had the goal to "Take a big backpacking trip solo" and I have been faithfully saving the cash to do so each month and not taking a single day of vacation (if I'm paying to fly some where I want as many days in that spot as I can.)  I've been hemming and hawing over this goal for a while now and I'll take you through my "Goal Revisiting" process.  

What was my original motivation?

-Escape.  When I first started dreaming of travel my life was falling apart.  While the job I was working was sometimes interesting it also included bouts of tedious work and one of my boss's was particularly aggravating.  The place that I worked looked like a cross between my old high school and the prison I worked at for 4 months.  I was isolated by the fact that there was no one else with my rank there the majority of the time, my good boss was frequently traveling, and I could go several days in a row without actually talking to someone.  I truly wanted to be any place else for a number of months.

-Down time.  Every one needs a bit of downtime, and I hadn't had any for a while.

-Learning.  I wanted to visit other cultures and historic sights.  They say you learn twice the amount of stuff about yourself while traveling as you do at home.  I wanted to put this to the test.

-See amazing sights.  I have a list of things that I want to see, to take in the grandeur, marvel at things that are truly one of a kind.

-Fill the status quo.  I have several friends/relatives who are about my age who have gone backpacking and spent weeks in exotic locals.  It seems to be the thing that a 20 something does before settling down.

Are these motivations still relevant?

-Escape, not at all.  I'm at a great place and feel no need to leave it all behind or to get free.  I am no longer desperate to be anywhere else except for here.

-Down time.  I do still need some but don't necessarily need to go some where else to achieve it.

-Learning.  I always want to learn more.  But there are a hundred different ways to learn.  Add to that the fact that my grandfather has offered to teach me some new hands on skills if I help out for a week around his cottage.  I don't need to jump on an airplane to learn something valuable.

-See amazing sights.  Thinking back some of the most amazing sights I have ever seen have been of my countries natural beauty.  I remember holding perfectly still as a loon swam no more than 4 meters away from me, or watching the sun rise an set away from the crush of humanity.  There may be majestic sights abroad but there are just as many in my back yard.

-Fill the status quo, I can't believe I was measuring myself!  I'm only human sometimes but stepping back and taking another look gave me another perspective.  Sure I'd love to see all the things that they've seen that said I could spend my life looking at every single sight another human has seen.  Just because someone else has seen it instead of me doesn't mean that it is a better sight than what I've taken in.

The thing is that I can hit all my still relevant motivations by staying near home and spending less money.  Add to that the fact that all the vacations that I have truly enjoyed I have enjoyed because I have spent it with people I care about.  I can't get that backpacking solo.

I'm not saying I will never do it, but at the moment I am happy to go for a simpler and less costly vacation.  As a result I am going to use up my saved vacation days by taking a week off in August to go to my Grandparent's cottage and the remaining days I will use to take off one day a week for the months of September and October allowing me to still be working full time while doing my Masters and keeping my pay from falling for another couple weeks.  As for the money I have saved thus far, a grand total of $1,404.68 I am planning on moving that to my House Payments account and using it for part of my yearly 10% payment.

Goal Review End June

Given the general chaos cause by my brothers wedding my goal review got pushed back and ended up on today, the 5^th of the new month.  I guess it’s better late than never.  Let me first comment on my usual Food Waste Friday.  Turns out that upon leaving my house mate hid some vegetables in the bottom of my fridge.  (Ok, I wasn’t looking all that hard to begin with, I was a tad busy.)  Anyways last night I had to do something with the cabbage that she left and which was going bad.  So I made my very first coleslaw (which wasn’t half bad!)  The next part is my monthly goal review. 

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [My RRSP and Locked-in Account are all set up and my savings are chugging along, though I do need to see my bank about some more investments.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [I’m keeping up with the payments and now that my emergency fund is full and my car fund is almost full I can pay each monthly double up (total of $1,422.56) from my pay check.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [I’m in the process of signing up for classes, doing some review, can’t wait to actually start.]

Social

-Join two new clubs in the local area.  CHECK [Quilting has stopped for the summer but writing group’s still going as long as I host.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [Unfortunately after sending three chapters in to an agent they decided it wasn’t for them, oh well, there are other fish in the sea.]

