2010/02/05: Payday! Detailed financial planning. Getting ahead of schedule with my mortgage, long-term emergency fund, etc.

Today is that much-cherished payday for me.  Here’s what I’ve done today as soon as money showed up in my checking account:

1) Took 50% of my wife’s paycheck (50% is $205.50) from earlier this week and sent to our long-term emergency fund.  That is what is called PAYING YOURSELF FIRST.  That’s a checking account we have setup with IngDirect.com.  That’s a a high-yield savings account.

2) Took the other half of my wife’s paycheck (the $205.50 that was left) and transferred it to a special savings account where we are saving money to visit our families overseas next year.  To us that is as necessary as air, and we are trying to go every 3 years or so.  We do not go into debt for vacation!!

3) This is February, month two.  On month 1 (January), I sent two separate mortgage payments.  My next mortgage payment is due on March 1, 2011.  That is 13 months from now.  That is an important part of my long-term protection plan.  If I lose my job, I want to make sure I have plenty of time to find another job.  Can you imagine having to worry about making mortgage payments while you have no income?  I can’t even imagine!  This month (month # 2), I will make a single payment, which will be the next payment (of March 2011) plus the principal of the following month.  By checking my mortgage amortization table, it means that I will include an extra $816.  I will submit the mortgage payment on my next paycheck two weeks today, on February 19th.  Total that will be paid towards my March 2011 payment = $1,640.64 (March 2011’s normal payment) + $816 (April 2011’s principal) = $2,456.64.    That is how I am going to finish my mortgage very early!!!  In March (month # 3), I will be once again submitting two separate payments.  My goal is to be two full years ahead of schedule in order to have that much protection in case of an extended job loss, which unfortunately is not impossible, not in the new and more socialist economy.

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