I like saving money. No, I mean I really love saving money. You know that feeling that you get when you get something accomplished that you've been working at for days; or the rush that you get after a good run or workout at the gym? Saving money gives me that feeling. I don't mean to sound corny at all but I consider it fun when I electronically move money into investment portfolios from our chequing account.
We recently refinanced our residential mortgage in order to lump in our home equity line of credit, which was the result of borrowing money to invest during the financial crisis in late 2008, early 2009. At the same time we increased our amortization to 35 years and changed our payment frequency to monthly instead of accelerated bi-weekly. My plan with this strategy is to do what I love to do and save more money. Since interest rates are currently low, we will be lowering the priority on paying our mortgage off while socking the extra funds in dividend paying investments. Our mortgage rate of prime less 0.60% (currently 1.90%) will enable us to save more capital and invest it. At any time we have the freedom to switch gears and make larger payments toward our mortgage if the circumstances change. For now though saving is the priority and I plan to ramp it up!
One of the main reasons why I like saving money now is that it really pays off years down the road. I am 31 years old; I want to put dollars to work now so that they can pay us in spades later in life. I don't need too much stuff right now to be happy in life, and coincidentally I have big plans for any extra funds that don't contribute to that happiness. A $500,000 portfolio of dividend paying stocks can easily pay out $25,000 per year in income. Wouldn't it be nice to make an extra $25,000 a year before dividend taxation?
Having saving on my mind every time I log in to my banking site is something that lends itself to my saving prowess. Moving money around is easy and it gets it out of the way, and out of my sight which inhibits wasteful spending. I don't like seeing money just laying around, I like putting it to work.