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  • FIRST POST
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 590Posts
    • 2,606Thanks
    SuperSecretSquirrel
    Onwards to freedom!
    • #1
    • 8th Sep 12, 12:07 PM
    Onwards to freedom! 8th Sep 12 at 12:07 PM
    Hello and welcome to my MFW diary. Not sure how often I'll update as I'm going down the boring 'increase monthly mortgage direct debit' route, not the more interesting to read 'random repayment as and when a bit of extra money is made' route. Still, no harm in starting a diary here, even if it's just for me to look back on in a few years time!

    It seems like a good idea to start with a bit of background, so here goes...

    We bought our house in July 2010 with an 87k repayment mortgage, fixed for 10 years at 5.29%. Nearly two years of £525pm standard repayments allowed us to rebuild our savings, but after 20 monthly payments (over 10k paid out) the mortgage balance had only dropped around 2.5k thanks to all the interest being paid...

    We decided to make a small start on overpaying - small overpayments early on have quite an impact over the long term so why not start small and ramp up later? March 2012 we made our first regular overpayment, £50pm. Amazingly, if we were to keep up with this £50pm over the life of the mortgage we'd be mortgage free nearly four years early (Nov 2031) and save ourselves a tidy bit of interest. Not bad rewards for just £50 a month!

    A few days ago I decided to step things up a notch. From next month the regular overpayments will increase to £250pm, £200 less will find its way into my long term savings (paying 2.8%, minus basic rate tax), £200 more will find its way to the mortgage provider. Makes a lot of sense looking at the interest rates! I'll keep on saving in a normal savings account though and won't be putting every penny into the mortgage - I'm used to seeing my savings grow monthly, and like to try to be prepared for any eventuality, so I'll keep on squirelling away a chunk of my income in savings each month. I know this isn't the most efficient option in terms of reducing interest payments, but it's a balance that keeps me sane, if there's any major disasters the savings are there to fall back on, that kind of peace of mind is well worth a few pounds! Anyway, here's where the numbers get really interesting - by overpaying £250pm for the life of the mortgage we'd be mortgage free nearly eleven years early (Oct 2024). Wow!

    Seeing the massive savings I started looking into this stuff in more detail. We're allowed to overpay up to 10% of the mortgage balance each year without penalty. I don't want to increase overpayments over £250pm right now, but maybe after another year or so of growing my savings I'll step up the overpayments to £500pm. Two years later the overpayment would need to drop to £450pm (to avoid penalty), year after that drop to £400, and the following year drop to £350, and the years after that drop to £250 at which level the op's would have to remain until the end of the fixed period (August 2020). If we were to follow this plan, at the end of the fixed period our mortgage balance would be around about 20k which we could pay off with a lump sum from savings. Mortgage free fifteen years early, at age 36, sounds awesome, and what's incredible is that it also sounds very realistic.

    At the moment overpaying is my project. OH and I have our own accounts that our wages are paid into, and a joint account that we feed monthly to pay the bills. As I earn a little more I also do the grocery shopping, pay a few extra bills, and overpay the mortgage. Beyond feeding the joint account OH's income is none of my business, it can be spent on whatever OH likes, same goes for my income. This works well for us - if I want to splash out on a new computer game or a night out or whatever I can do so without needing to consult OH, and if OH wants to splash out on a night out or clothes or whatever no need to consult me. We're both debt averse and savers by nature, so as long as we spend less than what's coming in and all the bills get paid all is well. I'm hoping that seeing the mortgage balance reduce might convince OH to get involved in overpaying the mortgage (or at least split savings into two pots, one 'spendable' short term pot for holidays and home improvements etc, and a long term one earmarked for paying down a lump sum on the mortagage), but there'll be no pressure, if OH joins in that would be excellent, but if not that's ok.

    Finally, I know life doesn't always go smoothly - anything could happen in the next 8 years, babies, redundancy, armageddon, "the best made plans of mice and men, often go awry"... But if things don't go to plan, nevermind, we'll have made a great start on the mortgage regardless, any overpayments we make early on will benefit us later on, so we may as well give it a shot while circumstances allow It's nice to remember that circumstances can go up as well as down too - maybe there will be payrises and good fortune along the way that make achieveing the target easier, who knows!

