Get new job ot what?

Cyberscum

I'm stuck in the situation where I have been for a few years now and its ridiculously frustrating. I have paid off all my debt, own a few cars, contribute to a 401k and have an emergency fund.

My goal has been to pay off my house for the last 6 years but I have not gotten around to it. I get busy with this or that and have no money at the end of the month because of stupid impulse buying. I am thinking at this point that maybe I need to find a new job that makes more, but if I budget correctly I have about $1500 left over after all bills and about $250 for play money.

The crazy thing is that I created a budget and all. I know how much is coming in and how much I should be spending, but I lose track and spend it. I am beginning to think I am doing it subconsciously lol.

I really need the money not to be there. Like taken out of my account and immediately put on the house or something of that nature for me to accomplish this.

Any ideas on how I can follow through with my goal?

Should I just get a job that pays more so I have the extra cash?

I have about 1500 extra, but it always seems to be spent on bullshit.

broli720

Automatic transfers are your friend. Maybe open up a brokerage account and take a crack at that. Setup an IRA and automatic transfer into a brokerage account and leave about $500 in flex spending at the end. This should solve your issues. Getting a new job won't help because the more you make the more your tastes will change.

OctalDump

Yeah, I'll have to second what broli720 said. You need to lock the money away before you can spend it. If it isn't sitting in your bank account or in your wallet, you will be far less likely to spend it. I think until you sort out that problem, a new job with more money will just mean more problems. You wouldn't be the first person who finds their lifestyle grows to eat up the extra earnings.

Trucido

I set up my bank account to automatically transfer 50 dollars each paycheck to a reserve/growth account that I use for emergency/goals (I want to buy a motorcycle + gear with cash At the moment) I dont save nearly as much as you do but I feel that helps me not spend the money.

I am not an economic expert or anything but I feel like transferring the money outside of your main account makes you see "This is my goal, and this is where I am, if I touch this I am losing out on my goal."

bgold87

I'll echo what everyone else is saying. I setup a capital one 360 online savings account and have it do an automatic transfer from my bank account every pay period. The beauty of it is if I want the money I have to wait for it to transfer back to my main account which takes 2-4 days and that has cut down on my impulse buying.

the_Grinch

I agree with the automatic transfers. On the flip side, start taking out cash and leaving the debit/credit cards at home. I have the same issue being quick to reach for my card and I find as humans we have a very hard time keeping track of things we can't see. On another note, well done paying off your debt and having an emergency fund!

broli720

Lose out on points and free money if you don't use the credit card though

I exclusively use my credit card and religiously pay it off every month.

NetworkNewb

I'm with you on this! Amazon is a killer for me, just makes buying things too easy! Besides my house, I'm debt free. My wife and I met with a financial adviser last year and I'm supposed to have ALOT more money than I do at the end of each month. I'm getting better, but I need to get one of those accounts I just can't see. Besides buying random IT books/equipment (alot I haven't touched yet), I spoil the heck out of my 1 year old daughter. She needs those name brand clothes, especially at that age right?

Cyberscum

Thanks for the ideas guys/girls...

I refuse to get a credit card because they stand for everything that is evil in this world so I am left with creating automatic withdrawals onto the mortgage. I think that's a great idea, but here is the hard part...

...I am on the reverse side of the interest amortization schedule for my mortgage so now there is a question of which technique is best and more efficient.

1. If I refinance to a 15 year I get a lower interest rate, (which means more to principal) but restart the amortized interest of the loan.

2. If I set up auto payments to the current loan I would be paying the higher interest (4.5), but have already taken a big chunk out of the ballooned interest and would set up auto payments to pay AFTER the reoccurring payment to ALL principle.

There are no calculators to calculate amortization with extra payments on a current mortgage...so which is best?

I'm about 9 years in the current mortgage

NetworkNewb

I'm going with number 2, just because you never know what could happen in the future and don't want the higher mortgage just incase something happens and you need that extra money. Thinking that is what I may start doing with my extra money as well... How nice would it be to get a house completely paid off?!

aftereffector

I'm not a CFP or anything like it, but I'd go with #2. This gives you the ability to back down to a regular 30-year payment amount if you get stretched thin, whereas the 15-year refi means that you are forced to maintain that payment rate. It's not a big deal usually, but it might help.

