Sepa seeks freedom

Sepa74

I bought my little flat in South London in May 2007. Although I bought pretty much at the top of the market, it was before the Credit Crunch, so I was fortunate enough to get an off-set mortgage tracking the base rate + 0.49% through N&P, with a repayment period of 34 years.

Although I'm always very careful with my money, I've not set myself any goals for paying off the mortgage early, I've just always let it look after itself.

But maybe it's because it's the new year, maybe because my siblings are starting to have kids (sadly, the opportunity for my own kids is slim, and getting slimmer as I turn 37 next Saturday!) but I feel the urge to set myself some goals. I love reading the MSF forums - I find them very inspiring, although the DFW thread can also be depressing at times, so I thought I'd join the gang.

But first I need to do some research to decide what goal to set myself, so I'll be back later to post something a bit more concrete.

Sepa74

So... a little history.

I put aside £1200 pcm into my offset account to cover all flat expenses, including the mortgage. The idea is that the money in the offset will gradually build up and up and will allow me to pay off the mortgage a lot quicker. I am a contractor, so it's important that my savings are kept in a liquid form so that I have a plump cushion of funds to rely on should I be out of work for a long period of time. The offset is working really well from that point of view.

I borrowed £150K in May 2007.

Date - Amount owed / amount saved through offsetting / time to pay off

Apr 2008 - £148,605.42 / 538.96 / 32yrs 10mths
Apr 2009 - £146,234.50 / 767.37 / 32yrs
Apr 2010 - £139,119 / 1238.68 / 29yrs 6mth
Oct 2010 - £139,447.49 / 1583.47 / 29yrs 7 mths

I extended my lease in 2009, which cost a little over £5K. I consider it a good investment because my lease was 82 years and to renew it once it was under 80 years means I would have had to pay the freeholder half the marriage value. The lease is now over 200 years, which should make the flat that little easier to sell.

I have also just purchased a garage, which cost just under 5K. As well as adding value to the flat (at least as much as it cost, if not more), it will give me lots of storage space which will make life a bit easier.

To think, I lived in one room for 5 years before moving into this flat! Doesn't 'junk expand to fill each drawer'!

Sepa74

So... the target! It will be to get the mortgage down to £125K by the end of this financial year.

To do this - I will NOT make any more wise investments!!!!!

Although my head knows that they were good investments, my previous post has made me realise that had I not renewed the lease and bought the garage, I would already be below the £130K mark. No wonder I feel frustrated that the amount hasn't gone down quick enough!

I will start tracking any money I save on purchases (eg bogoff, 2 for 1 etc) and put half against the mortgage... that way I have an incentive to focus on being careful with my money too

I can't imagine what it will be like to see that I only owe £125K on the mortgage... I can't wait to see the figure start plummeting!

Tesco_points_addict

I just wanted to pop in and say hi, welcome and congratulations!

Congratulations on thinking of the future, you will be amazed how quickly the extra pennies add up.

This place is great, the peeps are lovely (if a bit bossy at times:rotfl:)

Welcome xxxxx

TPA

Tesco_points_addict

Sorry its me again...stalker alert:o

Just wanted to say love your Avitar (or what ever they are called!) Is he/she yours? If so I REALLY hope it is better behaved than mine!!

TPAx

Sorry to go off topic:o
PS watch out for GG she will have you signed up to numerous spread sheets before you know whats hit you.

Sepa74

I've just been reading some other diaries. I'm starting to realise I need to be in for the long haul, so I hope I make it! I particularly enjoyed Zaddy's diary, it's so detailed I really feel I have got to know her a bit.

My family is very small - just me and two !!!!! cats. Mika, my black cat, has a bad habit of p**ing on the kitchen floor, just in front of the litter tray! My sister-in-law suggested that it might be because of a UTI, so she got taken to the vet twice in December... she is a VERY expensive !!!!! cat!... and she did indeed have UTI. She is still p**ing on the floor, so she probably should go back to the vet, but I'm dreading it as it could easily be another £100 (on top of the £250 I spent in Dec) and I wouldn't be surprised if she's just doing it out of habit. She seems perfectly happy and healthy, although she is very overweight!

Her motto is 'when in doubt, eat'!

Allie is her sister, and is boss cat in the family. She doesn't over-eat, is a bit brighter than Mika, but isn't as communicative. She's a tortoiseshell.

I will have some major flat related expenses this year. I desperately need to renovate both the kitchen and bathroom. The kitchen is a particular challenge because it's an awkward shape and there is a false wall in front of an old chimney. It's very difficult to know whether to leave the wall where it is, or remove it and try and make something of the chimney.

Tiles have recently started falling off the bathroom walls, so it's also in a very sad case. However, the good news is that I should be able to pay for both the bathroom and the kitchen out of my earnings, so I am hopeful they won't affect my goal of getting below £125K.

Sepa74

My finances are pretty complex because I contract / consult through a limited company. I really have no idea how much I earn because the company pays corporation tax, and then pays me dividends in a lump sum, and it's also VAT registered. These to things mean a big proportion of the money in my company's bank account must be tax, but I have no idea how much!!

Because a lot of my money comes to me as a lump sum, I pay myself a 'salary' every month. over the last 18 months or so, I've overspent that salary by around £1000, so I am in the crazy position of owing myself money!

When I look at what other people spend I pay myself a very reasonable amount, so I think my other target should be to get that £1000 down to nothing by the end of the year. The only thing is that I've been trying to do it for the last 9 months and failed dismally, and because I only owe myself, it's VERY tempting to just say 'forget it, don't let it happen again!'.

What do you guys think? Should I just clear the slate and start again, or should I try even harder to bring it down?

katsu

Hmmm, tricky to get my head around the £1k business so I think I'll stick to welcome to the MFW family :wave:

Lots of great tips around and if you've read DFW you know lots of them :rotfl:

Do you:

* use quidco/top cashback for shopping (plus nectar for amazon)
* use comparison sites and shop around for all insurances
* use martin's articles, tools like the shopbot, music shopbot etc

Look forward to watching your journey and sharing the long haul with you (we are on £130K to go on 25yrs).

Sepa74

One last post before I head to bed...

I wanted to tell you about something money saving and fun a group of us at work are doing - we've formed a lunch club.

There are 8 of us, and each day except Friday someone brings in lunch for the rest of the group. It means you only prepare lunch once a fortnight, each day you get something yummy and nutritious, and we're all saving money! I think we're all enjoying it, so hopefully we can stick it for the long term.

katsu

lunch club sounds an excellent idea, well done to you and your workmates.

katsu

Sepa, i posted some random ideas for one of our other MFWs - would any of these give you some more things you could try? http://forums.moneysavingexpert.com/showpost.php?p=39752362&postcount=7