    ----------

    January 2014 Update:

    Things have changed quite a lot since I first started this diary... The new aim is to hit the MFiT3 target of a 40k mortgage balance by end 2015, and to have 40k in savings by that time too, making us mortgage neutral 20 years early! Anything can happen, but I think it's time to aim high!

    ----------

    March 2015 Update:

    We did it! We are mortgage neutral (savings balance higher than outstanding mortgage) and are locked in to achieve the MFiT3 stretch goal of mortgage below 40k by the end of the year I'm going to keep this diary going, the aim is total financial independence now!
    Last edited by SuperSecretSquirrel; 20-05-2015 at 8:14 AM. Reason: We did it! :D
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
Page 24
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 4th Sep 17, 7:33 PM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Thanks KC, yes we've had a really nice time Might not be everyone's idea of a good time, but doing the simpler things with our two small children is what we enjoy the most!
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Sep 17, 8:23 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Another small PB win this month

    I've paid a total of £151.34 in money transfer fees, and £6.35 in interest. Received £25.27 cashback, and 2 x £25 premium bond prizes.

    2 months into a 24 month experiment I'm £82.42 down. Plenty of time to break even and then start making a profit. Nothing is guaranteed with PB's, so I could end up being down by £82.42 at the 24 month mark. There's also a vanishingly small chance of ending up around £1m better off. I guess reality will lie somewhere in between.

    Interestingly, a holding of 50k is more likely to hit the £1m jackpot (1 in 28,537) than it is to win nothing (negligible). At least £500 is a virtual certainty, 96.9% chance of at least £750, 63.3% chance of at least £1,000, 7.02% chance of at least £1,500.

    Average luck would see me win £1,000 over the two years (if I don't shift any money out into better options in the meantime). That's a stooze profit of £867.58. Will be fun finding out if my luck is average, below average, or above average

    Interestingly (for me anyway), the chances of hitting a million being 1 in 28,537 doesn't seem all that bad. As a percentage, 0.0035% - never gonna happen. Funny how the same number, written in two different ways, give totally different gut reactions
    Last edited by SuperSecretSquirrel; 06-09-2017 at 1:38 PM.
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • Betterthanever
    • By Betterthanever 6th Sep 17, 9:40 AM
    • 370 Posts
    • 1,520 Thanks
    Betterthanever
    Well done on the win....I'm sure it will be an experiment worth doing! And of course, essentially "risk free" so you know you can get your money back if you need it. I'll be watching with interest!!

    Current balance £115,428.65. Offset £1,775.31. £113,653.34 needed to be mortgage neutral!
    End date - 03/29 but aiming for 10/22
    Money for Nothing pot = £392.99
    Former DFW Nerd 230. Determined to be MF. Bring it on!
    • Lexi-lu
    • By Lexi-lu 10th Sep 17, 10:52 AM
    • 149 Posts
    • 717 Thanks
    Lexi-lu
    Hello SSS,

    Congratulations on the win and wishing you lots of luck

    LL
    Mortgage Balance £49,230
    Savings for O/P Sept £20,320
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 21st Sep 17, 7:58 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Thank you both, fingers crossed for the October draw

    Nearly six months worth of detailed spending records under our belts now... Yesterday I realised a couple of cashback payments had been missed off the spending diary. Rather than lump them all into September, I've gone back and added them in the right place. I'll do a mini six month review with the corrected values soon.

    Reviewed my credit club credit score history too: 891 June, 786 July, 650 August, 564 September... Down down deeper and down

    In theory it shouldn't drop any further. No more borrowing or applications planned short term, and repayments slowly reducing the stooze pot... But next on the agenda is closing the mule card and some dormant current accounts, and potentially reducing the credit limit on the slow stooze card. This will reduce my available credit, but it will also result in my used credit percentage shooting up, will be interesting (to me at least) to see how this affects my score

    Not much else to say, other than if we stick to the January lump sum plan we have just 3 mortgage repayments to go!
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Oct 17, 7:34 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st October 2017
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    £125,000.00        £0.00        £0.00        £0.00
    Cash:            £41,352.54     -£296.82   -£1,299.36   -£6,016.73
    Pensions:        £72,450.57   -£1,109.01    £2,701.48   £16,020.82
    Car Value:       £15,145.00       £95.00       £60.00    £5,795.00
    S&S:             £22,539.52      £810.38    £3,166.02   £11,378.93
    Mortgage:       -£16,426.36      £756.30    £2,254.03   £11,368.44
    Due to HMRC:       -£432.40      -£20.43      -£20.51       £46.21
    Student Loan:      -£513.79       £66.20      £131.60    £1,829.96
    Total:          £259,115.08      £301.62    £6,993.26   £40,422.63
    86.4% of the way to 300k net worth (2020 challenge), 13.1% mortgage ltv, £47,033.30 beyond mortgage neutral in liquid assets, 16.5% financially independent.

