Here at Palm State Mortgage we often are asked about various money matters other than buying a mortgages. strategies that can help our mortgage shoppers stay on target with their budget and their mortgage payments. In this article, we bring you a three interesting “fixes” for making those mortgage payments easier on your budget.
Money: Too Much Month at the End of It?
We like to tell our clients that some seemingly small money-spending problems are often more motivated by your habits than by your sense of value.
Back at the beginning of the year, Forbes.com blogged about this exact type of spending, behavior, literally an erroneous mind-set.
Now, we know when you commit to a mortgage, you do not want to end up with too much month at the end of the money. However, you also don’t want to miss a mortgage payment. Forbes.com gave their readers a sort of a formula to figure out a how to begin correcting this undeniably bad habit. Customized with a few of our Palm State Mortgage Company thoughts, we’re passing that formula on to you. See the steps below:
Money Magic: Money Hack #1–The Secret Formula for Discretionary Funds
We are not talking about regular, monthly expenses in this formula. We are talking about your discretionary funds, the money left after you have paid the “must-pay” bills and expenses.
From this formula, you can prove your discretionary spending is “more habit than value,” if you follow these steps. Remember, you can break a habit.
Step 1: Make a List of Your Expenditures! List of all of your non-fixed expenses. You might include:
Cable or Satellite TV,
Eating out at Restaurants
Magazine and Club Subscriptions or Memberships
Step 2. Find the Money–And Your Priorities!
Keep thinking until your own list is perfected with every item you spend on outside of the basics of life. The next step is to mark a “spending priority” next to each item on the list. Mark each item with a score of one to five. A score of 5 is your lowest priority, and 1 is the highest priority.
Step 3. Heart of the Hack: Is This Item “Money Well Spent, or Just a Habit?
Now, draw an elimination line through every item you marked with a “5,” or lowest priority. That’s right, since these are
the lowest priority expenditures, you will resolve to give them up—at least for a while.
Step 4. Add up the total.
You have now figured out how much money you will save save. Now here’s the best part; put that money toward your mortgage payment each month.
This change in spending habits for your discretionary dollars won’t be painless. But take heart, little changes can add up quickly. You will be changing more than the dollars and sense of individual months. You’ll be changing behavior and general attitudes toward your discretionary spending.
Money Can Speed Up Mortgage Payments On An Accelerator!
A Mortgage Accelerator might be a product you do not know much about but they are a financial product that has been popular with Australia and the U.K. for many years.
Put briefly this financial product is a special type of mortgage loan program which functions like a combination of a home equity loan and a checking account. Here’s how it works:
A. If you join an accelerator program, your paycheck money is deposited directly into the mortgage account. Of course the mortgage balance is “reduced by that amount.”
B. However, as you write checks for bills and living expenses, against the account during the month, you see the mortgage balance rise.
C. At the end of the month, the account manager applies the “left over” money to the balance of the mortgage.
D. So, in summary, the accelerator should ideally help you spend less than you earn—“and much less than the cost of the mortgage, so the “extra cash is automatically applied straight to your loan. That helps you pay it off faster.”
E. The Dark Side of the Accelerator: The only negative about the accelerator is that usually you must pay for it as a service. This means a third party is managing your account for you.
You must pay them a fee–So, now you’re spending more money! Thus, here’s what Palm State Says: DIY! Now that you know what an accelerator is, you can set up a similar procedure for yourself using your ordinary financial services, disciplining spending, and applying the money you save to your mortgage. Palm State Reveals: You don’t have to pay a Mortgage Accelerator fee–Just Do It Yourself!
Money: Do Not Take It Out To Lunch!
Popular financial guru, Dave Ramsey, gives us another little hack to help pay the mortgage bill.
He suggests you take your lunch to work from home. You don’t really have to use a brown paper bag, you know!
He says, “Trading lunch out for eating in can make you a lean-and-mean, mortgage-free machine 11 ½ years ahead of schedule.”
He adds, “From now on, your bologna has a new name. It’s M-O-N-E-Y!”
At Palm State Mortgage Company, we remind you that every mortgage owner presents a little different case.
Deals and mortgages are unique. so never “add on” to your payments without finding out what the effect of adding money to your payment will be.
You want it to be worthy of your little sacrifice.