Pay $1000 a month extra toward the principle of the mortgage and save about $175k in interest during the loan.
Good move! Paying off the mortgage is always going to net you good returns. We're lucky in tht our bank offers a "Total Money" system where they offset any money in your everytday/savings account against the floating portion of the mortgage. So say we have $1000 in our cheque account, $11000 in savings and $50k on the floating portion off the mortgage we're only paying interest on $38k of the mortgage. So our saving is essentially paying off the principle of the mortgage, at least until we spend it! [hypothetical figgures BTW...]
We're also paying our mortgage weekly, despite being paid fortnightly and monthly, and I was gobsmacked by the amount of money this saves over the 2 year term! (the wife and the bank worked it out, don't ask me how, she's the accountant, I'm the dumb train driver...
)
Do you guys have a separate savings account? We don't. Never saw the need for it. I don't even know when our paydays are
Since we don't live check-to-check, I never saw the need to put a certain amount in a separate place. It won't get spent anyways.
I'm fortunate enough to be in a similar situation; two good incomes, a bit of cash in the bank still from selling our previous house, no kids, wife who deals with the bills etc! All our accounts are joint between my wife and I, we do have seperate savings tho. Her pay goes into one account, out of which we pay the mortgage and as much of the day to day expenses as possible. My pay goes into a different account which we only touch if necessary, usually for less frequent bills like car registration (6 months), rates (quarterly) etc, or if we have an expensive month with unusual expenses, car repairs, weekend away, *cough*fish stuff!, etc. Anything that is left in there at the end of the fortnight before my next pay gets put into a savings account for that rainy day stuff.
The best advice I can offer for saving isn't to budget (works for some people tho) but to be diciplined. Every time you go to spend money ask is it really necessary and is there a cheaper option. I found our budgets always went out the window as life isn't fixed and consistent like the budget was, some weeks we did better, some worse. Don't eat out, grow your own food if possible, stay away from prepackaged foods, drive as little as possible.
My biggest saving is from not getting sucked in to fashion! As I write this I'm wearing a 12 year old pair of dickies pants (sometimes spending more for quality works out cheaper!), a free tshirt from a company I used to work for, an old hoody I've had for 9-10 years and a pair of $9 slippers. I'm lucky work supplies me with a uniform, but I still spend stuff all on clothing. I have two pairs of tidy jeans that have lasted years, a couple of shirts/tshirts and a couple of jerseys, along one one more 'formal' set of pants/shirt/tie/shoes which I have worn to countless weddings/funerals/job interviews etc (wife insisted I rent a suit for our wedding tho
). It does my head in that people spend thousands on shoes and handbags then say I'm mad for spending $400 on a fish......
