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  • FIRST POST
    • Financialfreedom
    • By Financialfreedom 6th Sep 17, 9:02 PM
    • 15Posts
    • 16Thanks
    Financialfreedom
    5 year plan
    • #1
    • 6th Sep 17, 9:02 PM
    5 year plan 6th Sep 17 at 9:02 PM
    Having achieved all the usual aims of house, job, family etc. I am now in desperate need of a new 5year plan! So instead of upgrading my lifestyle, I'm keen to follow the motto of 'same house, same spouse, same car' to take us to a mythical place known as 'mortgage free living'. Having scrimped by for years living pay check to pay check whilst paying out vast sums for the kids nursery, we are now back in the land of financial comfort and able to enjoy all the little extras, like a new car, bigger house, more holidays etc. Sounds great, but it's comes at a price. The rat race! And I am asking myself the question of whether I want to work for the next 30 years in a 9-5 office job with 25 days holiday. Maybe not...

    I have been reading these forums and the idea of being mortgage free is an exciting concept. My partner and I are in the position we can live off one wage (frugally) and save the other. Putting the spare cash into savings, house renovations, holidays AND have spare to pay off the mortgage. Mainly possibly because of low interest rates and no more school fees.

    As much as I want all the material things in life, like a new sofa, huge house and bigger garden, the idea that I can still have all that in 5 years when I am debt free and have savings is a massive appeal. I also need to think about splitting between house payments, savings and investments.

    Having done the maths, I believe I can make regular overpayments on my mortgage by next spring of up to £2k per month (still less than childcare fees! It really has been tough...) and have some cash saved up.

    Over 5 years, that's £120k off the mortgage without any consideration to pay rises or bonuses. I haven't factored in overpayment charges, my mortgage allows up to 10% overpayment per annum. Anything over that will be saved and repaid at the end of each mortgage term.

    I have never saved in my life, so this will be a novel and trying experience, so please do send lots of saving tips my way!

    Step one - remove bank cards from wallet and accept cash allowance of £500 per month from OH...
Page 1
    • Betterthanever
    • By Betterthanever 6th Sep 17, 10:43 PM
    • 363 Posts
    • 1,509 Thanks
    Betterthanever
    • #2
    • 6th Sep 17, 10:43 PM
    • #2
    • 6th Sep 17, 10:43 PM
    I'm on a 5 year mission too so will follow you with interest. Good luck!

    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!
    • wishingthemortgaheaway
    • By wishingthemortgaheaway 7th Sep 17, 6:07 AM
    • 572 Posts
    • 2,194 Thanks
    wishingthemortgaheaway
    • #3
    • 7th Sep 17, 6:07 AM
    • #3
    • 7th Sep 17, 6:07 AM
    You are going to smash the mortgage down at that rate.

    Have you done something to celebrate the end of school fees though? I always have a treat with the first lot of 'extra' money after paying for something - nice handbag with first lot of money not going on the student loan etc.

    All the very best.

    Wish
    The 100 payment countdown (each payment = £400)
    2017 July : £36,800 8/100 Aug: £36,411.85 8/100 Sep: £35,945.66 10/100 Oct: £35,500 11/100
    Term Mortgage free date: October 2029
    Current mortgage free date: April 2025
    • pinkypig
    • By pinkypig 7th Sep 17, 6:38 AM
    • 714 Posts
    • 6,316 Thanks
    pinkypig
    • #4
    • 7th Sep 17, 6:38 AM
    • #4
    • 7th Sep 17, 6:38 AM
    Good luck - I'll be following your journey and cheering you on
    • bexster1975
    • By bexster1975 7th Sep 17, 8:00 AM
    • 1,053 Posts
    • 4,843 Thanks
    bexster1975
    • #5
    • 7th Sep 17, 8:00 AM
    • #5
    • 7th Sep 17, 8:00 AM
    Hi

    It's addictive. You will make huge inroads at £2k a month. If you need motivation, work out the daily interest on your mortgage.

    The thing is, scaling your lifestyle is unlikely to make you happy long term. Being mortgage free will offer you the freedom to do whatever you want. That will give you a good deal of happiness I imagine. You can still do great things, just not wasteful ones. Why a new car? Is the old one knackered/ beyond economic repair/not fit for purpose? If that's true replace it. If it just now needs an MOT probably need to question why it needs an upgrade. Bigger house? If you need more space then certainly a bigger house is a good idea. Otherwise, why? It's worth remembering we are sold this desire to acquire more and equate it with success and happiness. Capitalism doesn't work if people are satisfied with what they have. As adults however, we all have a choice. I wish you the best of luck. Once you start, you won't want to stop.

