MFW by 50 years old (2020)

Charlie_H

Hi Everyone,

Here's my MFW and savings plan to aspire me to keep a diary and reach my targets.


A little history first:

I started to overpay my Nationwide mortgage every month by £499 in March 2009. I borrowed £165,500 in April 2007 to purchase flat at £279,950. The mortgage is fixed at 5.18% for five years. I started to overpay as was fed up of the low interest rates offered on savings and felt the best place for any excess cash was in my mortgage account. I wrote on MSE about this back then asking for advice and followed a plan that any money available in excess of savings to cover unemployment should be ploughed in. I have sufficient savings to cover 6months unemployment (approx £9000). A link, provided by an MSE user, to Karl’s mortgage calculator triggered the aspiration to take on the challenge to be MF.

I’m now sharing my experience on MSE to keep the motivation going. I have to often read the diaries of others to keep going as at times I feel what’s the point. I often think whether I should enjoy the money instead of excessively budgeting. I have no children and don’t plan to have any. Therefore the incentive of leaving a property to any kids is lacking. My only motivation is that by the age of 50 I will no longer have to pay 50% (75% with overpayment) of my net pay out for a mortgage. I've always been very careful with money and can easily live within my means. I could then change my career and/or move abroad. The pressure to work as hard and earn a decent wage would be lifted. Using the calculator, I could potentially pay off the mortgage by April 2020 (I turn 50) if I overpay by £499/month and use about £10-15K of savings to pay off remainding balance. This cuts the term by 12 years. My aim is to maintain a savings pot of £10,000 until April 2012 and increase this slowly to £15,000 by 2020.

I’ll list my target plan. I felt it was best to break it down to maintain motivation. This will be achieved by overpaying by £499 each month.

• By Feb 2010: Balance <£150,000 ACHIEVED :j:j:j
• By Aug 2010: Balance <£145,000ACHIEVED :j:j:j
• By Jan 2011: Balance <£140,000 ACHIEVED :j:j:j
• By July 2011: Balance <£135,000 ACHIEVED :j:j:j
  
• By Dec 2011: Balance <£130,000ACHIEVED :j:j:j
• By April 2012: Balance <£135,000 (set in 2009 as a realistic target). Switch mortgage deal as 5yr fixed period is up and possibly pay off more with savings I may have accumulated above £10,000. Plan will be reviewed at this stage.
• Revised for April 2012: <£127,000
  
• By July 2012 Balance <125,000
  
• By Dec 2012; Balance <120,000
  
• By July 2014:Balance <£100,000
• By May 2016:Balance<£75,000
• By Feb 2018: Balance <£50,000
• By April 2020:Balance <15,000 + and pay off rest with savings (approx )15,000.

Overpayment since March 2009 £3493
[STRIKE]
02/10/09 Balance £153517.28
02/10/09Savings: £10,834.78
02/10/09 0% Interest Credit Card debt: £1151.23[/STRIKE]

13/05/10 Mortgage balance -£146377.04
13/05/10 Savings: Approx £8000
13/05/10 0% Interest Credit card debt: £1500


04/08/10 Mortgage balance -£143633.06
04/08/10 ISA Savings: Approx £7100
04/08/10 Savings for Credit Card pot Approx £1600
04/08/10 0% Interest Credit card debt: £2700

05/04/11 Mortgage balance -£136621.27
05/04/11 ISA Savings: Approx £7100
05/04/11 0% Credit Card Debt: 0

04/07/11 Mortgage balance -£133899.40
04/07/11 ISA Savings: Approx £7500
04/07/11 0% Credit Card Debt: 0
04/07/11 Monthly running debt (0% interest): £500

Thanks to you all for your motivation and Good luck with your mortgage-free plans
Charlie :j

TOPAZ_2

Good luck with your plans - I look forward to reading about your progress - this should keep me motivated as well
Thanks
Topaz

alflavor

good luck also, similar sized mortgage and goals as to us!

dimbo61

Hi Charlie
I also have the aim of being mortgage free by the age of 50 which for me is 2 years 3 months.
I have a fixed ( for 5 years) offset mortgage with a little over 1 year left.
If you are overpaying by £500 each and every month then you could consider reducing the term either at the end of the fix or sooner if you want.
Use "whatsthecost" to work out how much extra each month it would cost you to reduce the term by 1/2/3/4/5 years.
I will savve by self £50,000 in interest by reducing the term by 12 years!!!
GOOD LUCK

setmefree2

and Good Luck

uzubairu

Good luck and welcome aboard.

You do have to find the balance, because 11 years with no treats will be very hard to sustain.
Possibly look at cheap ways to have some fun so that it doesn't feel like you are missing out.

