Shouldi - Mfw 2009

SHOULDI

Hi all,

Here is the beginning of my MFW 2009 journey. I have joined the MFW 2009 thread and wanted to start a diary to keep track of things and to share my experiences. :rolleyes:

We don't have any debts EXCEPT our mortgage. £233k! :eek:

We are remortgaging to an OFFSET mortgage with First Direct. BoE +1.49%. This should be up and running for January 2009.

We have £18,000 in savings and are going to transfer this into our offset account and use it as our rainy day fund while still offsetting against our mortgage.

The plan is to overpay into the mortgage as much as possible for the next few years so we can be in a better position when we think about starting a family in the coming few years.

I've been looking into 'stoozing' as we will have an offset mortgage so the more money we keep in our joint current account the less interest we pay on the mortgage. Any ideas on how to get started?
I have a 10 month purchases credit card with a 12k limit which I only use to pay for things like car insurance and home insurance when they are due for renewal and sometimes for internet purchases for the security.
Is this what I should be using for everyday spending and paying the minimum payment and then at the end of the 10 months, Balance transfer to another card? Doesn't that cost me 3%?

Also, I'm going to change all my Direct Debit payments to the day before I get paid, so then my balance is kept in my account for most of the month hence offsetting for longer. Is this the right thing to do with an offset?

Any other tips for saving money would be gratefully be considered. I'm really inspired and looking forward to the challenge of being Mortgage Free a lot quicker than the 24 years which is left on our term. :j

Sorry for the long post and have a great Christmas... :beer:

Floxxie

Welcome to the board!

I am also a stoozer. There's a lot of information on the credit card part of the forum and a couple of members set up stoozing.com which will give you the full picture of the deals out there.

I'm personally slowing down on stoozing( by transferring money to my offset) as the fees for doing so now outweigh my mortgage interest. Instead I am going to slow stooze (use a 0% card for purchases and keep the money for paying it off in my offset account). Your question about using your 0% credit card will help your mortgage pot but yes you are right, in the current climate, transferring cost you.

I've never worked it out about moving DDs to the day before you are paid. Some of mine (my mortgage included) have to come out just after OH is paid. However I think the sums involved for us are so small, it wasn't worth me confusing myself or anybody else.

There are a lot of challenges on the DFW board to help you save/make money. I ran a horrible challenge called 'list 10 items on eBay/ebid a day' as I have a house full of clutter that would convert very nicely to money on my mortgage but I also hate eBay and needed some motivation from others! Other challenges involve not spending money but there are plenty to choose from.

There are also several people who have/had a similar mortgage to you so if you find their diaries on this board then they will give advice on what they have done to reduce it.

Good luck!

Floxxie

EssexHebridean

Hi Shouldi - and welcome to MFW!

I'm afraid I can't answer any of your questions re stoozing or offsetting - StuartGMC and FinbancialBliss are your chaps regarding offsetting I think, they will almost certainly be able to offer help on that front. I'm not organised enough to stooze!

Re the credit card thing - have you considered getting a cashback card for purchases and setting up a fully clearing DD to ensure you don't pay any interest? We've got joint CapitalOne cards and I have an Egg card - al our purchases go on these rather than using debit cards and so far we're amassing a nice little chunk of cashback which should come to us next year.

Good luck with your target - without question OP'ing makes sense - warning though, before you know it you will be spreadsheet obsessed and lusting after your mortgage statement like the rest of us on here! :rotfl:

SHOULDI

Thanks Floxxie,

I have never really given my monthly outgoings any real consideration. I paid my mortgage and the maximum overpayments, topped up my ISA's every year and brought what I needed. Quite sensible and has always been the way I thought about money.

It's taken the current climate to make me realise and to make a positive change. When finding this site and seeing what small measures people were doing and seeing some of the signatures people have with their mortgage amounts tumbling down did I realise what I could be acheiving!

So with our new offset and a low rate, I hope 2009 will make us more thrifty with our money in these uncertain times. I think I am going to start out by filling out my SOA to see where my outgoings in black and white and to understand how much overpayments / offsetting can do for me.

Thanks again for the encouragement. I'll talk to the OH about stoozing, but I know she would prefer to pay off any CC debt at the end of every month. I suppose this is where we have to start really looking at ourselves and stop assuming what we are doing is the best way... The world has moved on...

StuartGMC

Shouldi

Welcome to the board and best wishes with your plans. I've noted a few things in my diary that may help you along the way, but, the key has to be a very good understanding of your spending and your requirements for annual items (like a holiday) or longer term (replacement car).

I use a spreadsheet for this and then also capture the spends on petrol, clothing & shoes and groceries which then generate "live" data to replace your estimate. I've sent it to others, so PM me with your e-mail address if you want to have a look at it (it also includes the Offset effective interest rate calcs for you, but it is primarily a household budget system).

Other people like to use commercial software like MS Money, but personally I don't want to key in all the separate data - "horses for courses"

Some things to consider:
1) Use your credit card (cashback, reward or 0% as you prefer) to buy everything each month inc groceries etc. The best are online so you can regularly check balance and check for any fraud items too (IMHO), plus see (b) below. Then, once the bill is generated online, set the money to leave your bank account in full, about 4 working days before due. (Faster Payments may, but with caution, allow you to reduce lead time; I have creditcard with the same bank and the first two FP went through on the day, but others have not been so lucky).

a) This will allow you to offset your normal monthly spend.

b) If you also have to incur business expenses which you reclaim on your own card, then print those off as soon as they are visible online and get the claim submitted. In my case it can lead to about £800-1000 extra offsetting for a few weeks until bill payment is due.

