Hey everybody,
For many years I have tried to be good with money, and I think this is evidenced by the fact that we have 2 reasonably good cars with no car loans, and our Home Loan is now under $20,000. (First house was paid off in 4 years).
However, I’m starting to wonder lately if I’m just being too stingey about money. There are things that need to be done around the house.. (eg, no back garden, no entertainment unit, no airconditioning, etc) and I’m kind of getting sick of waiting for the house to be “finished” if you get my drift.
Now my beloved hubby wants to get Foxtel, and where we live that’s not cheap, because it has to be a satellite. But he loves movies and TV in general.
Do you think it’s OK maybe to not put so much into your Home Loan when it’s nearly paid off anyway? There are certainly other things we could do with! If we pay it off too early, we’ll cop a $600 fee anyway!
Lozza
Lozza, I think you need to reward yourself at times. There’s no point making yourself miserable now, so that in future you’ll maybe have some (hopefully lots!) spare cash to spend.
I think it’s a matter of balance.
Cheers
MelI agree with melbear, it’s worthwhile to smell the roses along the way with a bit of a reward here and there…
cheers
rWhy don’t you do both? OK you may not be able to do this but this is just a thought…
Do you have an investment property?
If you had a postive cashflow property that was mortgaged with an Interest only loan, the surplus money that you have could be put into an offset account for you to spend on your personal things whenever you wanted to, and you would still get the maximum tax deduction from the interest on your IO loan.
Also do you know the trick about the 55 day inteterest free credit cards and having it lincked to a LOC account?
You can save a lot of money there too… but as always with money you have to keep track of it and spend it wisely.
Pin
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ALL welcome!Hi Lozza,
Take the splurge, you deserve it! My airconditioning is being installed on Wednesday, and I can’t wait [
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I did feel a little guilty at first, but I don’t want to end up like the old lady next door to me when I was a kid.
She died leaving a lot of money to her nephews and nieces, and she didn’t even have indoor plumbing. She had a little outhouse in her back yard…we could see her tottering down to the back. This wasn’t a country prop either, we’re talking inner Melb. suburb.
As for the rest of the house, you really don’t want to know []
Anyway, the point is, you need to enjoy your life, it’s not guaranteed.Sue [
]“Be careful not to step on the flowers when you’re reaching for the stars”
Also do you know the trick about the 55 day inteterest free credit cards and having it lincked to a LOC account?What trick is that?
Also do you know the trick about the 55 day inteterest free credit cards and having it lincked to a LOC account?What trick is that?
I think he is talking about having your mortgage account set up as a line of credit account. which means that you deposit all of your income into this account and then use a credit card (hopefully with 55 days interest free) to pay for all(or most )of your expenses and then at the due date use money from you LOC loan to pay off the credit card in full.. No interest on your credit card and maximum benefit from having all your money paying of your laon until the cc bill falls due.
Other options to this is A home loan saver account where your money is deposited into a separate account and the total of this account is taken into account when calculating interet on your home loan ie
home loan $100000
home loan interest saver $15000
interest on home loan is calculated on $85000 only.Most financial institutions offer some sort of account along this line which to me is preferrable than a LOC loan because if you blow your budget you will actually be increasing your loan.
We have been operating a Homeloan interest savings account with ANZ for about 10 yrs and have saved lots of money of our home loan with this set up at one stage we were not paying any interest on home loan as we had money parked in HLIS waiting to be invesfted elsewhere. With internet banking you can regulate all your payments and check on your balances.Then again I know someone with a LOC loan and she has made great inroads into her loan
LOC usually on fees for “redrawing” whereas a HLIS has fees for redraws (makes you think twice about pulling money out of your loan
?LOC loans could also have higher interest rates
We find HLIS good for depositing all our rent into and the bank withdraws 4 loans from this account. And all the rent goes to paying off our home loan until it is needed for the other loans.
The above is what I understand about these type of accounts.
I have paid no banking account fees for 10 years using this set up.
Debra [
]Hi Debra,
Thanks for expalin that for me. Actually it is sometimes hard to keep track of posts I have posted to…
Anyway if you want to see how much you actually save using this method check this link:
http://members.freeib.com/index.php?mforum=generalinvesting&act=ST&f=3&t=13&st=0#entry24Cheers,
Pin
*********
http://members.freeib.com/?mforum=generalinvesting
General Investing Forum for the Best FREE general investment information.
ALL welcome!Lozza,
I agree with everyone, you need to treat yourself occasionally.
The main problem you might face happened to my mother.
She was about 25k from paying off her home loan and decided to go overseas for four weeks.
She paid off her overseas trip then went again about every six months.
Five years later and she’s almost paid off her home loan again…. mum’s is a drastic case but just splurge with a budget.have fun,
itsamoorey[|)]
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