    Barely any change to net worth this month, mostly thanks to pensions taking a hit. Oh well, can't win them all I'm not in the least bit concerned by dips in pension value, though I admit the quarterly/yearly comparison make it clear that this is a very minor blip along the way. I might be a little less sanguine if the year on year value was negative That could easily happen sometime in the future

    I'm happy that everything within our sphere of control is still being handled well. No real progress this month, but through no fault of our own, so there's nothing to be done about it
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Oct 17, 8:40 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Spending Review
    Here are our household spending totals for the past six months:

    Code:
              BILLS     SHOPS     OTHER      TOTAL
    Apr     1278.73    291.91    721.37    2292.01
    May     1526.24    330.91    419.88    2277.03
    Jun     1518.57    304.92    397.63    2221.12
    Jul     1426.33    343.04    759.65    2529.02
    Aug     1167.57    329.88    333.92    1831.37
    Sep     1174.28    425.27    437.43    2036.98
    Total   8091.72   2025.93   3069.88   13187.53
    The bills category is comprised of mortgage, childcare, council tax, electric, gas, water, phone, internet, home insurance, life insurance, tv license, tv subscriptions, mobile top-ups, transport including all costs related to running two cars (fuel, tax, insurance, servicing, repairs, etc). The mortgage is without doubt our largest outgoing, having halved the term we are paying £828.48 per month. £4970.88 of the £8091.72 bills total was spent on mortgage repayments, leaving £3120.84 spent on all the other bills, an average of £520.14 per month. The mortgage line will disappear soon, and our outgoings should drop quite sharply as a result

    The weekly shops category includes all food purchased for preparation at home (including work lunches), basic toiletries, cleaning products, nappies, baby formula, etc. Pretty much all the things you'd have expected to buy from a supermarket around 20 years or so ago (so no clothes, toys, electronics, appliances, etc, just the basics). We tend to buy most of our meat from the local butcher, pretty much everything else comes from the likes of lidl or aldi, though we do use other shops to top-up on the handful of branded must haves. Average spend £337.66 per month. I'm sure it could be a little lower, but nappies and formula aren't particularly cheap, we eat well, and the house and ourselves are immaculately clean, I'm happy with what we're spending and what we get in return.

    The everything else category covers... everything else! £3069.88, or an average of £511.65 per month. Gifts, clothes, books, toys, appliances, entertainment, takeaways, meals out, holidays, days out, furniture, gardening, health and beauty, all the stuff that's over and above scraping out an existence. This area could be cut back on quite a lot should we wish too, but we are happy with the balance we have at the moment. We and the children want for nothing, so we're happy to achieve that on what I think is a relatively small amount of spending, even though it feels quite luxurious.

    My "finger in the air" annual household spending estimate (used in my financial independence calculation) was set at £28800. Six months in it seems as though we're actually spending a couple of hundred pounds a month less than this. Once OH returns to work and we start paying for more childcare I think it'll even out. I'll keep the £28800 figure for now.

    Once the mortgage is gone (soon!), if all else stays the same (it won't!), and we can assume the next six months will match the last six months (they won't!), our average monthly outgoings would be £1369.44. Pretty close to OH's net monthly salary working 30hrs per week. That would leave the sum I bring in as being available to save and invest for the future. That's quite a nice way to think about things, even if it's not how we structure things in reality
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 5th Oct 17, 8:30 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Taking the past six months as an example, stripping out the soon to be settled mortgage, we're spending £1369.44 per month. If we were state pensioners right now, our state pensions would equate to £1382.77 per month. Two full state pensions alone would be enough to cover our current lifestyle. Any personal provision we had made would be an added bonus.

    I doubt the state pension will be quite so generous when we reach state pension age, if we ever reach state pension age... No doubt it will be means tested too. Looking at how things stand, however, it's quite encouraging. Drawdown during early retirement could eat into the capital, and provided we lasted until state pension age before running out completely (since were talking early retirement, earning more money should be an option if this started looking likely!), things would be pretty much ok. Of course if your drawdown amount is set appropriately you shouldn't be eating into the capital in the first place, so that makes for a luxurious retirement with enough cash sloshing around to treat the children and any future grandchildren... and ourselves!

