To follow up on James’ post about paying off our second mortgage, I wanted to share my thoughts on what we’ve been doing that works.
Since this has been a seven month goal, here are a few links to track our progress if you are interested. These posts include: getting annoyed with WaMu, setting our goal, our initial plan of pay-off, details on our plan, and how we used credit card arbitrage at 0% to speed up our progress.
We did it! Right on schedule, we were able to pay off our $20,000 second mortgage in seven months! Yeah!
The key actions that we took in this process were to have a vision of getting rid of our most expensive debt, set a specific and measurable goal, and plug away at it consistently.
Achieving this goal within the time frame given was also a great accomplishment in terms of being able to ramp up our savings efforts.
Our first couple of years together, while we were making two salaries (though combined they weren’t as great as our one ex-pat salary plus study stipend status), we were about to save approximately $20k per year in addition to regular savings towards retirement.
Now we are making only slightly more than we were back then, but able to save at twice the speed. What do we attribute to this success to?
Dedication. This is key. This was certainly present in our early days together in saving for our place and our wedding, but it remains a critical part of achieving our goals. Without the focus and emotional dedication it is a great deal harder to achieve our goals.
Practice. I think the biggest factor in our increased rate of savings is having gone through the practice time and time again. Once you’ve been able to successfully reach a goal, you see what is possible and also want to challenge yourself to do better.
Limited Spending. You can’t save money if you are spending it. Overall we’ve also done a better job over time with keeping a cap on spending. Just spending less on crap will do a great deal. Having a small place with minimal household expenses is one area that helps. Miel being in
Looking forward, we are taking steps to move forward towards the goals we’ve identified for the rest of 2008. Next on the list is an emergency fund of $5k. Our estimate is that we should have this easily taken care of by the end of the summer. We will also add increase our automatic payments to our IRAs.
We’ll keep you posted on our continued progress.
Best wishes,
Miel
