Sometimes I get discouraged because it doesn't seem like I am reaching my financial goals fast enough. After all, my 4-5 year plan to pay off the mortgage is going to take at least 4-5 years. Unless I win the lottery or get a secong job, there isn't much I can do that I am not already doing. I need to remind myself that I am on the right track so I am making a list of the top 10 things that I do that are helping me reach my goal.
1) I make a yearly budget and live below my means. I take my salary minus taxes and insurance, subtract 10% for donations, $800 for my house payment, $700 for monthly expenses and whatever is leftover is the amount I can use for saving and investing. Currently I am using $400 for extra mortgage payments which leaves $142 to be used at my discretion.
2) I have a monthly budget and I stick with it. I write down every dollar that I spend and add it up as I go through the month. That way I know if I am running out of money or if I have a little left over I can buy something that I have been waiting to buy.
3) I moved out of my house, live in an RV and rent out my house as a vacation rental. Ok, so not everyone can move out of their house and rent it out but I had the opportunity so I decided to give it a try. Money earned: at least $4,000/yr and maybe more if I am lucky.
4) I don't have cable or satalite TV. I have an antenna and I get 6 channels. With the internet and work and an occasional book, I haven't been bored yet. Savings: $40/m
5) I collect rainwater and use it for everything except drinking and cooking in my RV. It's a little extreme, I know, but I like the look on people's faces when I tell them that I get my water from the sky. They don't believe me, especially since I live in the desert. Savings $40/m if it was delivered.
6) I buy my clothes at the thrift store, and discount stores like Ross when I need something more specific. When I need a change of scenery in my closet the thrift store lets me aquire a few new pieces without buyer's remorse. If I don't like something after I wear it once, it gets re-donated. Plus, I allow myself to use money from my donation catagory when I go to the thrift store. It's a charitable organization and I donate clothes too so I consider the clothes an equal swap and the money a donation. Does that make sense?
7) I contribute to my 401k to get the company match. I am eyeing an early retirement so tying up a lot of money until I am 59 1/2 doesn't really interest me (I already have a little nest egg locked away in my 401k and it seems adequate to me) but I would be a fool not to at least get the company match. It is painless and hopefully will add a little more security in my old age.
8) I am easily amused. My hobbies are not very expensive. I enjoy gardening and arts and crafts. Those things can get out of hand if I started buying supplies and tools but they can also be done very inexpensively. I save seeds and plant things that are easy to grow. I have collected so many art supplies over the years that I don't think I will run out soon. It's only when I want to try the latest and greatest craft like Precious Metal Clay or glass bead making that I have to remember my bigger goal. I know that if I spend less now I will be able to build the house that I want with my art studio and I will have plenty of time to pursue my passions without a 9-5 job because I will be financially independent. At least that's the idea, assuming I don't die first.
9) I make saving money my hobby. I read frugal blogs and websites, read books from the library about money and investing, make a game of frugal habits like finding bargains or fixing and re-using things.
10) I blog about my finances and goals. Blogging keeps me motivated and accountable for the goals that I make. Blogging can be free although I have spent a little bit of money on it. Plus the web site design skills that I am slowly learning might help me later on in life when I have my own art business and design my own web site!
Yeah for motivation! I know it is hard. Here I am in my 20's trying to make sure we shed our student loans fast and start saving for all those things- like BABIES!!!
We live in a mobile home similar to yours from what I can tell. Why do you have to have water delivered? Can you not drill a well out there? (Our well water tastes horrible and we filter it like crazy, but it is *free*)
I'm impressed once again by your willpower. I don't think it would ever even occur to me to move out of my home and into an RV!
That said, I'm curious about your views on retirement savings, because they seem much different from mine. If I ever get to the point where I can afford a house, I probably wont prepay my mortgage, so that I can free up extra money for investments. What made you decide to go the other route?
Hello A! Good luck with those babies. I always thought I would have at least a half of dozen by now. Life doesn't always turn out that way I am learning. My sister has 7 so I go visit when I need some excitement!
Last Fall when I had $25,000 in the bank, I had decided to dig a well. The water is very deep here, like 1500 ft I think. I got 3 estimates and they were all around $30,000 not including electricity to the well or plumbing to the house or a storage tank. Even though the value of my property would increase if it had water, I decided that I didn't need it yet and I would wait until I built a house on this property and wrap the well up in a construction loan.
So maybe I'll have water in 4 or 5 years!
Hi Shuchong! Thanks for dropping by. The reason I decided to pay off my mortgage instead of investing is that my time-frame is so short. I want the mortgage gone in 4-5 years and I don't trust investments to grow enough in that time. I was too afraid they might go down. If I had a longer goal like 10 years then investing would be better. Plus, I liked the motivation I get from watching my mortgage decrease. When I had money in savings I was worried about falling interest rates but now I don't care about that because I am getting 5.8% (more or less) with my mortgage. Also, I plan on selling my house as soon as houses start selling again which means I can invest the money that I get out of it although I want to use some to build another house where my RV is now. My biggest goal is to get rid of the monthly mortgage payments so that I have the freedom to quit my job!!! Not that I will, just that I could.
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