After receiving the notice from our bank that our housing loan interest rate is going up next month from Nov 2019, we started to ask around the banks for refinancing packages. We also checked with our current bank what the repricing packages are. Turns out the latter works out better for us.
We are in the process of signing the Letter of Offer with our current bank to reprice the housing loan. The interest rate will drop by about 0.5% once it has been processed. In addition to paying the repricing fee, we will also be making a partial capital repayment.
The cash used to pay for this comes from a hidden fund that doesn’t show up in our assets & liabilities, income & expenses and net worth tracking Google Sheet. Every month, we put aside some cash into this hidden fund for no specific purpose. It depends on the year and whether anything major is happening.
In the past few years, we have spent the hidden fund on stuff to treat and reward ourselves for working without affecting the growth rate of our net worth. It’s essentially an asset smoothing process to make the growth rate more consistent. This year, we decided to be more responsible and planned to use it on the maternity costs.
Since this opportunity came up to make a partial capital repayment on our housing loan as part of the repricing process, we reckon it’s a good idea to use the hidden fund for it. As for the maternity costs, we should be using my wife’s upcoming bonus payment at year end to pay for it instead.
To be honest, we don’t ever plan to invest this hidden fund. It’s meant for us to spend on things that are important to us. And this definitely does not include investments, which we still grow every month but it’s not what matters to us.
Anyway, we have been buying more baby stuff as we get ready for his arrival. There’s so many things to buy so we try to get some every weekend from shops, fairs and online. The confinement nanny and helper arrangements are in place and they should activate once the baby is born.
While our current 2-bedroom apartment might be too small for so many people to live in, we plan to utilise my parents-in-law’s place in terms of the living arrangements. Until we find a bigger 3 or 4 – bedroom apartment to move into.
We know everything is going to change once the baby is born and there’s no way to prepare for it fully. We just have to keep our focus on balancing all of the priorities and try not to drop too many balls as we keep juggling them in life.