Also, make sure you are taking full advantage of pretax benefits! Maxing out your 401k, an IRA for you and maybe your spouse if applicable, and an HSA if you can get one will take a big chunk of money out of your taxable burden and will also have the side benefit of soaking up some of that "extra" money you might have lying around. I have increased my savings rates every time I get a raise, so to me it feels like I make the same or even less even though I've gone up in gross income significantly since I first started in IT - but all that money is going somewhere safe and I won't be tempted to use it on a new car or something like that.

joemc3

What if you pay your mortgage twice a month and have it set up that way? [FONT=&quot] While many people think of a month as being four weeks, and half a month being two weeks, that isn't quite true. Because there are 52 weeks in a year, there are 26 biweekly periods. So if you make 26 half payments, that is the same as making 13 regular monthly payments, or 1 extra payment per year. As it turns out, that one extra payment per year can add up big time.[/FONT][FONT=&quot]Once more I ran the numbers on my 30-year $160,000 mortgage and found that making an extra payment just once per year meant I could pay my mortgage off almost four years faster, in a little over 26 years. This would also reduce my total interest payments over the life of my mortgage by almost $14,000. That isn't bad. I did grab this from a site, but I closed the link.

In short, you get to save money and have less impulse buying by doing two equal payments or more per payment. [/FONT]

DatabaseHead

broli720 wrote: »

Lose out on points and free money if you don't use the credit card though

I exclusively use my credit card and religiously pay it off every month.

Idiotic not to, at least here in the states. I've gain such a strong credit score and one of the main reasons I pay all my bills with credit cards, and always let 5% of my total balance roll over. This keep a line of credit open, I actually have 4 credit cards all open, with a balance less than 5% of the max credit line.

Your credit score just soars!

@OP I agree with setting up auto pays from credit cards and then back pay the credit cards (not completely off) and let automation be your friend. That might help cut down on the impulse spending too.

The most important thing is to take a genuine interest in your finances and learn as much as you can. The more know you know the more you grow.

Cyberscum

So this bring up another issue.

To pay off the mortgage or invest...

Considering recent and not so recent returns investing is a wash and looks to be a wash for the near future.

U have to take into consideration the interest you gain from investments and the interest you pay on the mortgage. Returns on stock investments has been weak and I have limited portfolio movement between stock options. Paying off the mortgage relieves me of the continued interest for 30 years and now frees up the property to be used as leverage on a wider variety of other investments.

Although you have to take into consideration contribution matching and the bullshit tax exemption on paid interest and the compounding interest you will lose, I still feel that paying off your mortgage to utilize it as an investment vehicle is a better idea because you now have a much better investment spectrum to choose from. I can think of over 10 investments that are better than stocks, but you have to have money to make money. Or a paid off house

Cyberscum

DatabaseHead wrote: »

Idiotic not to, at least here in the states. I've gain such a strong credit score and one of the main reasons I pay all my bills with credit cards, and always let 5% of my total balance roll over. This keep a line of credit open, I actually have 4 credit cards all open, with a balance less than 5% of the max credit line.

Your credit score just soars!

@OP I agree with setting up auto pays from credit cards and then back pay the credit cards (not completely off) and let automation be your friend. That might help cut down on the impulse spending too.

The most important thing is to take a genuine interest in your finances and learn as much as you can. The more know you know the more you grow.

I look at a credit score as a bad thing. It is a score of your interaction with debt or debt vehicles.

The opposite of what I am trying to accomplish.

volfkhat

Cyberscum wrote: »

I'm about 9 years in the current mortgage

9 years out of how many?
I assume... 30?

Lesson of the Day (for everyone): 30 years Mortgages are for SUCKERS.
You end up paying 2.5 to 3 times the price of the home in the end.

30 years Mortgages should probably be BANNED. lol
(a bit extreme.... but still true, imo)


As for your question about Scenario #1 or #2....
i think you are OVER-THINKING it.

Just pull out your calculator (and an excel worksheet) and plug in the Numbers.