    I'm honestly quite shocked that we're essentially living our lives on the budget of the poorest of OAP couples (assuming they are not repaying a mortgage or renting). It doesn't feel the least bit austere. Of course there would be no slack in the budget to deal with any large unexpected expenses, so it wouldn't be without its stresses, but even accounting for that I'm very surprised!
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • greent
    • By greent 5th Oct 17, 9:12 AM
    • 6,431 Posts
    • 64,914 Thanks
    greent
    Is that assuming, though, the new-ish higher rate of state pension @ £155-something/ week?- I thought it was the case that many existing pensioners got less than that, which would bring the joint monthly amount down by possibly £280-300ish/ mth?
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) Bal 01/09 £124616 01/10 £104927 01/11 £89873 01/12 £76317 01/13 £52546 01/14 £35356 01/15 £12133 07/15 £NIL
    Next: BTL Mtge 12/16 £69786. 2017 OPs (#18) £5034/£3286
    Net sales 2017 £1226.02/£500 PAYDOX17 £11937/£10k Decluttered 1760/2017 items
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Oct 17, 7:52 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Thanks greent, I just looked up state pension amount on the gov.uk site and was unaware of the huge gap between what people that start claiming this year receive compared to those already claiming. Seems a bit unfair, but I guess the tradeoff is they get a higher amount but starting at a later age, so for shorter time if life expectancy stops increasing. If that trend continues I guess I can look forward to a thousand pounds a week from my 120th birthday
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • Moneyfordreams
    • By Moneyfordreams 6th Oct 17, 9:37 AM
    • 902 Posts
    • 4,398 Thanks
    Moneyfordreams
    hope it won't be means tested, after years of paying the b00gger and saving the last thing they should do is take your entitlement off you.

    Great summary
    Mortgage Feb '13 £200000, end 2038. Aiming for before March 2025 (crunched to 2034)
    January 16 £182800 : minimum £360 OP but needs to be £600 to achieve 2025
    Current mortgage £158200
    h@lifax CC £4300 0% until May 2018.. will pay minimum for now, slow stooze
    CC daughter gift and holiday spends £2200
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 19th Oct 17, 8:35 AM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Time will tell I guess MFD, and thanks

    Credit club update has come through - score increased by 47 points in the space of a month, I'm now sat at 611.

    What did I do to achieve this?

    Nothing.

    Minimum repayment DDs have gone out, and that's all. No accounts closed. No credit limits reduced. No active attempts to improve my credit rating at all.

    It's a funny old world, the world of finance, insurance, and credit scoring...
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 1st Nov 17, 5:45 PM
    • 590 Posts
    • 2,606 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st November 2017
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    £125,000.00        £0.00        £0.00        £0.00
    Cash:            £40,918.17     -£434.37   -£1,086.99   -£6,971.75
    Pensions:        £75,837.86    £3,387.29    £4,481.27   £16,483.31
    Car Value:       £15,140.00       -£5.00       £75.00    £5,940.00
    S&S:             £24,173.04    £1,633.52    £3,586.53   £12,335.32
    Mortgage:       -£15,667.31      £759.05    £2,265.90   £11,421.25
    Due to HMRC:       -£450.15      -£17.75      -£61.55       £72.30
    Student Loan:      -£447.54       £66.25      £198.55    £1,825.13
    Total:          £264,504.07    £5,388.99    £9,458.71   £41,105.56
    88.2% of the way to 300k net worth (2020 challenge), 12.5% mortgage ltv, £48,973.75 beyond mortgage neutral in liquid assets, 17.3% financially independent.

    Crikey! What a difference a month makes...

    My last net worth update (1st October) saw us making pretty much zero progress - pensions and S&S took a hit, modest increases in other areas, net effect being very little changed overall. This past month has seen equities race ahead again at quite an alarming rate with over 5k added to net worth in a single month!

    It's hard not to enjoy seeing this kind of monthly net worth increase, but it really does feel like a bit of a rollercoaster ride at times!
    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k] £15,667.31
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k]
    48,973.75 (MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k] £264,504.07 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%] 17.3%
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