MF - Getting started

Nikfs

Hi there

I will give you a little background about my situation ... & have a few areas where some help / advice would be welcomed!

I have spent the last couple of years trying to take control of our finances, which were in a right old mess to be quite honest - after a few bad decisions / wrong turns & just not paying attention. We have put the past behind us now & I have even managed to convert hubby froms someone who doesnt care so long as the hole in the wall gives him money, to someone who let me take charge ... to someone who now actually takes an interest, checks his bank balance (or at least allows me to!) & has even recently mentioned the until-recently-banned-in-our-house word: "planning" (i nearly fainted!). It now feels like after a long time (11 years nearly!) we are on the same page & heading in the same direction. So we have put the past behind us (cant change that!) and are just focusing on doing better in the future.

We are now in this situation:

1 loan with 4.5years left on it. £372 / month. If we let it run to term we get £2,500 back at the end - so no point in repaying early.

1 car loan - which is covered by a car allowance so not an issue (like having a company car effectively)

Mortgage of £164,000 with 28 years left

Into the overdraft by about £600

No savings!


In the next 6 months we will be moving & upping the mortgage to £245,000 - this will be our "forever house" - no need / desire ever to move

Over the next 5 years we will reduce childcare costs, increase salaries / bonuses (hopefully!), pay off the loan - it is all looking up!!!

We have committed to the fact (both!!!) that when an outgoing goes down - the money (or most of it) will go into the mortgage & when an incoming goes up - the majority of the increase will go into the mortgage. The new mortgage term will be 30 years, but I am keen to see if we can actually get it paid off in 15 .... I think it is doable if we really do put all the extra into it!


HOWEVER .... ! ... Initially it will be pretty tight to increase the mortgage - we can do it but will need to make some cut-backs in order to not feel the pinch too much. The mortgage will be going up by £250 / month

At the moment we pay ourselves "pocket money" and have agreed to reduce this amount, I am already pretty good with chasing best deals on services etc & we really dont spend a lot (anything) on material goods. Our problem areas are:

- Fuel - but the move will take us much nearer to a lot of friends so there will be less long journeys

- I buy a few clothes - but this comes from my pocket money - I have already cut down & am building up a little pot of personal savings

- Food shopping - we spend a FORTUNE & I dont know how. We mainly cook from scratch, dont have "Luxuries", I do buy some particular kid stuff but only yoghourts, fruit pots & fruit bars - nothing crazy!! The kids eat what we do. I have tried down-shifting a brand ... we still seem to spend loads. My grocery & toiletry / household bill comes to about £600 / month - for a family of 4 (2 under 4) - is that normal?? It seems enormous to me but I'm unsure how to reduce it. Ideally I'd like to get it down by at least £100 / month. One problem is that I do a weekly shop, but then someone pops to the co-op a couple of days later & its another £30 gone. I try to meal plan but end up straying - however very little food is thrown out, I freeze spare portions. I cook in advance & freeze stuff for the kids for lunches at nursery etc. Also hubby is away a lot, so 3 nights a week he isnt even eating ..... mmm. When you put it down in black & white it certainly does seem crazy!!! I think I need to write down all my spending to track it!

- Days out with the kids - I try to take picnics but hubby does like to splash out on lunch (are you getting to know us ... ? - yes, we love our food!!!)

Anyhow, any tips greatly appreciated!

I love this site - its helped a lot in the last couple of years & this new thread will hopefully be a really help!

N

museumworker

Hello and welcome! I'm sure they'll be some more experience MFW's along in a little while to give more seasoned advice.

My comments would be that your shopping bill does seem quite high - we do around £250-300 pm for me, OH and 1 DD (7 yrs), that includes packed lunches, toiletries, and booze. There are some who can do it on a lot lot less - take a look at the Old School board, and maybe try the Grocery challenge, even if you knocked it down to £450 a month you'd be saving £150! Meal planning is the way forward.... and yes, lunches out are pricey, so try and make a picnic before your OH can do anything about it!

In terms of clothing, how about trying the Crazy Dress challenge - £100 on clothes for a year. I have been doing it for a year now, and it is brilliant for focusing the mind, they are a friendly bunch there too

We have 'pocket money' too for discretionary spends, helps maintain a bit of autonomy.

Good luck and keep us posted!

RenovationMan

You and your OH must have a huge income between you to afford to increase your mortgage to £245K and still have those outstanding loans and finance. Are you sure you dont want to settle into your new frugal lifestyle and pay off those debts before you increase your mortgage by so much?

I'm hardly one to talk about large mortgages , but it's our only financial commitment and we've had years of comfortably living within our means and overpayment experiance behind us. I just worry that if you've struggled to keep a rein on your finances in the past, that a further increase in your debt isnt going to help matters. Saying you're going to live within your means and actually doing it, are two different things! Sorry for the lecture

Nikfs

Gosh, £250-£300 / mth on supermarket shop - that would def be a challenge!!! I guess I'm up for it! Eeek!