Option 1-
Refi into a 15 year loan.
Google for Mortgage Calculator- Plug in the numbers (Interest rate, Principle, etc).
Let it Figure out what your NEW monthly Payment will be.
(for example... say it's $1,200)

Now, compare that NUMBER to Option 2:
Take your Current House Note,
ADD in the $$ amount you are thinking about paying in ADDITION to.
Total it up, and NOW you have This number to COMPARE against Option1.
(for example.. say it's $1,000)

So there you have it:
Option #1) $1,200 for 15 years
or
Option #2) $1,000... but for HOW MANY years??

Well, no sweat, its actually easy to estimate:

Look at your mortgage statement. It should state in PLAIN ENGLISH how much of your Current payment is going to Principle vs Interest.
Take note of those two numbers. (Let's pretend... $325 is going to principle)

Next, pickup the phone and call your mortgage servicer. Have them run an amorization table right over the phone.
Ask them what your CURRENT Principle/Interest amount will be in 5 years from now; then 10 years, and then 15 years.

Finally, open up EXCEL, and start populating in the data/Logic.
For example:
Row 1 (July 2016) = $100,000
Row 2 (Aug 2016) = [Row 1] - $325
Row 3 (Sep 2016) = [Row 2] - $325
Row 4 (Oct 2016) = [Row 3] - $325

~where, $100,000 is your current balance. and $325 is the approx amount going towards principle each month.

Use Excel's autofill functionality to fill in 200 rows or so.
Then, just figure out the month your balnce hits zero.

And there you have it.

You're welcome :]

DatabaseHead

Cyberscum wrote: »

I look at a credit score as a bad thing

How so?

Lower Interest Rates on Loans
More leverage in Negotiations
Ridiculously low insurance rates

My last vehicle purchased brand new has a 1.9% interest rate, for 6 years. Anything below 2% is free money

But like you mentioned in your original post, if you lack discipline you may want to stick with a simple cash plan......

Ktblount

Dave Ramsey if I had to guess.

Cyberscum

DatabaseHead wrote: »

How so?

Lower Interest Rates on Loans
More leverage in Negotiations
Ridiculously low insurance rates

My last vehicle purchased brand new has a 1.9% interest rate, for 6 years. Anything below 2% is free money

But like you mentioned in your original post, if you lack discipline you may want to stick with a simple cash plan......

Because interacting with debt is what I am trying to avoid.

I already have cars and everything I need.

If I need anything else I pay cash.

I made the mistake of a mortgage and am trying to remedy that as well.

Cyberscum

volfkhat wrote: »

9 years out of how many?
I assume... 30?

Lesson of the Day (for everyone): 30 years Mortgages are for SUCKERS.
You end up paying 2.5 to 3 times the price of the home in the end.

30 years Mortgages should probably be BANNED. lol
(a bit extreme.... but still true, imo)


As for your question about Scenario #1 or #2....
i think you are OVER-THINKING it.

Just pull out your calculator (and an excel worksheet) and plug in the Numbers.

Option 1-
Refi into a 15 year loan.
Google for Mortgage Calculator- Plug in the numbers (Interest rate, Principle, etc).
Let it Figure out what your NEW monthly Payment will be.
(for example... say it's $1,200)

Now, compare that NUMBER to Option 2:
Take your Current House Note,
ADD in the $$ amount you are thinking about paying in ADDITION to.
Total it up, and NOW you have This number to COMPARE against Option1.
(for example.. say it's $1,000)

So there you have it:
Option #1) $1,200 for 15 years
or
Option #2) $1,000... but for HOW MANY years??

Well, no sweat, its actually easy to estimate:

Look at your mortgage statement. It should state in PLAIN ENGLISH how much of your Current payment is going to Principle vs Interest.
Take note of those two numbers. (Let's pretend... $325 is going to principle)

Next, pickup the phone and call your mortgage servicer. Have them run an amorization table right over the phone.
Ask them what your CURRENT Principle/Interest amount will be in 5 years from now; then 10 years, and then 15 years.

Finally, open up EXCEL, and start populating in the data/Logic.
For example:
Row 1 (July 2016) = $100,000
Row 2 (Aug 2016) = [Row 1] - $325
Row 3 (Sep 2016) = [Row 2] - $325
Row 4 (Oct 2016) = [Row 3] - $325

~where, $100,000 is your current balance. and $325 is the approx amount going towards principle each month.

