Hope you can inspire me.

uhuru_2

Hi all,

I moved into my lovely house in August (after living in a place with foul neighbours for a year) and already hate paying out my new huge mortgage

I have a bit of credit card and other debt which I need to get rid of first before I can overpay my mortgage - well, several thousand actually! I went on the 'debt free wannabe' board and had a look but that seems to be mainly people who have problem debts. I can easily maintain well over minimum repayments so mine are only a problem because I resent them! So the Debt Free Wannabe board doesn't really give me the inspiration I need at present - hope you don't mind me coming here instead.

It is fairly important that we clear the debts so that we can start overpaying on the mortgage because OH is older than me and the mortgage lasts till his 70th birthday. I'm the major wage earner so that isn't a problem as such but I want to go part time when he retires. The only way I can do that is for us to be mortgage free by then (December 2021) which is 10 years early (his retirement age is 60 for the job he does).

Unfortunately the prospect of being mortgage & debt free doesn't seem to be enough of an inspiration to stop me having too many luxuries and generally spending when it is unnecessary so I'm hoping you lot can help. Most of the debt and the child support OH pays will be cleared by early in 2011 so we then have a target of 10 years to pay off a mortgage currently standing at approx £118K.

Welshlassie

Welcome uhuru,
A good place to start with any type of debt (mortgage or otherwise) is working out how much you can throw at it. Using the SOA Calculator prepare your budget and work out ow much extra you have to play with, see if there are any areas you can cut back on, post it here to get everyone else opinion if you want, you'll be surprised what you miss or need a bit of challenge on.
The use the extra you have "found" to throw at the debts (highest interest first usually). We all have different targets, some just wanting to pay off an extra few hundred a year, others several thousands, so set yourself a target and aim to keep it. Also try some of the challenges that are around and about on several of the boards, to raise a bit extra cash.

Regarding the inspiration/motivation, try playing arond with some figures in an overpayment calculator (i like the egg one) and see how much money you are savig yourself by overpaying and paying off early. That is usually a motivation for alot of people. We're not saying cut out all your luxuaries, but reduce them slightly, or hunt out better deals for the same thing and use the money saved towards you debt/mortgage. You can still do it, but have to box clever.

Good luck.

Optimisticpair

Hi

Ah, foul neighbours are a pain.

You already hate paying out your new mortgage. All well and good as that'll keep you motivated to get rid of it

Agrees with Welshlassie. 1st priority is getting rid of the most expensive debt you have. When you are no longer forking out the interest on it that will leave you with more cash to throw at the next expensive debt, which may be your mortgage

Our O/P style I think could be called Slow Burn. We look for good value with quality balanced against cost, if there is something essential that I could get for less without a really noticeable loss of quality I go that route.

I think the key to controlling things to achieve your MF quest is knowing where the money all goes and seeing if you could alter spending to achieve the MF state in the timescale you set yourself.

The Old style and Thrift boards are really good resources for cutting down on or cutting out wasted spending.

Are you going to use this thread as your MF journey diary?

uhuru_2

Probably a good idea to keep a diary to try to keep me on track!

We moved about 2 years earlier than we had planned because of the neighbours (we lived above a couple of drug addicts, one of whom is currently serving 12 months for robbery and threatening someone with a knife - nice people :rolleyes: ). My OH pays child support for his son which will finish in early 2011 and at that point our disposible income will jump by nearly £280 per month. Our current debt repayments are over £700 per month (wish I hadn't added that up, too depressing!) and I am to have those cleared by around the end of 2011. So at that point we will have about £1000 per month extra disposible income, plus whatever we have been managing to over the minimum on the cards.

Once all that is sorted I will work out the best way to clear the mortgage depending on what deals are around.

The current debts are 2 loans (which I can't overpay on) and 2 credit cards. Balance on card 1 is just under £6700 and card 2 is £900. Card 1 is being hit first as interest rates are about the same.

For now though I can't pay extra this month as I am awaiting bad news on a leak in the water supply pipe coming to the new house - getting quote on 13 oct. So at present minimum payments are being made and the remainder is going into a high interest account to cover that bill - could be up to £1000 :eek:

Most things I think we are doing pretty well on as far as keeping outgoings low but I plan to work through my budget seeing what I can reduce one thing at a time. Starting with the Electric / Gas - no idea who to change to though at the moment!

Welshlassie

Sometimes for motivation benefit it is nice to pay off a debt, so it may be worth considering paying off the smaller debt first if the interest rates are around the same.
The other thing to consider is saving up some money for the loans and asking for a early repayment balance and seeing what that comes out at. Depending on the type of loan it may be lower than how much you'd have pay over the total course of the loan (hope that makes sense).

Work your way through Martins articles on the likes of reducing gas bills, car insurance etc.

StuartGMC

uhuru wrote: »

For now though I can't pay extra this month as I am awaiting bad news on a leak in the water supply pipe coming to the new house - getting quote on 13 oct. So at present minimum payments are being made and the remainder is going into a high interest account to cover that bill - could be up to £1000 :eek:

I assume you can't get this covered on your buildings insurance?

I found that the spreadsheet for our household budget really helped to get a handle on precise position on finances. Improving it to use real data for petrol, groceries etc makes it very close to reality and thus a clear and confident prediction of your financial position.

Do keep up a thread, I've found my thread keeps me focused too!
Good luck in your plans.