Bi-monthly budget recap
Looking back on the the previous paycheck I am happy to say I made my money sizzle. Utility expenses went down and Blow Money went up.
Sadly I am pretty sure the Utilities usually shoot up more soon. Calls to the TV/Internet company are pretty common. Seems like they don't even know what their services cost.
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Consistent for most of 2015 has been a huge amount of money as a percentage going toward housing. The fact is that our current housing isn't very expensive. We pay $1,200 in rent and both my wife and I split that from each of our incomes.
Hosing costs are about to change
The reason I dedicate between 45% and 55% of my income toward housing is to build up the down payment. Paying the rent in one check and paying an amount equal to the rent toward the Down Payment in the second check of the month.
As a result of aggressive saving since becoming debt free Mrs. MBG and I have saved over $14,000. While thats a mere 5% of the price for our home. It is enough to be eligible for a conventional fixed rate mortgage.
In the budget below you are looking at what may be the very last budget for Rent. The next budget will include a little more saving for the Down Payment. Then in budgets for September there will be a category for Mortgage.
How I will buy a house the wrong way
In the back of my mind I continue to hear the chirping of Dave Ramsey and his rule: A 20% down payment on a 15 year flat rate mortgage where the payment is no more that 25% of your income.
| What I'm doing is all wrong. But it feels so good! We are doing a 5% down payment on a 30 year fixed rate mortgage and our payment will be about 24% of our income. | |
The numbers work as they are. I have confidence that we are not going to be in over our heads. It kills me however, to think of paying on this mortgage for 30 years.
How I plan to accelerate payments
My older brother has always told me "not to compare myself to my friends". Mostly because my friends growing up were pretty reckless in every way. It's better to strive to be like people you admire.
My wife and I are pretty frugal. While we do have goals that will require big chunks of money. We are being deliberate by timing those expenses years apart. In week twenty four I mention a visual budget. We are planning for a honeymoon in Australia for October 2016. How is that for discipline? A Car and a PHD for my wife is also on the list in the next five years.
All of that to say that paying extra on the mortgage is going to be a top priority. I don't count my income before it arrives in my account. The pay scale for my wife and I has a defined runway leading to higher wages over the next seven years. That should allow us to find more money in the budget every year.
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Comments: For those of you that are homeowners did you plan and follow thru with added payments to principle? Are unexpected expenses keeping you from paying down the mortgage early? As I begin the journey into home ownership by September 2015 what is the best advice for me? Thank you.