    Bexster
    Last edited by bexster1975; 07-09-2017 at 10:17 AM.
    • erin_transport
    • By erin_transport 7th Sep 17, 9:36 AM
    • 324 Posts
    • 1,544 Thanks
    erin_transport
    • #6
    • 7th Sep 17, 9:36 AM
    • #6
    • 7th Sep 17, 9:36 AM
    Sounds awesome!
    I'll be following your progress- good luck
    On a mission!
    • Madcatgirl
    • By Madcatgirl 7th Sep 17, 2:28 PM
    • 327 Posts
    • 3,956 Thanks
    Madcatgirl
    • #7
    • 7th Sep 17, 2:28 PM
    • #7
    • 7th Sep 17, 2:28 PM
    Sounds like a fantastic plan! And, I agree with Bexster re lifestyle inflation! My car is 15 years old and still does what I need it to do, so no upgrade until it falls apart.
    March 2016 - £178,914.59; July 2017 £146,160.38
    Mortgage end Sept 2043; Target - pay off by March 2022, now Sept 2021
    Target balance July 2018 £112,560
    • beanielou
    • By beanielou 7th Sep 17, 3:45 PM
    • 48,500 Posts
    • 178,464 Thanks
    beanielou
    • #8
    • 7th Sep 17, 3:45 PM
    • #8
    • 7th Sep 17, 3:45 PM
    Happy shiny new diary
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~** **Weight loss 2 stone 2 lbs **

    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.*** ***Keep plodding***
    • Financialfreedom
    • By Financialfreedom 7th Sep 17, 6:58 PM
    • 15 Posts
    • 16 Thanks
    Financialfreedom
    • #9
    • 7th Sep 17, 6:58 PM
    • #9
    • 7th Sep 17, 6:58 PM
    Thanks all! Nice to have some words of encouragement! 2 days in and total spend is £11. I have sadly cut out morning fancy coffee and instead taking my own, which is worth it since I will save a staggering £400 a year!

    You are spot on Bexster, I just don't need a lifestyle upgrade. My car is 12 years old, but good for another 5. I only buy second hand (mainly since I always scratch my car, so a new one would be wasted on my bad driving...).

    I think my main motivation at this stage is that I still don't know what I want to do with my life. Without being tied to a mortgage, I would have the option to change career, travel, study.

    Next step is to set up an online payment direct to my mortgage account where all my underspend on my allowance can go each month...
    • Betterthanever
    • By Betterthanever 7th Sep 17, 7:07 PM
    • 363 Posts
    • 1,509 Thanks
    Betterthanever
    You're exactly right.....giving yourself options is what it's all about!

    And I thoroughly appreciate the coffee conundrum. My Costa habit was so huge that the manager of my local branch asked me on a date and we ended up married!!! Needless to say, he is in charge of the super duper coffee machine we have at home and I get my fancy coffees for "free" here instead!!

    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!
    • bexster1975
    • By bexster1975 7th Sep 17, 7:50 PM
    • 1,053 Posts
    • 4,843 Thanks
    bexster1975
    Financial freedom.

    I'm a coffee fan. If it helps, I have a pod machine and Aldi do great pods for about 18p a cup. Depends what you like but I take a flask in to work most days which is a nice ( cheap) treat

    Bexster
    • Financialfreedom
    • By Financialfreedom 9th Sep 17, 7:07 AM
    • 15 Posts
    • 16 Thanks
    Financialfreedom
    Thanks both! Love your story Betterthanever!

    I definitely need some saving tips, so keep them coming!

    Here are some saving tips I already do:

    1. Recycle jam jars and coffee jars as glasses and for storage (make-up brushes, crayons).
    2. Recycle plastic take away containers to use as Tupperware. Great for freezing food and picnics.
    3. Use up toiletries before buying new, including cutting open toothpaste tubes and finding out shampoo.
    4. Buy second hand furniture and white goods. My best washer dryer was second hand for £150. Lasted 5 years until it was broken in a house move. Bought a brand new £500 washer dryer that broke constantly, spent £160 on fixing it and it was gone within 3 years!

