#1GoodMoneyThing Update and Attack the Mortgage!
October 26, 2015
Popular frugal finance says: Want early retirement? Live on less.
But I don’t want to! Been there, done that, still wearing the crappy free t-shirts because holes aren’t a good reason to throw them out. Obviously we CAN live on less, and boy have I, but given the choice, and I’m giving myself the choice, I choose to spend mindfully and selectively so we can spend on good quality or pay for expensive stuff when we have to. Besides, while I know frugality-focused Early Retirement folks enjoy their wage-working-free days, my desire to retire early has a lot more to do with freeing up time and energy to do things I care about like animal rescue, helping foster kids, addressing poverty, etc. That takes money.
Why not do both?
In an alternate universe, I could, so I would! But here in this somewhat crappy version, I simply can’t and I will not sacrifice health for wealth again when it’s not for survival.
Nope. I’m a forever fan of the multi-faceted approach.
Reducing our spendable cash flow: we were saving 25% of our salaries, net. That’s untouchable unless it’s paying down debt or keeping us afloat during job loss. We’re saving another 15% to account for LB’s expenses. Until / unless it’s spent on LB, it’s also untouchable outside of catastrophe or debt paydown.
The one-income life: replacing one of our incomes and benefits, or learning to live without one of our incomes for a while, isn’t going to happen through a side gig right away, but it’s a goal. I’m starting the income replacement with our investments.
Cutting our expenses ruthlessly: I negotiate our internet bill regularly, we don’t have a phone bill, we use the heck out of our cell phones and have the lowest plans appropriate to our usage. I’ve tried to refinance the mortgage several times, to no avail, but no fear! There are other ways to kill that mortgage.
With thanks to Nicole and Maggie for pointing me in the direction of a useful amortization spreadsheet, I’ve worked the numbers:
I love the potential for savings here. It’s time for a good hard look to see how much we could comfortably throw from savings in a big ole prepayment when each dollar is worth two in this scenario! There’s a serious temptation to throw all the cash at it but I’ll refrain from overzealous stupidity, I won’t deplete our savings cushion even if it feels like our jobs are relatively secure for now.
Update: Had a chat with PiC, we’ve decided that we can pull together cash from enough sources to make a big prepayment this month so we’re going all in. It’ll be worth almost twice the value in interest we don’t pay over the life of the loan so I’m over the moon about that. And you’d better believe I’m looking at ways to relieve my cash spending so I can throw more cash at it next year.