Use Excel's autofill functionality to fill in 200 rows or so.
Then, just figure out the month your balnce hits zero.

And there you have it.

Your welcome :]

Nice. I have yet to find a tool that amortized a current mortgage with added princ payments from today or a future date.

Thx

volfkhat

Cyberscum wrote: »

Nice. I have yet to find a tool that amortized a current mortgage with added princ payments from today or a future date.

Thx

Yep! i encountered this same exact issue 10 years ago.
Excel will give you a rough estimate; But you can make it more accurate by asking your Mortgage Servicer for Principle/Interest ratios for specific 'future' dates.

If you follow through, let us know how the numbers compare :]

aftereffector

Cyberscum wrote: »

Nice. I have yet to find a tool that amortized a current mortgage with added princ payments from today or a future date.

Thx

This one isn't bad:

Amortization Schedule Calculator - Bankrate.com

Plug in your mortgage amount, term, interest rate, start date, and then click "show amortization schedule" to see a chart of interest, principal, total interest, balance, and so on. You'll also see the payoff date, and you will get the option to add extra payments (monthly, annually, or one-time) to see how that would affect the balance.

Cyberscum

@ joemc: yes, but you are losing out because you could be making a regular payment and one to principle (no interest) instead of two payments toward interest a month.

@broli: I like the idea of auto payments, I'll use that for the house. Thx

@Octal: yeah I was religious about paying off all debt, but when I got to the mortgage I stopped because its such a huge task. I'll treat it like I did the CISSP....small chunks here and there.

@Netnewb: thanks for the input. Are u gonna set up auto payments?

@Grinch: thx, yeah I make all transactions cash from this point on.

@database: sorry didn't mean to come off rude if I did. I believe that in order to live a very fruitful life you need to have the freedom to take opportunities and make decisions without being tied down. My mortgage ties me down and I hate that feeling. More of a personal preference I guess.

@ktblount: huh? Who is that

@volfkhat: thx a ton for the info! Do u still carry a mortgage? I have some family members that paid off their mortgages and man are they all stress free lol. I hope to join them soon

volfkhat

Cyberscum wrote: »

@volfkhat: thx a ton for the info! Do u still carry a mortgage?

Nope.
been free for 5 years.

it's great. I've done More TRAVEL now than ever before.

(and im making LESS money, lol.)

It also gave me the freedom to do other things; like take a paycut to pursue other career goals.

Oh, and i started learning Spanish (seriously)!

So... yeah,
30-Year Mortgages should probably be Outlawed.

Cyberscum

aftereffector wrote: »

This one isn't bad:

Amortization Schedule Calculator - Bankrate.com

Plug in your mortgage amount, term, interest rate, start date, and then click "show amortization schedule" to see a chart of interest, principal, total interest, balance, and so on. You'll also see the payoff date, and you will get the option to add extra payments (monthly, annually, or one-time) to see how that would affect the balance.

Can't take a current mortgage (done in past) and add principal payments to it on that calculator.

Cyberscum

volfkhat wrote: »

Nope.
been free for 5 years.

it's great. I've done More TRAVEL now than ever before.

(and im making LESS money, lol.)

It also gave me the freedom to do other things; like take a paycut to pursue other career goals.

Oh, and i started learning Spanish (seriously)!

So... yeah,
30-Year Mortgages should probably be Outlawed.

I agree. Its amazing how many people think that a mortgage is a passage of life...more like a passage to slavery lol

Congratz BTW, mark my words...I will join you real soon.

volfkhat

Cyberscum wrote: »

Can't take a current mortgage (done in past) and add principal payments to it on that calculator.

hmmm,
can it allow you to shorten the Term instead?
for example:
Plug in your Current Balance, Interest rate, and Extra payments,
but also set the term for 21 years (252 months) instead of 30?

anhtran35

Go overseas on a contract in a high threat environment. You will work on a base; free housing and food. Pay off your mortgage making 6 figures while renting out your place. It's not easy as it sound since you will be dealing with all sorts of work issues; however, many contractors do this to pay off debts and live rent/food free while networking to relocate to europe or asia on other military contracts.

dhay13

agreed with the brokerage account. i have a few and have been managing my own trades for a few years (fairly aggressively) but you can just buy into mutual funds or something more conservative and leave it. very easy to do.