2009 New Years Resolution-MFW Diary

StuartGMC

Tesco_points_addict wrote: »

Thank you Stuart, the savings is not officially in the 'offset pot' but in much higher savings accounts, all fixed ranging from 8% down to 4.07% whereas mortgage rate for us is currently 1.09%. Am I right in thinking this is the correct way to do things at the moment - even taking into account the tax rate on the interest it seems to be still to our advantage.

TPA, the "maths" is to consider the interest earned after tax (where it is paid) vs interest charged on the mortgage. If the former still earns more then it is in the best place. Our mortgage is an offset arrangement hence I work out the effective interest rate (but at the moment we are paying 0% interest on the mortgage so the excess cash is earning interest, but that will change in 7 days time when credit card bill will pull offset savings and current a/c down to less than mortgage owed.

You mention pensions and I agree in the last 20yrs and especially the last 10, things have become much more complex and less certain in terms of final benefits. At the moment I'm still in a final salary scheme, but this is not guaranteed if the media is to be beleived in terms of some closing to existing members in future years... hence our ISAs and wish to be MF so we can build savings and investments.

Tesco_points_addict

StuartGMC wrote: »

TPA, the "maths" is to consider the interest earned after tax (where it is paid) vs interest charged on the mortgage. If the former still earns more then it is in the best place. Our mortgage is an offset arrangement hence I work out the effective interest rate (but at the moment we are paying 0% interest on the mortgage so the excess cash is earning interest, but that will change in 7 days time when credit card bill will pull offset savings and current a/c down to less than mortgage owed.

You mention pensions and I agree in the last 20yrs and especially the last 10, things have become much more complex and less certain in terms of final benefits. At the moment I'm still in a final salary scheme, but this is not guaranteed if the media is to be beleived in terms of some closing to existing members in future years... hence our ISAs and wish to be MF so we can build savings and investments.

Would you pay into anther pension scheme or just save as much as possible?

The interest before tax (all paid on lower rate) is minimum 4.05% and maximum 8%. Mortgage is currently 1.09% (obviously free from tax) So the savings is better bet than the offset at the moment.....right? or wrong. Oh help me!

TPAx

StuartGMC

TPA
If you are paying tax at 20% then you'll pay that on the interest earned on savings, or in other words if you earn x% interest, after tax it is 0.8x%
1% interest rate = 0.8% in your hand
2% = 1.6%
8%= 6.4%

To work in reverse against your interest rate on the mortgage, Y% then you need to earn Y/0.8 after tax to be better, in your case 1.09/0.8 = 1.363%

Tesco_points_addict

Thought I would share a VERY blonde moment with you:

Did a mystery shop today. Had a job where I had to buy a coffee, now I don't drink coffee...it sends me even more doolaylee than I am normally. So anyway, looked at the menu and ordered the cheapest... an expresso..when it was served I thought blooming ek shes forgotten to add the rest of the water......yep and I then asked where to get the water from!:rotfl:Why do people buy expressos?????? Get more fluid in my sneezes!:p

TPAx

StuartGMC

TPA
Sounds like a platinum blonde moment to me :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

Tesco_points_addict

StuartGMC wrote: »

TPA
Sounds like a platinum blonde moment to me :rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:

It was!!:p

Tesco_points_addict

I'm exhausted! Having done far to many mystery shops today I am now settled on the sofa with a bottle of Cava and the TV remote!

It is raining here again, but the tomatoes seem to love it!

Tomorrow is going to be a lazy day, I might stay in my PJs all day!

TPAx

SmlSave

You deserve a lazy day TPA - enjoy it!

Tesco_points_addict

SmlSave wrote: »

You deserve a lazy day TPA - enjoy it!

Thank you. Woke up at 6am...wide awake! 9am police man knocks the door, wants to know about the people who used to live next door as a car has been found wrapped around a lampost. Why can I not get any peace??

Just remebered I havn't had lunch yet..not like me to forget food:eek:

Egg mayonise bagette in the oven as we speak, well the bagette is in the oven:rotfl:

No money making today:mad:

TPAx

EDIT: Ops just checked oven, make that one very burnt bagette.

SmlSave

make that one very burnt bagette

:rotfl:I shouldn't giggle but I've got an image of you typing on the computer while smoke is billowing behing you :rotfl:

No money making but no spending either today?