Five years for Spigs to be Mortgage Free!

icontinuetodream

Happy holidays spigs...:D:D:D

Spiggle

Thank you very much icontinuetodream! :beer: Same to you and yours, enjoy!

If anyone else pops in, I'd like to also wish you the very best holiday, have a great one.

See you later,
Spigs

Spiggle

Well end of the year which despite hiccups (not many financial ) has gone rather well in terms of OPing and saving to offset. The fact I could in theory clear the second mortgage is a great feeling.

So yesterday I spent in spreadsheet heaven (or hell as you like it! ) working out the total household budget for 2012. Using the actual recorded spends from 2011 I have created five new piggy bank accounts with IF and increased all bar one of the monthly amounts going into each jar.

I know that IF is not the best interest rate for our piggy banks but it is the only savings account I've found that offers the ability to have virtual 'jars'. Having the money go out and then allocated to specific expenditure is a boon. Yes, I could do this by keeping a running account on a spreadsheet but I do like an easier life if at all possible.

Still gobsmacked at our expenditure on clothes this year (£977.30 spend against a £420 budget :eek:) which has meant our monthly saving for it has jumped from £35 to £80 in one feld swoop! I hope we won't spend this in 2012 as a lot of that was on boots, shoes, coats, fleeces etc for OH who is not a small guy and has to have stuff from big people stores like w*lkt*ll (who are brilliant I have to say). The stuff we've bought should last him well into 2012 though will need some new jeans soon.

I think I mentioned before that I blew the car budget this year but I shouldn't need new tyres or brake discs for a good long time. Still increased the saving per month from £75 to £90 though. As well as maintenance this piggy bank covers car tax, car insurance and household insurance.

The positive reductions in the overall budget were in petrol where I underspent by just over £500 this year and so reduced the expected spend for 2012 to £1308. The other reduction was the Birthdays piggy bank where I have been saving £15 per month but still have £155 in there so have reduced this to £5 per month from January. :cool:

The new piggy banks are for bicycle repairs (£10), dry cleaning (£15), garden (£17), wild bird food (don't ask about the size of that! _pale_) and vets (£12). The Christmas budget was over spent by £96.94 so have increased our monthly saving for that to £39. The ones to be embarrassed about are the £70 per month each to entertainment and tobacco. :embarasse:shocked::sad::undecided:naughty:

I've still allowed us a budget of £100 across the year for miscellaneous though the five new jars cover most of what got put in there in 2011.

If I've done my sums correctly :think: (I did use Martin's superb Budget Planner as the first step) We should still be on target to OP the mortgage by £8,400 over the year. However, £7,200 of that goes into the regular savings account to offset rather than to the mortgage company.

On the gracery challenge front, I've given us the same annual grocery budget for the year of £2,910. This equates to £240 for each of 10 months, £250 in August and £260 in December. The great news is that we underspent in 2011 by a humungous £306.95!!! :dance:_party_:dance:

I wish I could say that I had that £306 in a savings fund but that will have gone on the overspent budget lines for 2011.

The other positive for this year is that due to changing to offset regular savings in March and despite a couple of reductions in a couple of months due to unforeseen expenditure, we beat our OP target considerably. We started in January with a target of £5,700 and managed a total of offset and OP of £7,964 by the year end! :dance::j_party_

OH asked last night but the pocket money of £15 each per week is NOT getting raised! :rotfl:

So, we're all set for 2012 and it's a very satisfying feeling I must say.

If you've popped by to have a read I'd like to take this opportunity to wish you and yours the very best that the new year can offer. :money: Here's to a moneysaving 2012! :beer:

See you on the other side,
Spigs

icontinuetodream

Happy new year spigs....and good luck on your 2012 mission!!

pavlovs_dog

its rather scary when you break spending down into categories and track every penny isn't it? A few quid here and there seems like nothing at the time. I really need to cut back on clothing spends, my wardrobe is overflowing.

Spiggle

Thanks icontinuetodream and good luck to you too.

Very scary pavlov's_dog! The clothing really surprised me as you can see in the difference between what I estimated and the actual spend. I'm going to stay away from online clothing sales (M&S/N*xt/Debs/etc) this year as a lot of the spend on my clothes was for stuff I wouldn't have bought at full price and I haven't been happy with much of it.

Best value was my last purchase, a load of tops and jumpers from Matalan who I haven't bought from before. I bought a size up on everything and I'm so chuffed with the tops particularly.

Sorry rambling with hangover ...

Take care and thanks for dropping by,
Spigs

stedwell

I know what you mean about the online sales Spigs.
I have bought clothes this year because they were reduced and either they didn't really fit properly or they weren't really me. I think I will be more selective this year as I would rather have a few really wearable pieces than a lot of unworn clothes.
Happy New year. :T

Spiggle

Such sensible words stedwell, that's exactly what I did and what I would rather too!

