I want to be a MFW........ LP's Diary

LilacPixie

Well as the title of the post says I want to be a MFW. There is however a few obstacles in my way.

Firstly the main one is debt. We currently have debts of the following, Credit card (0% until November), student loans totaling over 20k between us and then my Mortgage.

Secondly our current home is much too small. I bought this in 2003 when i was a student and lived alone, now I am married with two kids so a move is on the cards.

Thirdly I am absolutely rubbish at sticking to a budget.

Fouthly the bathroom in this place badly need modernisation especially as it will be on the market in around a years time.

I did have a car on finance but I paid my last ever payment on 1st July 2009 so from 1st August we will have £276 per month extra and I am very keen to put it to the best possible use. We are already saving £250-500 per month into a savings account for moving fees etc depending on bonus and overtime payments.

Currently my mortgage allows overpayments of up to 10% of the amount outstanding per year without penalty. Mortgage is not portable and is a fixed rate of 5.99% until July 2010 when it reverts to a tracker at 1% above the LIBOR. I have no intention of selling up until at least after this date due to the early repayment fees.

This is where I am arguing with myself. Credit card has roughly £1100 on it but as I say 0% until november 2009 so I am happy to continue with the minimum payments and then clear the balance shortly before the minimum period expires with our regular savings.

Obviously we will be needing savings for legal fees, moving fees etc not to mention enough equity/savings for a decent deposit. I keep thinking that overpaying the mortgage with at least some of the excess funds is the way to go because it would save me/us interest in the long run but I am struggling to get focused.

Can someone please help me get and stay focused.

dimbo61

You seem on the ball but dont give your mortgage debt ?
I would use the £276 car loan payment to overpay the mortgage each month until next july.
Pay off the Credit card in november from savings and save at least 6/9 months worth of income into regular savers/ISA,s
Work out how much a new bathroom will cost ( get a few quotes/ visit some bathroom stores) and save up to have the bathroom work done.
By clearing the car loan and credit card before next year you are giving yourself a better chance of getting a bigger mortgage/home!
Do you really need to have a new bathroom?
Can you do it on the cheap?
Get an estate agent in to look over the house early next year( get there view)
I had a new shower and tiling replaced but kept the old toilet and sink.
GOOD LUCK

LilacPixie

dimbo61 wrote: »

You seem on the ball but dont give your mortgage debt ?
I would use the £276 car loan payment to overpay the mortgage each month until next july.
Pay off the Credit card in november from savings and save at least 6/9 months worth of income into regular savers/ISA,s
Work out how much a new bathroom will cost ( get a few quotes/ visit some bathroom stores) and save up to have the bathroom work done.
By clearing the car loan and credit card before next year you are giving yourself a better chance of getting a bigger mortgage/home!
Do you really need to have a new bathroom?
Can you do it on the cheap?
Get an estate agent in to look over the house early next year( get there view)
I had a new shower and tiling replaced but kept the old toilet and sink.
GOOD LUCK

Thanks for replying Dimbo. I have 52800 outstanding on mortgage.

with regards to new bathroom it is in desperte need of doing, it has a fetching aubergine suite. plan is a DIY job, husband an a friend, who is a plumber will do it and my dad will do the tiling. Looking at a £400 suite from wickes and doing white wall tiles with a fancy looking (but cheap) boarder. Basically just something to look fresh and clean. We are thinking £400 for suite, £150 tiles, £100 shower, £100 shower screen so no more than £800 in all.

I really need to get a grip of our unnessesary spending.

financialbliss

LilacPixie wrote: »

Well as the title of the post says I want to be a MFW.

Can someone please help me get and stay focused.

What about taking a look at the mortgage free in three take two challenge (MFiT-T2)? Details here:

http://forums.moneysavingexpert.com/showthread.html?t=1402631

Financial Bliss.

tsharp

Hi Pixie,

I'd say your pricing for the bathroom was about spot on. We bought a basic white suite from B&Q, for about £410, and got £82 cashback from quidco. A plumber mate fitted it, (charged us £100 - which we thought was a bit low considering he'd spent a day on it - think we paid him double that as a thank you!) and we did the repainting and fitted shower screen and fixtures etc ourselves, probably cost about £800 all in.

pammyj74

well done on your new thread and I bet it feels great that the car loan is paid off

As you are using plain white tiles could you put a request on freecycle? I got some off there a few months ago.

definitely try and buy stuff through quidco for the cashback.

Good luck
x

LilacPixie

oo thank Pammy never thought about free cycle. I was thinking of getting my dad to get them from B&Q using his over 60's discount. Probably not ethical but hey every penny and all that.

I am a quidco addict as it is and will be using it to buy as much as possible

StuartGMC

LP
My only comment to you on the limited detail you've provided so far is the planned replacement interval on the car. Now you've cleared a car loan you never, never want one again. Suggest you consider this in budgeting your annual saving requirements in addition to the OP etc.

The key to success is having understanding of your expenditure then taking pro-active control rather than being reactive at the end of the month.

If you are struggling to see "where" your money goes, then I 'd recommend getting the details down on all regular payments (direct debits and standing orders) which are monthly and annual. Then look at the big spend items you know you incur like; all the insurances needed, your car maintenance costs, annual costs for kids (child care/school club/cubs/brownies/swimming lessons etc i.e. all the things you should be able to work out).

Then you need to start gathering data on the spend you make; recommend you use either a credit card (provided you will without fail pay it in full each month) or use your debit card; avoid using cash as much as you can. In this way your bank will collate much of the data for you in your online statement; easy to then look back over 2-3 months

You'll see you can get a lot of data, but simply drop into a spreadsheet and tweak it as your data improves. For example for groceries put £400 per month, then as you get data you can correct it (or alternatively average the data by keeping simple records in a spreadsheet).

As others here know, I'm more than happy to send my household budgeting spreadsheet if you haven't got one already.

The other thing which will really help, is maintaining a regular diary here with the excellent input you'll get from the fellow MFW-ers especially those more adept than I with energy saving, money generating ideas etc.

Best wishes

LilacPixie

Thank you for you imput Stuart. We currently have two cars, one was bought outright but is now 7 and the other that the finance has finished is a 55 plate so is just under 4 year old at the moment. We will probably downsie the older car to a small city run about in 2-3 years time unless something happens.

With regards to money, i know exactly where it goes.... I spend too much on non-nessesities and it has too stop. I need to start sticking exactly to my budget whenever possible.

With regards to energy saving we are probably quite wastefull. tv's left on standby overnight etc.

Grooceries I am quite good with as i tend to make the vast majority of meals from scratch. I also bake own bread and biscuits/cakes as I have a real hatred of additives and I refuse to give my kids cakes that have a 12-18 month shelf life.

I would love your budgetting sheet Stuart. I am not very excel savvy. Would you like me to PM you my email address??

With regards to money making I need to get listing on ebay. I have lost 4 stones since I had my daughter and I literally have a wardrobe of clothes complete with tags in various dress sizes that I no longer am.

LilacPixie

Well it's all go here.

I am currently researching an instant access savings account to see if we can get one with a decent rate of interest. currently using our A&L esaver for accesable savings and a halifax regular saver for non accessable savings.

I have called mortgage co for details to set up a standing order to pay them additional amounts. Hopefully we may be mking a small payment around the middle of the month in an effort for get started on the MF journey

MoneyQueen

Hi LilacPixie,

Just wanted to welcome you to MFW Board and Good Luck with with MF very soon...

MW