Getting started but feeling daunted!

newgirly

Hello and good luck with your new mf journey, thats a whopper of a mortgage do you have a target end date ?

Dragonrider

Thanks newgirly,

I know! I haven't got a target at the moment as I'm not sure what job my husband will end up doing. If he takes a massive pay cut then we'll need every penny for day-to-day stuff. I'm trying to reduce our outgoings as much as possible, then once he's decided what he wants to be when he grows up (!) I'll plan for overpayments and try and come up with a challenging but possible target!

newgirly

Well any op's help don't they, personally I think how well you do with oping is 50% how much you earn and 50% how much you spend. For example the year before I started we paid £2k off the mortgage and this last year it was over £14k, plus we have thousands a year less coming in than we used to. My hobby is now moneysaving not spending. :money:

The mfw board has really changed our lives ( well dh doen'snt have a clue what I'm up to most of time!) but it has.

Aless

Dragonrider I have not read more than a few posts but I wanted to let you know that there are some of us with mortgages on the large side. When we took ours out in 2007 it was only slightly less than yours at the time. I also know what it feels like to think that small sums make no difference but you just need to put that feeling aside and do what you can do.

Dragonrider

OK, I have taken the plunge!

I have just made our first OP of £400, which is equivalent to overpaying £100 per month since we re-mortgaged in March. I have been paying £350 per month extra into the account which our mortgage DD comes out of, in order to build up a cushion as the rates go up (we are on a tracker). However, we have over £2800 in there now (I put a whole month's payment in when I opened the account so that we're one month ahead of ourselves), so therefore 1st overpayment made!

Thanks for your encouragement!!

silver_4444_uk

Hello Dragonrider,

My own plan with regards to tuition fees, is to keep overpaying a set amount, 25% of my monthly savings go to my mortgage and the remaining 75% goes into an investment / savings pot for the tuition fees.

My daughters are now 14 and 16 ( the eldest is hopefully going to Uni. next year ), so when tuition fees were sprung upon us, by the government, I admit that I was totally unprepared. I was still naively budgeting on tuition fees of approx 3-4k per year, with accommodation on the top. Also up until that point I had been concentrating solely on getting rid of the mortgage.

From that point and with discussions that I had with other posters on this board, I decided to still overpay the mortgage and at the same time save into a seperate savings / investment pot. The primary reason for the latter is that it does provide liquidity for whatever fees you or your children are going to face.

Do you have a flexible / offset mortgage, you may be able to overpay and withdraw overpayments as you wish ???

The thing that you are going to have to weigh up, if you are going to go down my path is your own attitude to risk regarding the certainty of mortgage overpayments ( but are the overpayments illiquid ?) versus the uncertainty of investment returns. It is a risk I am prepared to take.

Your daughters are much younger than mine so time is on your side.

Good luck.

Silver

cha97michelle

Hi

First time i have popped in and read your diary. I can relate to some of it. Your husband has a hard decision. When you are trained for a job and it isn't what you thought, you don't want to walk away from the time investment of training, but you know you are unhappy. It is hard. For me i am so lucky my mortgage is lower and we can afford for me to be at home with the kids without the guilt of reducing our income by half.

Reading the options, it sounded like 3 was best to me, but it is hard as an outsider to see it well. I see it is least secure, but it felt like he would be happy.

And the kids in uni, i have the same 18 months gap between mine so it would be two consecutive years of them going if they want to.

I can't afford to do a lot if i am honest, but i pay £20 per month into the child trust funds and also managed to fill them in the first couple of years each while i was on mat leave or working and got some salary. I will try and add to this too.

I also loan money out at Zopa. It currently is only about £300 i have managed to invest to now, but the money is tied up for 3-5 years at a rate set at the time someone borrows it from Zopa, and is mostly between 6.8 and 12%. The company lends £10 at a time to different people, and they pay it back monthly. As they pay it back, it is reinvested, so my amount is slowly increasing and i add to it when i can. I can have up to £25k in my name, and if i were to manage this i think i would then also set one up in my hubbies name. This is loosely thought about in my head as the long term future, ie. When we get to that level, we would have a monthly income from it which could be used for uni or for our retirement.

I wish i could do more, and maybe i will manage it when we are mortgage free, but there are not enough funds to go round.

