Getting started but feeling daunted!

Dragonrider

Hi,

I have just joined the site, but have been reading through posts for the last couple of weeks and they have really inspired me to try my hardest!

I do feel a bit like I don't know where to start though - I haven't seen many other posters with this amount of mortgage and it seems really unachievable to bring it down significantly.

We did manage to make considerable overpayments last year, but that was because I, with my daughter and dog, moved in with my in-laws for 16 months while my husband was in Afghanistan, so we were able to rent the house out and overpay a lot.

However, we have now had daughter number 2, and moved back into the house ourselves, and although I really want to continue to overpay I'm not sure how much more I can cut our budget.

We're currently on a 5 year tracker mortgage at 2.49% above the base rate, but it is capped, so that we know that the highest it can go over the next 5 years is 5.99%. We don't have a lot of spare cash, so any that I can save I am putting into a separate mortgage account so that as the monthly payments go up we already have a cushion. Does this sound sensible or should I be doing something else?

Any suggestions gratefully received, and I hope writing this thread will keep up the momentum to save as much as possible!

Thanks.

McKneff

It does sound sensible, in some ways too sensible, you must have some sort of nice life with your family so dont be so desperate to
over pay rather than spending it on taking the bairns on a nice expensive day out now and again.

Good luck and congratulations on your new baby.
Annie

Lottebear

Is your Husband in the Forces? Could you move to married quarters and rent your house out again?

Lois_E

Hello and welcome Dragonrider. :wave:

You sound as though you are approaching this with lots of forethought, which is great. The first thing to do is to find out exactly what the terms of your mortgage are. With some mortgages, you can make OPs, and then borrow them back again later, or take payment holidays up to the amount that you've OP'd. If that's the case with yours, then you'd be better off putting your spare cash straight into your mortgage, unless you can get better than 2.99% in an ISA or something. If your mortgage won't let you do that, then you've already got the best strategy of saving to make sure you'll have something to fall back on if rates go up, so you won't get into difficulty with your payments.

McKneff is right, though. It's important to have a life too. You've got a daughter, a new baby, and a husband who's come safely back from Afghanistan, and it's important to enjoy your family time together now that you can. So do pick up tips on here, but don't get too obsessed with the whole MFW thing - there's more to life than houses and money, after all. And remember that you've achieved a huge amount getting your mortgage down by more than £75k in less than 4 years. Circumstances may have changed so that you've got to slow down your OPs, but that's still a huge amount shaved off your original debt. :T

So try not to feel too daunted. Even small OPs do make a difference, and it all adds up as they compound. Your savings in your separate mortgage account are already growing not just because you're adding to them, but because they're earning compound interest. So do shop around for the best rates for those savings, and make sure you ditch and switch whenever necessary to get the best deals.

You'll find lots of friendly supportive people on here, and if you want ideas for cheap meals or household hints, try the Old Style board.

Good luck!

Dragonrider

No, he left in November. Has come out to a much worse paid job though, so he sometimes wishes he was back in!
I'm glad he's home... :j

Dragonrider

It's so nice to have replies so quickly!

It's going to be good to have support from here, even if we can't overpay much. You never know, we might win the lottery?! (Have to buy a ticket first )

ermine

we might win the lottery?! (Have to buy a ticket first )

Ah, the good old ID10T tax Don't do it - well if you must buy just one ticket. That improves your odds from nil to almost nil, which gives you the best bang for your buck.

Seriously, hanging your hopes on empty dreams like that is so disempowering. All those tickets after the first are a drain, you'd be so much better off taking a punt on the stock market...

The main thing is you are thinking about it and examining you options. It's far better to direct your life choices that trust to Lady Luck

katsu

Hi Dragonrider.

Have a look at Martin's articles and check if you can make any savings from them - these are "painless savings" as you are still buying stuff you were buying before. So, for example:

* check if you are on the best gas and electric tariff
* switch to energy saving bulbs, don't leave things on standby etc
* use comparison and cashback sites at renewal time for your insurances
* if you have breakdown cover with AA or RAC either use quidco or top cashback to switch to the other provider (i.e. aa one year, RAC the next) if you want roadside only cover or, if you want the full package because you travel very far often, then look at Autonational, Autoaid etc.
* look at the old style forum for cheap meal ideas - easy tasty recipes there that will reduce your spending
* Look at cashback credit cards if you can clear the balance every month - or 0% deals to transfer to if you have any outstanding credit.
* consider joining survey sites to earn vouchers towards christmas gifts

Hope some of this helps give you ideas.

GeorgieFTB

Dragonrider wrote: »

It's so nice to have replies so quickly!

It's going to be good to have support from here, even if we can't overpay much. You never know, we might win the lottery?! (Have to buy a ticket first )

Yeah, we're a weird lot round here, obsessed with clearing our mortgage but trying to remember to have a life at the same time.

I have so far op'd a whole fiver :j last of the big spenders me!

Welcome and good luck

Gx

katsu

That £5 will save you more in interest over the years Georgie and just think like Tesco - every little helps

Dragonrider

Thanks everyone!

I have signed up to a couple of survey sites, as I want to buy hubby a new mobile for his birthday (his is rubbish and keeps crashing), and I also signed up to topcashback this weekend.

To give you a bit more detail - the only way I have found that works for me of keeping track of money is to have a few parallel accounts with the same provider that I can see all in one place. I know this means I don't get the best rates, but if I consolidate then I lose track easily. My husband is very much a spontaneous gadgetophile who spends if he has, and I have got used to holding the purse strings as he has been away so much.

One of these accounts is for the kids - any money I get given for them and their child benefit gets paid into this account, so I never feel guilty about buying them things or going out for days out, as this doesn't impact on our weekly budget - I definitely agree it's important to have fun, especially when they're little!

So, we have:

Childcare account - £1000 (I go back to work PT in July, so this is to get us going, and we can both get childcare vouchers, which helps)

Bills - £223.40 (I pay £500 in each month which easily covers bills and leaves a bit left over for unexpected expenses on the car etc)

Child account £1604.03 (this goes up by £120 per month child benefit)

Mortgage account £2251.00 (I pay in £1500 each month, mortgage payment is £1149.90)

Cash e-ISA x2 £2000 in each

Current account for day to day spending £245 at the moment to last us until the end of the month.

This way, I only take out my current account card in my wallet and I know that the rest of the money is already separated out into what it is needed for.

Suggestions gratefully received!

Thanks