Charlie_H

Thank you for your good luck wishes. Its been sometime since I've provided an update. Here goes:

Since I last wrote in Oct 2009, I went on holiday to Goa and bought half a car (total £1050), which I share, all costs with OH. Several things have imploded in my new build flat that I have to shell out for. In November I discovered a damp patch in ensuite bathroom. This was caused by a leaking cistern (concealed) coupled with a jammed push button mechanism. Therefore bought a new cistern last month and had it fitted (£180 total). A week after discovering the leak, my electrics cut out due to a fused faulty circuit. £250 to temporarily put right but have been advised to replace all 12 halogen light fittings that are currently a “fire risk”. This will cost £800. Shocking installation electrical work—the plastic part of the fittings had melted away and the metal had all buckled with the heat. Still need to get this job done. This is all the risk with New builds as the workmanship is often substandard. Lets just say that I've been cross with my home since these mishaps.

Now back to paying off the mortgage. Today, I reached Target 1 which is to get my balance <150k in Feb2010. I've overpaid £499 for 12 successive months and never thought I'd do it. Reading many of the posts on this thread really kept me going and truly inspired me especially when things got annoying with the flat. Thank you again.

YES Target 1 ACHIEVED. :rotfl::T

Overpayment since March 2009-£5988

03.02.10 Mortgage Balance: £148753.06
03.02.10 Savings: £8948
03.02.10 Credit Card debts at 0% interest-£1011.23

So what cost-savings have helped me during the past twelve months:

Moved my current account twice and made £150. Firstly moved to CO-OP for £50 from NHS Discounts and then to Alliance and Leicester for £100. The switching DD was a little stressful but it all went well. Also had to pester the COOP for the £50.

I hardly eat out, I'm a very fussy eater anyway and prefer to cook. OH is even worse as has a ton of allergies. I've found cooking my own lunches helps save spending a small fortune on sandwiches/ready meals especially as I work in Central London (£5-7 day). My lunches have now become the envy of the office. I tend to prepare a large cooked lunch that can be microwaved.


Don't drink and neither does OH. If we go out clubbing-we'll pay our entry fee and then maybe a water or orange juice. We sometimes buy drinks for friends but the majority of the time stay out of that dynamic as it's very expensive. I've been T-total for over 2 years and have saved an absolute fortune. I used to spend £60-80 on a night out in London including cab but now drive. This also means we can take pals home too.

For clothes--I buy few expensive items for long-term use. Not really a clothes junkie but do like to dress well for social events. I resent paying a lot of money for work clothes so keep this expense to a minimum. Tend to pick up work clothes is sales and recently picked up a stylish shirt from a charity shop for £4. The shirt is worth at least £40 and I bought it from in Pimlico. If one doesn't mind second hand clothes--hit the charity shops in the wealthy areas as one can pick up some real gems. This shirt is my favorite as it has a lot of fine detail, nice buttons and gorgeous pleats.

I'm currently working on getting my employment contract transferred to permanent and hopefully a promotion later in the year. This may prove difficult at the moment as budgets are being cut in the public sector but I'm working on it.

DVDs-Fopp and Amazon

Gymn--mainly free introductory deals and paid per visit (£10 gymn, £15 yoga) but have now joined a gymn properly as need to be consistent (£44/month). Spent the past 12 months fathing about finding a place that has almost everything and just got fed up. This new place has great yoga classes. swimming pool, sauna and gymn facilities. It is clean and also has an ab exercise machine that seems to be a rarity in UK gymns. If go twice (a 3rd time would be a bonus) a week this is more than enough value for money (£5.5/visit).

Thanks again for all the motivation from your posts
Charlie H:j

Queen-Bee_2

Congratulations on what you've achieved so far. Shocked about all the probelms with your flat though - who on earth was the developer?!

Love the fact you like quality clothes, but are prepared to go second hand. I feel the same way!!

If you're OK with the £499 overpayment every month, have you thought about shortening your mortgage term? I've done this (also with Nationwide) and it has enabled me to greatly increase my monthly payment - they didn't charge me for the alteration and I can always lengthen it again if I need to.

In this way you can maximise the use of your money - you won't be able to match 5.18% with a return on your savings - and can still draw down on your overpayment reserve if you need to (you can still make overpayments over and above the new monthly payment).

Anyway, good luck and look forward yo your new progress update,
QB

poppyoscar_3

If your home is new build is it not covered by NHBC for some of these mishaps? PO xx

dimbo61

NHBC will only cover ( after first 12 months !) for major build problems
You could have claimed under you buildings insurance for the leak BUT after excess it might well have cost you more to claim ( been there done that)
Check out LED lights to replace halogen lamps
Well done on the OP,s

setmefree2

:T:T:T:T:T well done on your achievements so far :T