Surplus and spending

It has been a few years since my wife and I had a mortgage to pay, but now that we do, I’m a bit obsessed with our home finances right now. After we overspent our travel budget on our recent trip to Europe, I keep reviewing the numbers to find areas where we can save and work towards paying off our mortgage as soon as possible. There are two key factors I am currently tracking.

The first factor is surplus, which is the amount of income remaining after all expenses have been paid. Both my wife and I have good salaries, so as long as we maintain our current work, our income will support our financial plans. The second factor is spending, which includes deductions such as income tax and car costs, as well as our living expenses. Deductions make up approximately 30% of our salaries, followed by living expenses at around 40%, and mortgage interest at about 5% of our income. This is how I calculated the 25% surplus. If we can maintain this level over the next five years, paying off our mortgage will be straightforward. Therefore, I must closely monitor our finances to ensure we meet our goals.