Renovation man - no point in paying off our loan as I said, coz if we do we dont get back the £2,500 at the end - this is a return of some of the interest, which you only get if you dont settle early. I've done the sums & it makes sense to leave it. The car loan is covered by hubby's work - it is in effect a company car.

OUr motgage is going up - yes, but the interest rate is coming down - so the difference in monthly outlay will be a max of £250 / month - worthwhile for an "ever-after" move - no more solicitors fees / stamp duties etc. Just means we need to pull the horns in for a bit.

Thanks for the lecture - it is all useful advice! (and the kind of lecture I normally give to friends) Stuggling in the past - was due to naivity / stupidity / lack of communication / lack of understanding / OH & I wanting different things (the old spend v save) - we are now focused & know what we want & we have had some VERY difficult times behind us. We have learnt - & are now moving on - both in the same direction.

I just want to make sure our money is being wisely spent - hence the need for tips to budget / plan etc! However, I have just challenged an insurance renewal hike, got it down to almost half & am going to get £80 cashback on quidco too! Not a bad start!

thanks all for your thoughts - keep them coming!

Sunnyday

Hi Nikfs :wave:

welcome!

I do the grocery challenge over on old style each month and it does help hugely with the grocery outgoings, Augusts challenge will be starting soon (might have actually - not checked since last night) so have a read and/or join in. You will probably surprise yourself.

There are lots of recipes at the beginning of the GC threads which are low cost and very useful too. At the moment i`m feeding myself and DH 3 meals per day on £160 per month and allowing £60 for dog and cat food as we have two dogs which are big eaters. It has been as low as £160 for all of us animals included but with the prices creeping up and the hounds diet being changed things have been pushed up a bit. I`ll be able to get this down a bit soon i`m sure.

Hope that this helps. There is lots of advice over on old style re cutting household spend etc and this is where i got a lot of my inspiration from and have now turned the cost cutting over to the mortgage too

Good luck! I`m sure that you will enjoy all the little challenges that this will bring.

SD

RenovationMan

Sorry, I thought the loans/finance were a legacy of the time when your finances were in a bit of a mess. Good luck with your 'forever' house. We're still delighted with ours and we've been there 2 months now.

SmlSave

Welcome to MFW Nikfs

yay to having your OH on board!

1 loan with 4.5years left on it. £372 / month. If we let it run to term we get £2,500 back at the end - so no point in repaying early.

Can I be cheeky and ask how much the interest is on this? Just in case it equals £2,501, meaning you could save yourself £1 lol

It's really nice to hear you've found your dream home Did you just 'know' when you saw it?

I have to agree that £600p/m on grocerys is a scary amount to me. Def get over to the OS board and take a look, I found them to be really nice and I got some great ideas from there. Also have a look at this: http://www.cheap-family-recipes.org.uk/. Our weezle created this site to help people cut their food bills down and she's even got me making bread! (by hand too)

Don't try to cut your grocey bill from £600 to £400 straight away though! Take it slowly by cutting down £20 a time so you get used to it. I'm no angel though!

dimbo61

All I can say is " no savings" so before you start to overpay please build up that emergency pot.
If you are getting a new mortgage consider OFFSET and build up the savings in the offset pot.
You need at least 3/6 months of income

Nikfs

I have found a great way (for me) to focus the mind on spending / not spending: for every £1 borrowed on my mortgage, I currently pay back £2.87 ... so, if I am about to spend £10, that is effectively £28.70 .... mmm, not so easy to spend that amount on a whim! ... works for me! I will look into the offset mortgage thing - thanks!

SmlSave - The interest on the loan was all loaded to the beginning & has been paid - so no way out there!

Renovation Man - the one loan is indeed a legacy - but everything is under control now & we know where we are not going back to ... & we are now fully paid up (ahem, pardon the pun!) members of "debt & mortgage-free wannabe's"

Re dream house - well, we had a LOT of practical criteria that needed to be met re the house & found 2 that matched most boxes ... one left us cold (tho imminently practical!) & the other ... well, I have warned OH that I will dance & skip every morning when I wake up!!! Perfect!!!

Nikfs

I mean - I am parrtial to the odd "posh coffee" - especially as I drive a lot. However it doesnt seem quite so tasty at effectively £7 a go ... even my beloved Maltesers seem a little pricey at nearly £1.50 a pack .... hmm ... definitely food for thought!

MFW_DannyG

Nikfs wrote: »

even my beloved Maltesers seem a little pricey at nearly £1.50 a pack .... hmm ... definitely food for thought!

now fully paid up (ahem, pardon the pun!) members of "debt & mortgage-free wannabe's"

Your Just one pun after another! :rotfl:
Good luck with your MFW journey, & well done on having the OH's support, thats half the trouble sometimes! :money:
R.e the £600 a month grocery bill, you must all be about 40 stone eating that much food!! :EasterBun
Only kiddin',but seriously that is an easy place to save at least £100 a month to go straight on OP's/Savings!