-Become a respite foster parent. CHECK [I’ve done 6 of the 10 courses so far and I have another 2/3 meetings with my assessor.  Hopefully I’ll be done by the and of the month.]

-Take a big backpacking trip solo. CHECK [I’m still saving for this but I get the feeling I’m going to be revisiting this goal (more later.)] 

-Finish my current crafting projects.  CHECK [I did finish the table cloth I was making in time for my brothers wedding (you can see it here) though it did mean a couple of late nights to get it done.] 

Once again I pulled in a marvelous 100%.  That said I’m going to have too look at adding new goals/updating the ones that I have.  In July I want to focus on a couple of things.  1.Get some studying done for my Master’s 2. Get my manuscript back out there.  3. Take a good long look at my travel plans. 

Food Waste Meets Goal Review End May

It being both a Friday and the end of the month I get to do a double post!  First off the only food that got binned this week was the remnants of a kitchen experiment.  Meet the not so tasty split pea salad that I made and tried to eat.  I did manage to eat most of it besides the fact that it was decidedly bland and had way too much onion.  At this point it’s a bit to old to consume to I’m tossing the rest with a certain cense of relief.  The next part is my monthly goal review. 

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [My RRSP and Locked-in Account are all set up and I just keep setting aside my 10%.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [Revised my mortgage plan to make sure it was still do-able.  Also bringing in some extra money by renting out one of my rooms to a colleague for $400 a month over three months, as well as tutoring three hours a week.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [Met with my thesis supervisors, which was great.  They seem to be really interested in what I want to do and preparing me for life/job after Masters.]

Social

-Join two new clubs in the local area.  Kind Of [I skipped off quilting club over the last month to tutor.  It’s shutting down this month for the summer.  The writing group is struggling a bit to get consistent meeting attendance, fingers crossed.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [My query letter got answered!  They wanted, and I sent in, the first three chapters of my novel.  Got to say I’m a bit on cloud nine.]

-Become a respite foster parent. CHECK [Medical’s been completed and I started my training course, 2 classes down, 8 to go.]

-Take a big backpacking trip solo. CHECK [Saving is going as planned and I haven’t touched my vacation days yet.] 

-Finish my current crafting projects.  Kind Of [One month left to get my most important project done, it may be a tad bit tight.] 

I’ll give myself 87.5%.  A couple of goals have been lagging but the goals that I have made progress on have grown by leaps and bounds.  In June I want to focus on a couple of things.  1.GET MY EMBROIDERY DONE (and wrapped in time to be given as a gift). 2. Take a good long look at my travel plans.  3. Do some studying in preparation for starting my Masters (I’m kind of straddling two very different fields and I need to make sure I am ready for the more technical portion.) 

Goal Review End April

I would like to take this chance to apologize to any of my neighbors who saw me in my front yard last week dancing like a loon.  I’m not crazy, just happy . . . promise. 

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [Savings are happening as planned.  The return of value has arrived and was promptly invested. See how here.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [Made my double up for the month.  Also got $4,300 of scholarship money for my upcoming Master’s Degree which frees up some of the money I had previously put aside for my education.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [I have been officially accepted, hence the impromptu dance in my front yard last week.  I even have my supervisors all ready assigned.]

Social

-Join two new clubs in the local area.  CHECK [Quilting club is going strong and the writing group is meeting at my place every month to avoid paying for a venue.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [The whole manuscript is done (and I’m avoiding making huge changes except for grammar, and I’ve sent out a query letter.)  Now comes the waiting.] 

-Become a respite foster parent. CHECK [I’m meeting with my Social Worker tomorrow and have been loaded on the next course.  I do need to follow up on getting the medical side sorted.]

-Take a big backpacking trip solo. CHECK [Saving is going as planned and I haven’t touched my vacation days yet.] 

-Finish my current crafting projects.  CHECK [The important one is being worked on almost every night.] 

I’ve seen progress on each of my goals for a lovely 100%.  In May I want to focus on a couple of things.  1.Set an appointment with my family doctor to get my medical forms for my foster care application filled out. 2. Review my Mortgage Plan and continue to work towards saving the extra money I’ll need for my 10% payments.  3. Keep up the good progress on my embroidery.  

Have a question?  I'd love to hear it!