If i have a few extra pounds come in i am not expecting it mainly goes off the mortgage but some goes here. I daren't send too much though in the current climate in case we need it for something essential.

Always something to think of.

I hope some of these ramblings are useful to you.

Dragonrider

Thanks, those are both good ideas. I have thought before about switching to an offset mortgage when our current deal runs out in 5 years time. It seems to have enabled people on here to be really flexible and to overpay with some sort of safety net.

Thanks cha97michelle - I will look into that website, it sounds like an interesting idea.

Hope everyone is having a good weekend!

Sepa74

I love my offset mortgage, but I am lucky that the interest rate premium was negligible because I took it out before the credit crunch. I think these days they are best if you have a lot of savings that you are struggling to invest at a decent rate. The brilliant thing about them is they are tax free, but you don't have to worry about not going over your ISA allowance!

Good luck with all the decisions you have to make

Dragonrider

Here's my SOA.

Statement of Affairs and Personal Balance Sheet
Monthly Income Details
Income from Employment (after tax). . . . . . . . . . . . . . . . . . . . . . . 3,648.00
Income from Self Employment (before tax). . . . . . . . . . . . . . . . . . . . 0.00
State Pension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Pension / Annuity Payout. . . . . . . . . . . . . . . . . . . . . . . . 0.00
Benefits (Inc. Child Benefit/Tax Credits & Income Support). . . . . . . . . . . 124.80
Income From Savings & Investments . . . . . . . . . . . . . . . . . . . . . . . 0.00
Gifts From Family / Friends . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Monthly Expense Details
In Your Home
Mobile Phone(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60.00
TV Licence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Internet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00
Home Phone. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.89
Cleaning Products/Cleaner . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Garden Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Household Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83.76
Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.17 I have just fixed these for a year, and once the insulation is in, I am hoping these are going to go down significantly
Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.81
Council Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198.00
Overdraft Cost. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Bank Account Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Home Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23.38
Mortgage/Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,149.90
Plumbing/Boiler Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mortgage Payment Protection . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Life Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19.64
Food and Household Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . 700.00
Drinks for Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Motoring & Public Transport
Petrol/Diesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130.00
Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.67
Car Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.42
Car Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45.92
Car Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.67 This is based on a full service plus change of cambelt this year, so hopefully this is artificially high
Rail/Bus/Taxi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Breakdown Cover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.42
Debt Repayments
Credit Card Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Hire Purchase Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Personal Loan Repayments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Car Loan Repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Savings & Investments
Pension Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Buying Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Mini Cash ISAs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Lump Sum Saving . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Regular Saving. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family
Pet Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.67
School Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Meals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pocket Money. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Nappies/Baby Extras . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Laundry/Dry Cleaning. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Children's Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Baby Sitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Childcare/Play Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,120.00
Pet Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62.32 We have a big dog (Rhodesian ridgeback) and a cat, with Petplan
Travel Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Entertainment
Satellite/Digital TV. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Family Days Out . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Cinema/Theatre Trips. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Books/Music/Films/Computers . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big Days Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Shopping for Fun. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Pet Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Hobbies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
IT/Computing (eg Anti-virus etc). . . . . . . . . . . . . . . . . . . . . . . . 2.92
DVD Rental. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
Drinking Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Eating Out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75.00
Clothes, Health & Beauty
Complimentary Therapies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Optical Bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Haircuts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.67
Dentistry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Beauty Treatments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Healthcare Cashplans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Dental Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Private Medical Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Fitness/Sports/Gym. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.00
Work Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
New Children's Clothes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.00
New Clothes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Education & Courses
University Tuition Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
School Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Your Courses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Big One Offs
Funeral Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Wedding Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Sofa/Kitchen/TV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Birthdays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.00
Winter Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Summer Holiday. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Christmas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.67
Odds & Sods
Newspapers & Magazines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.00
Tax & NI Provisions (self-employed only). . . . . . . . . . . . . . . . . . . . 0.00
Regular Charity Donations . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Meals at work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.67
Smokes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00
Coffees/Sandwiches/Snacks . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.00

Total monthly income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,772.80

Total monthly expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,170.54



Aaaah! I knew things were tight, but I didn't think we were overspending by this much. :eek: Where else can I cut things down?

Thanks in advance for your help...