So what are your best tips towards becoming MF?

ailuro2

we started with a £50 a month overpayment and added the odd spare hundred pound where we could. Then when we didn't feel the £50 was noticeable anymore we added a bit more.

See sig now....:D

uzubairu

We worked out what all the bills would cost for the month.
We included a monthly payment towards the holiday fund and entertainment (meal out/cinema), and our hobbies.
This money is saved separately
Any money left over is classed as overpayment money.

I also like to track the amount of interest I pay each month (like george_jetson suggests) and it is nice to see it going down each month.

August Stats:-

Month / Payment / Overpay / Interest (per day) / Net reduction / Balance.
Jan / 765.79 / 665.29 / 392.56 (12.66) / 1,038.52 / 96,304.95
Feb / 891.31 / 740.00 / 349.22 (12.47) / 1,282.09 / 95,022.86
Mar / 891.31 / 700.00 / 382.07 (12.32) / 1,209.24 / 93,813.62
Apr / 891.31 / 700.00 / 364.89 (12.16) / 1,226.42 / 92,587.20
May / 891.31 / 660.00 / 372.21 (12.01) / 1,179.10 / 91,408.10
Jun / 891.31 / 950.00 / 355.69 (11.86) / 1,485.62 / 89,922.48
Jul / 937.16 / 888.88 / 360.72 (11.63) / 1,465.32 / 88,457.16
Aug / 937.16 / 700.00 / 367.12 (11.47) / 1,279.04 / 87,187.12

jamesd

For me it's remembering that being mortgage free is just one goal. That means not making mortgage overpayments to reduce the cost of cheap debt but investing to reach the total mortgage value faster. Then having the freedom to choose between clearing the mortgage then or letting the money grow until it'll also fund early retirement as well as clearing the mortgage. Money used for mortgage overpayments can't ever be recovered by investing the money later, because of all those lost years of compounded investment growth at two or three times the mortgage interest rate.

So I track my net worth, not just one big debt. I watch that net worth increasing with daily valuations and know that it's buying me financial independence and an early retirement, not merely one debt gone.

Along the way the tracking of net worth means that instead of £50,000 paid off a mortgage and me getting repossessed I'd have £50,000 in savings and investments to live on for several years if I lost my job and couldn't get another one quickly.

I don't currently have a mortgage. Instead I have the savings and investments that will eventually pay one off, starting before I even begin the mortgage part of the trip. Picking the right time to buy is also part of being mortgage free sooner.

Redbedhead

cheeryoleary wrote: »

I think to think about cutting down a tree... you lop lots of little branches, before attacking the trunk.

Don't think about the trunk. If you think about the trunk, its size will overwhelm you. Go for the branches. Go for the little actions. They all add up. The more little actions you achieve, the greater the sense of achievement and the more motivated you'll feel to carry on. Celebrate each achievement.
Take your time. Set achievable but challenging mid term targets. Revise your targets regularly.

Ask your library if they have this book: http://www.amazon.co.uk/Spend-Less-Handbook-Actually-Spending/dp/1906465142

Good Luck!

I like that tree analogy. I have been using the motto from I think it is Asda - 'Every little helps'

Redbedhead

setmefree2 wrote: »

We set up an extra DD every month and this just became part of our "living" expenses.

Coming on to MSE MF board has helped me a lot as it helps to be able to "talk" to like-minded folk. In "real life" I know not one person who is trying to be MF.

TBH I found our mortgage (was £250k ) a bit scary:eek: I sleep better at night now:D

We were doing this re the DD every month. Then I went on maternity leave and we just didn't have the spare cash and since I have been back to work I just have not managed to get back to doing it. I am going to re-budget I think and make sure I remember to set up the DD.

Redbedhead

Viper_7 wrote: »

To be MF just have kids, get bored divorce ya fella and rob rob him blind in divorce 'r' us uk an enjoy the steady income that follows.

Great idea :rolleyes: Except I am the higher earner so I doubt he would end up having to pay me anything:rotfl:

Redbedhead

Thanks for all the suggestions. I do keep a spreadsheet where I track the daily balance and interest paid etc. It is lovely to see that coming down.

I have been trying to set myself little targets, the latest being to get the mortgage down below £190k which we managed. Next target will be getting the small mortgage account down to £55k (need to pay off just over £1600) and then I will pick the next target. I find that keeps me motivated a bit better.

I am definitely going to rebudget. I think we have just let things slip since I have been back at work and ended up spending a bit more on food, a bit more on holidays and far far too much on my daughter:o Have to keep reminding myself that she isn't really bothered about half the things we spend money on for her!

seven-day-weekend

As setmefree says, don't have the attitude 'I'll overpay in the mortgage if I have enough left', decide how much you are going to overpay and set up a standing order for that amount so that it is just another monthly bill.

And even a small overpayment helps, it doesn't have to be £100s if you can't afford it, even £50 a month will bring it down.

Redbedhead

seven-day-weekend wrote: »

As setmefree says, don't have the attitude 'I'll overpay in the mortgage if I have enough left', decide how much you are going to overpay and set up a standing order for that amount so that it is just another monthly bill.

And even a small overpayment helps, it doesn't have to be £100s if you can't afford it, even £50 a month will bring it down.

Actually re the small payments, that reminds me of a tip I picked up on here that I used to follow.

I used to pay all the odd pence that were in the bank account in to the mortgage. So if the bank balance was £487.23, I would pay £2.23 to the mortgage to have a rounded balance of £485.00 in the bank. It was surprising how much difference that makes. Only possible if you do internet banking and you do end up with loooonnng annual statements:rotfl:

seven-day-weekend

Agreed, yes, we would put tiny amounts in too. If you have seen my entry on the mortgage-free roll of honour, you will see that the main thing we did was kept paying the same amount as it was at the high interest rate even when the rate had gone down again - we couldn't afford much else. This enabled the mortgage to finish about five years early and absorb the shortfall in our endowment.