Comments on: Goal Update for March

By: Franci

Franci — Fri, 05 Mar 2010 20:07:32 +0000

It might be called something else in the States, but we have about 80% of our mortgage fixed and can not take money in or out for a fixed period, with a fixed interest rate. The other 20% is what all our money goes in and out of all the time (kind of like a cheque account – though we pay for everything with credit card and pay it off once a month so that we keep money in the floating account as long as possible to off-set the interest) and has a floating interest rate (changes if the bank decides to change it – great at the moment with the low interest rates around).

You have to be disciplined for this approach (not a problem for you, of course!) otherwise you are stuck with paying off your floating forever because, of course, you can always spend up to the loan limit, which is where a lot of people go wrong on this one. However, if you make sure to put all your money in there as you get it in and keep track of what’s in there with a spreadsheet or something, then you should be good.

Then, when you have reached a zero balance on the floating part of your mortgage, you get another chunk off the fixed part of your mortgage and turn it into a new floating part. (Hope this makes sense)

Having our mortgage structured like this has cut our mortgage lifetime from 30 years to 16 years. Pretty good in my opinion. You should talk to your bank if you think it could work for you!

By: Kristen

Kristen — Fri, 05 Mar 2010 11:44:33 +0000

What is a floating mortgage? Is that a mortgage that you can take money in and out of? We do have a mortgage, but ours is not like that…once you put the money in, you can’t take it back out again except through a home equity line of credit.

If we had such a thing, though, yes, it would definitely be the way to go because the interest on our mortgage is higher than the interest we earn in savings accounts. As things stand, the multiple accounts at ING are what works best for us.

By: Franci

Franci — Fri, 05 Mar 2010 06:04:24 +0000

Kristen, I find it strange that you have so many bank accounts! Do you still have a mortgage? If you kept all that money in a floating mortgage and kept tabs on all the money that you’re saving for in a spreadsheet, you’d gain so much more!

By: Frugal Liz

Frugal Liz — Fri, 05 Mar 2010 02:33:43 +0000

I had no idea that vans were so expensive! My parents used to have a Toyota Sienna, but I never asked them how much it cost them. I think they bought it new, anyway.

By: Kristen

Kristen — Thu, 04 Mar 2010 23:43:28 +0000

Oh, I’m so glad my blog has been helpful to you. And I hope that you have success in saving up for your next vehicle.

By: Kristen

Kristen — Thu, 04 Mar 2010 23:42:21 +0000

Yup, what Anne said. It’s mostly about avoiding interest payments, and I don’t think there is such a thing as a 0% interest rate on a used vehicle loan.

And you’re right…just gotta keep plugging along. It’ll all add up eventually.

By: Kristen

Kristen — Thu, 04 Mar 2010 23:41:07 +0000

Oh, I hate it when they have a great deal like that but it’s not my size! $2.98 is an AWESOME price.

By: Kristen

Kristen — Thu, 04 Mar 2010 23:40:14 +0000

Well, for one thing, I am getting very annoyed with the limited number of focus points. When I’m working with a very wide aperture, this really bugs me! lol I also am lusting after the better image quality a higher-grade body would get me.

And, my current camera is not built to withstand the kind of use it’s getting. I know the shutter is going to give out on me at some point (I’m surprised it hasn’t already, because I think I’ve surpassed the number of shots it’s supposed to be built for).

I do use my camera ALL the time, and I get paid to take pictures, so I don’t feel like it’s a completely frivolous purchase.

By: Laurie

Laurie — Thu, 04 Mar 2010 23:23:26 +0000

Your certainly right Anne. I suppose gone are the days of 0% interest. I really wasn’t thinking of the overall picture, but rather that the given amount sounds like a “payment” to me..

By: AnneT

AnneT — Thu, 04 Mar 2010 23:01:09 +0000

When you buy brand new and make payments, the price is higher and you pay INTEREST. If a bank or finance company fronts you the money for your vehicle, it’s not from the goodness of their hearts; it’s so they can make money charging you INTEREST. The longer the loan term, the more interest you pay. When you buy a house, for the first few years you are paying more in interst every month than you do in principal (the actual purchase price of the house). We had a 25 year mortgage that we paid off in 10 years – we saved at least the cost of the house in the interest we did not pay as a result.