When we started this blog, we wanted to write about all the many steps involved in preparing to travel – not just about the travel itself. There are sooo many other travel blogs out there to make you motivated – or envious!
We wanted to really focus on HOW we were going to make it happen, HOW we were going to change this from just a dream to an actual plan, with all the steps in between.
We were taking some giant steps forward in the plan. We bought our Caravan! We refinanced our mortgage in order to reduce our repayments which would enable us to save more.
And then things happened…
Crispy’s back went from bad to worse – which was an incredibly scary time – and then he had his surgery. We then had to kick all our backup plans into effect just to get through, utilizing our income protection insurance while he wasn’t able to work.
And for a while there, the plan was the last thing on our minds. Actually, that’s not true. It was the thing in the back of our minds that we had to look forward to on the other side of all of the pain and drama.
But there were so many unknowns about how this was going to affect us over the longer term, and in the shorter term, well, we had to just concentrate on getting Crispy to heal and get fit and strong again.
About 2 months after the surgery we decided to readdress our financial situation. We now knew what our income protection insurance was going to provide monthly and that they were supportive of the long, slow process of recovery we had ahead of us.
That removed so much of the unknown and the worry surrounding money – for the time being.
We discovered that while we had let our attention wander from the plan we had, in fact, set ourselves back in our progress.
So we had to restrategize, re budget and rethink where we were spending our money to get back on track.
(For a link to the software we use for our budget, check out Simpleplanning.com. We use their premium budget planner for our daily expenses tracking)
For me, I was afraid we were letting the dream get away from us. It’s so easy for things, for life, to get in the way. You save a bit, and then there is a dentist bill. Then you save a bit, and there is an unexpected vet bill. And the projected date by which we will have “Enough” money just seems to be getting further and further away.
Neither of us, are in huge paying jobs, let me say. My business this year has barely scraped through to cover its own costs! And Crispy’s income protection is only 75% of what he was earning when he was working.
When we did our tax returns this year, our combined taxable income actually puts us below the poverty line. We’re doing ok, but please don’t think we are some sort of “lucky” couple who’ve had it come easy to them.
But having had a few tough years under our belts already, we have gotten very good at budgeting. And we have made some clever choices in the past that have allowed us to keep feeling like we were making some gains.
Our rethink really brought home the importance of having a long-term plan, with targets in place and steps for reaching them.
So, how are we still on track?
Well, for us the biggest step was to refinance our home. But first, let me go back a step. When we first purchased our home 5 years ago, interest rates were much higher than they are right now. They were still fairly low but they had only just begun to drop at that time and lenders were being a bit careful.
It was at a time when many people were getting themselves into huge home loans they could barely afford and any sort of rate increase would’ve meant they were sunk as they were already completely stretched to their limits.
Crispy and I are planners. We think about the “what if’s” and try to always have a backup plan, just in case (hence the very handy as it turns out, income protection insurance!).
So right from the start we worked out what was the maximum repayments we could afford to pay towards our mortgage and ensured ourselves that even if interest rates rose another 3 or 4% we would be ok.
And we actually paid that amount – right from the start! And interest rates continued to drop! So we made some quick gains on our mortgage.
Aha! So that’s how they can afford this fabulous trip…?
Well, no. That’s how we could afford the very expensive IVF process that sadly, after costing everything we had, netted no result for us and left us wondering what to do with this different version of life that now lay ahead.
But it was such a simple budgeting trick that we learned, and we have put that into effect again. We had our home revalued and it was nice to find that over the 5 years, our home had increased a little bit in value. We got a reduced interest rate and even though we bumped out our total loan amount, we reduced our monthly repayments by $1200 a month!
When people talk about saving money there are two main options suggested – increase earnings or reduce spending. Well, with Crispy out of action, increasing earnings was not looking easy done. And with an already stretched tight budget, there wasn’t much fat to be cut!
We don’t buy our lunches or daily coffees… We don’t have gym memberships or spend a lot on clothes, shoes, makeup or date nights… As much as possible we had already reduced our household bills.
But in one fell swoop, we had just netted $1200 a month with no lifestyle adjustment at all! If we simply continued to pay what we were already managing to pay, within 12 months, that would be $14,000 saved! The extra bonus is, it is also reducing our repayments even more by saving us interest over the term of the loan!
Interestingly, we have friends who see very little change in our day to day lives and they assume we have given up, or that we are putting it off for now but they don’t see we are still making progress behind the scenes.
There is more boring mortgage stuff about offset accounts and interest only options that have set us up for when we eventually rent our home to tenants when we go, but I’ll leave all that for another time.
We have also realised over this past 6 months how important it is to have rewards along the way. It is hard to just keep chugging along like ‘the little train that could’ until… when it is still so far away! So when we can, we make purchases that still count towards the goal, but that actually make us feel like we are getting that little bit closer all the time.
And now that we have the caravan, we can ‘practice’ for free – even if that means camping out on our front nature strip for the time being. That’s how we can keep the focus and motivation when things get boring and tough… like they are at the moment. But that’s another story.