2) When looking at insurance deals like buildings and contents, do be very careful not just select on price. See my thread for a few comments which surprised me on the difference in cover you could end up with!

3) Find some interim targets to help you see progress along the way. One thing I don't have but in hind sight would be a good motivator, is to record the interest rates over time so you can start to see the total saving in future years (not just the saving from "now" to the end). I find a few graphs and information on the effective interest rates work for me.

4) Don't put life "on hold"; this is a long term project and you need holidays etc along the way, so realistically detail what you want from the holidays and every cost from stepping out the front door until you return. Put this in your "annual" costs allowance".

5) Do remember to allow for any major spends likely in the next 5-10yrs e.g. replacement kitchen at £12k in 5yrs time means putting £[strike]600[/strike]2400 (doh! must be tired!) per year in your annual saving requirement. I have something like a nominal £4500 each year as part of what we have to save to allow for replacement of our cars on an ongoing basis. Think about windows, doors, guttering/soffits/facias, plus items like TV, music system, cameras, PC, washing machine, tumble drier etc which you need to replace on a routine basis (e.g. PC every 3yrs, TV every 8yrs....).

6) Overpayments (OP on here) really make a difference especially combined with offset. However, balance your complete planning to cover pension, mortgage, savings and investments.

Our experience once our daughter came along was that it really reduced our OP ability (we have always overpaid since starting mortgage in 1994) but you will slowly recover from this over time. We've offset since 2006 when we moved lender with £32.5k remaining. Offset alone saved about £1500 since June 2006 until this month. OP makes an even bigger impact.

I hope that gets you thinking a bit and look forward to readign your diary, I found mine has really helped me to "up the game" with all the support here. My thread started 30 May this year, so you may want to dip into it for a few things? Here

Best wishes on your journey

SHOULDI

Hi StuartGMC,

Wow. I am so taken a back with what length you have gone to help me. Thank you so much.

The spreadsheet would be so helpful. I think the most important tool will be a spreadsheet I am comfortable with and for us to realise the impact this will have on our lives.

Thanks again and appreciate all your comments. Looking forward to reading your journey so far...

It seems such a monumental task at the moment, and I think you are so right, I need to break it down a little and realise this will take time and planning. Not keep wishing for that big lottery win! :rotfl:

:T Thank you.

SHOULDI

Hi EssexHebridean,

Sorry, your post got lost in my own reply to Floxxie. (Sorry still getting used to this site). Thanks for the tip. I definately think that the Cashback CC could be a goer. Especially as there is little risk involved. I may wait a while as I am in the process of remortgaging and I don'twant anything to get in the way. But as my 10 month 0% deal comes to an end, I will look at a Cashback deal for sure.

Thanks for the encouragement. I've even got the OH looking at all of your replies. So fingers crossed, she will start to see some of the suggestions and we can think them through together...

EssexHebridean

I think that's the key to be honest - at very least you both need to be working together on this quest. I started out phase one of my own plan with Mr EH convinced that I wouldn't be able to do it - I was so chuffed when I was able to prove him wrong and I know he's seriously proud of me for pulling it together and doing it. We're both focussed on mortgage OP's now and also determined to keep our costs under control and build up our savings. Getting him organised is my problem - he's not the best when it comes to his finances! I never used to be either but have now taken to being a saver not a spender like a duck to water!

StuartGMC

SHOULDI wrote: »

Hi StuartGMC,

Wow. I am so taken a back with what length you have gone to help me. Thank you so much.

The spreadsheet would be so helpful. I think the most important tool will be a spreadsheet I am comfortable with and for us to realise the impact this will have on our lives.

No problem, people are always kind enough to help me here it's what makes this such a great community.

Spreadsheet is in your inbox. Have fun, but don't be overwhelmed initially.

StuartGMC

EssexHebridean wrote: »

I think that's the key to be honest - at very least you both need to be working together on this quest. I started out phase one of my own plan with Mr EH convinced that I wouldn't be able to do it - I was so chuffed when I was able to prove him wrong and I know he's seriously proud of me for pulling it together and doing it. We're both focussed on mortgage OP's now and also determined to keep our costs under control and build up our savings. Getting him organised is my problem - he's not the best when it comes to his finances! I never used to be either but have now taken to being a saver not a spender like a duck to water!

EH very sound advice!

SHOULDI

Spreadsheet has taken some time but have put in as much information as I can get from receipts, payslips, Direct Debits, estimates and previous costs.

All in all, I think I am ready for the challenge. I have got all the tools, will power, OH on side and a plan for overpayments.

Now for the execution. Let's hope for a successful 2009 and a life towards becoming MF!

I have decided to use slow stoozing (0% credit card).

Two things to look at while I am off this week:

1. Cut down my electrical usage. I.e. Look at what is left on standby in the house
2. Looking at making some money using Bingo cards and onine clicks.

Has anyone got any quick tips to get me started or any other money saving ideas I can use while I have a few days off to look at them?

Thanks.