Blog Posts
Last year, I had set a goal to do a monthly update on spending each month. This year, I have decided to do a spending rate article every quarter. This way I can devote more time on other articles. As you may recall, our 2016 goal is a 35% savings rate, mainly because we did not hit our goal last year and the fact that we now have a mortgage payment.
We took out a mortgage in August of 2015 and our first payment was due on October 1, 2015. Although, we have payed all of our mortgage payments around the 15th of the previous month, because that was when we would put money in our savings accounts prior to purchasing the house. This means in 2015, we payed 4 minimum mortgage payments and we also payed 4 extra principal payments.
How much you spend on recurring basis will continue to affect how fast you can invest and the more you invest, then the faster you will reach financial independence. Our 2015 goal was a 50% savings rate and we were on track to hit that goal until we purchased a house. Therefore, we did not meet our goal, but we are happy at where our finances are heading with a plan of paying off the mortgage early and investing a minimum in 15% in retirement accounts each year.
Earlier this summer, I was feeling frustrated that our savings account wasn’t growing as fast as I had hoped. Don’t get me wrong, it was growing a couple thousand dollars a month, but I wasn’t content in that. I wanted to be financially free today. This mindset can be very dangerous, because it can lead to people going out and making risky decisions.
So, last month I was celebrating the fact that we are debt free! We are no longer debt free. We made the decision to purchase a house that we fell in love with and we are very happy with our purchase.