    Spend this week - £22 on food and a charitable donation.

    The weekends are my biggest expense, so will see if I can keep that down...
    • Silence101
    • By Silence101 9th Sep 17, 7:20 AM
    • 290 Posts
    • 439 Thanks
    Silence101
    Oh yes, I tend to shop a lot more at the weekend. I tend to avoid the shops during the week, making it easy to not spend, but then I go a bit crazy at the weekend.
    We're moving soon, so I'm trying not to bring anything in the house, which helps my wallet too. But I can see myself going a bit off plan when we've moved and I can finally decorate (ftb)
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • Betterthanever
    • By Betterthanever 9th Sep 17, 7:26 AM
    • 363 Posts
    • 1,509 Thanks
    Betterthanever
    Have a good weekend! Keep your spending diary to hand so it makes you think twice before buying anything!!

    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!
    • Financialfreedom
    • By Financialfreedom 9th Sep 17, 7:59 AM
    • 15 Posts
    • 16 Thanks
    Financialfreedom
    I do not have a spending diary... are there any good apps for that?

    Good luck with the move Silence101!
    • Silence101
    • By Silence101 9th Sep 17, 8:03 AM
    • 290 Posts
    • 439 Thanks
    Silence101
    Thanks!
    I haven't got a suggestion for an app, but pen and paper always works for me
    09/17 Shared Ownership 50% share - Mortgage £77500 Original MFW 2052
    10/17 OP £108.01 /£100 11/17 £176.54/£100
    • wishingthemortgaheaway
    • By wishingthemortgaheaway 9th Sep 17, 8:17 AM
    • 572 Posts
    • 2,194 Thanks
    wishingthemortgaheaway
    I YNAB all bank account transactions ( when I take cash out I assign it roughly to the pots I think I'll spend it on and just record cash spends on a page in my bullet journal, simple and works for me.
    The 100 payment countdown (each payment = £400)
    2017 July : £36,800 8/100 Aug: £36,411.85 8/100 Sep: £35,945.66 10/100 Oct: £35,500 11/100
    Term Mortgage free date: October 2029
    Current mortgage free date: April 2025
    • Jelllibeanz
    • By Jelllibeanz 10th Sep 17, 8:35 PM
    • 97 Posts
    • 231 Thanks
    Jelllibeanz
    Good luck with your journey - I'm following with interest.


    The apps I use are receipt pig and a shop prize one too. You take a photo of the receipts and they reward you with points that can be later converted to cash or prizes. Failing that I use the online banking app on my phone to regularly review how much I've spent and have left.
    Control freak taking back the reins MF and DF Wannabe
    M '09 = £103k M Feb '17 =£79.9k, Aug 17 = £69k Original End Date = Apr '34
    CC = £2900 £1550
    Loan = £7000 £5760
    Onwards and upwards
    • Financialfreedom
    • By Financialfreedom 12th Sep 17, 12:43 PM
    • 15 Posts
    • 16 Thanks
    Financialfreedom
    Thanks all. Will try out a few different approaches and see what works for me.

    I have been in to see my mortgage team. Apparently I can't simply transfer cash over as and when, I can either overpay regularly by writing to them, and/or I can pay one off amounts which must be £2k or more.

    I am really not good at saving, so will do a combination of both. Setting up an overpayment of £300 per month to begin, then when I have savings, pay some over in a lump sum. They don't make it easy!! I was sort of hoping they had an account I could simply transfer cash to now and then. Will have to be more organised...
    • Thistlewhistle
    • By Thistlewhistle 12th Sep 17, 2:15 PM
    • 1,017 Posts
    • 7,208 Thanks
    Thistlewhistle
    Hi FF

    I've just returned to MSE after a gap of 5 months so looking forward to following your thread and picking up some hints too.

    Thistle
    Mortgage at end 05/2007: £90,200
    Mortgage at end 08/2017: £74,230 paid £15,970 (17.70%)
    MFD: Original:05/2042 Projected:08/2031 saving 10yr 9 mth

    CC Debt (0% until 06/2020): £5,640 : £2,369 to go (40% cleared)To clear by 12/2017 or sooner!
    Dave Ramsey Baby Step #1: £0,322/£1,000 (32.2%)

    Age of Money at 31/03/2017 = 40 days

    YNAB is changing the way I live my life....and spend my money!!
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