Happy New Year to you and yours,
Spigs

Spiggle

Well hello again, :wave:

A very bleary eyed Spigs here. :coffee: The following ramble may be very detailed and send anyone reading it to sleep but I have to get it down for my heads sake, you have been warned this is a long contemplation.

Have been having sleepless nights recently for both positive and negative reasons. The positive is that in the next few weeks we will make our final payments into the regular saver for this period. A month later on maturity I'll have a sizeable chunk of money that will far outweigh the remaining balance on the small second mortgage. So excitement feeds not sleeping as I have never in my life before saved so much money in a 12 month period! :dance:

On the negative side my quandry regarding paying off the outstanding small mortgage or putting the lump into a savings account has increased enormously to proportions that will not allow me to sleep! :doh: This cannot go on. :shhh:

So, I probably shouldn't have gone to work with so little sleep but had to and it did have its upside. I have a dear colleague, who I also count as a good friend, who is a wizard with finance, completely understands risk and knows about my grand plan to be MFW by 55. Before I went to work I decided I would lay out all the variables and ask them what they would do. I know the forum does this too but I needed to talk it through person to person (no hope of doing that with OH much too detailed! :rotfl:).

I should add at this point that at around 3 am this morning I was working through and modelling all the options for saving the lump as opposed to paying off the balance. :wall: What I finally gave up on was trying to see the difference it made to the main mortgage free date if I didn't pay it off and therefore didn't have the extra £100 per month to throw at it as of March 2012 which was my amended model once I started offsetting saving rather than OPing direct. Can you see why I can't sleep?!?:rotfl:

Anyway, on the hard cash side over two years (working on a 2 yr fixed ISA as the hold for the lump and then paying off balance March 2014) I would pay out about £102 in interest on the loan and assuming only £5k invested gain £370 in interest on the savings. Net gain over two years then of £268. (I'm not sure where the difference (£85.57) in interest saved according to the calculator fits in because according to that clearing now means saving £514.41 over term and clearing March 2014 means saving £428.84 over the term.) Working only on interest out over interest in on only the second mortgage means I'll gain £11.16 per month at the end of the two year period.

On the other side, I will not have the extra £100 per month to send to the main mortgage. As I said above that was where my poor tired eyes gave up at about 4.15am (didn't mean the brain turned off when I got back into bed though sadly).

And this is where the psychology comes in I'm afraid. I have continued to OP albeit small amounts to both mortgages even though it has at times stretched us maybe a little too far. But seeing the balance reducing is a huge psychological driver for me. I have had the sketch of clearing the small mortgage, putting the monthly £100 to the main mortgage, then adding the monthly CC £95 (0%) come October and then the 'forgotten about' monthly £101 (0%) come November which is how the dream of being MF by my 55th birthday is achieved.

So upshot is went through this in fine detail with my friend who asked:
How much value I put on having only the one mortgage to pay? Answer: Unquantifiable but enormous psychological value.
Was it worth more than approximate £11.16 per month achievable after two years? Answer: I believe so.
Was I confident that nothing would come up during the two years that would require me to use the funds saved? Answer: Definitely not (after the year I had in 2011??!!??!!).
Was I continuing with another regular saver after this period matures? Answer: Yes, absolutely to the max I can afford.

My plan, based on talking this through, considering the options and evaluating the answers above, is that I will pay off the small mortgage in March 2012. In a true MS sense the wrong way to go but for me personally and psychologically this is absolutely the right way to go. I will open another reg saver for me and one for OH in March after the current ones mature and max them as much as I can. In March 2013 when they mature I won't have the quandry as I will still have two and a half years before the deadline and I won't feel it necessary to pay it off as I'll be seeing a continually and substantially reducing capital balance anyway. Who knows, I may even get better fixed rates then too!

So please don't criticise, I know I'm going the wrong way about this but I have to get rid for the sake of my sanity and sleep patterns.

If you have got this far and are still awake you deserve a medal!!!:T

Thanks for visiting, reading and staying awake.

All the best,
Spigs

Spiggle

Hello again,

Sorry for the long diatribe yesterday, I was so tired but did I sleep last night? Like a baby!!!

Realised I didn't give an update on the mortgage so here it is. The MOS were lower in January. That was planned as I was going to buy a new computer but the Techie board guys helped me through chucking a load of carp off my machine and it works much faster and more quietly now so it's staying for a while.

I did though spend quite a bit on the essential clothes for OH and a couple of needed things for me so the MOS was only £200 in total. As of today then the picture is this:

Mortgage one - £39,189.14
Mortgage two - £ 4,900.12.
Mortage Total - £44,089.76

Credit Card - £706.69

Total Debt Outstanding £44,796.45.

We have in our MOS £6,000 leaving us with a net debt of £38,089.76.

We'll be putting £600 into MOS in February and then in March will pay off the remainder of the small mortgage. OH and I desparately need a holiday and will be booking something for a week in the sun during the Easter holidays. It will have to be paid for out of balance in MOS but should still have something to put away as a starter towards the MOS this year.

So all looking good.

See you all later,
Spigs