Vixstar's 3 Step Plan to MF-dom

Vixstar

So have been umming and ahhing about setting my intentions down on this site for a while but today I have finally decided to.

So who am I? I'm single, no pets, decent wage and just over £70000 worth of offset mortgage that has around 25 years to run (sorry a bit vague about the figures as I don't have all the necessary paperwork with me, I promise to put more details later for those that like to see them. My MF challenge is a little impeded by a loan I have just taken out for £8000 to buy a new car, this is over 3 years and starts payments next month. I can overpay this loan without any impact or fees so that is being included in my MF plan. I also have just over £6000 of rainy day savings offset against my mortgage. I also have a 'free' money (quidco cashback, dooyoo, sealed jar) savings acount with around £50 offset against mortgage this is my guilt free treat fund - over the years I have used it towards a DS, I Pod etc - and I'm building it towards buying an expensive painting (exact one yet to be chosen).

That's the facts and figures so what's the plan? Well the three steps as I see them are:

1. Get and keep a balance of £7500 in rainy day savings - this should be achievable in 3 months and must be achieved first.
2. Pay off car loan
3. Pay off mortgage (or at least significantly reduce to up equity for next place)

How I'm going to achieve no 1 is fairly clear in my mind, reign in my spending and save more. So to this end I'm going to force myself to keep a spending diary over June just to see where it all goes.

I am keen to reduce my debts but I also want to have a lifestyle which I enjoy so I will not be cutting out every treat and luxury to make OPs but I will becoming more money savvy.

originalmiscellany

Welcome to the MFW area
Your approx salary would be useful; even just broad figures such as 30k etc.
It certainly looks like you've got a good financial head on...
1) If you've got an offset, you can use that as rainy day savings can't you? I don't have an emergency saving scheme, knowing that I can take money out of the offset if there's an emergency.
2) Car loan must be the highest interest rate I guess? Get on shifting that off first?

An SOA is superb - you're a regular here; but it could identify some key areas of "Fat" that could be trimmed?

Looking forward to seeing do great things here

Vixstar

Ooops forgot details as to my wage - I earn around £40000. I will look into how I access the offset money athough I do like having instant access cash as I want to start paying of things like flat maintenance fees,insurance and even maybe my OU fees in full when due rather than monthly as I think the monthly dd costs a little more. I also know I have a fairly substantial bill coming up for major maintenance on my flat and I really would like to pay this off in one go and it may take most of my savings to do it.

I will post an SOA but would like to wait till the end of June when I have an accurate idea of where the money goes. I do, in theory, know where it goes but I have a feeling I'll still get a few surprises from my spending diary!

CathT

Welcome and good luck.

Vixstar

Thanks for the welcomes - am off to browse some more diaries to search for hints and tips.

Lois_E

Welcome Vixstar. Hope you enjoy the journey - and the destination too.

GeorgieFTB

Hello and welcome

I'm also of the opinion that I'm not going to live like a monk for the next 10 years to pay off my mortgage a few months early!

you sound like you have your head screwed on so the only thing left to say is good luck!

Gx

Vixstar

So keen to start my spending diary that I miscalculated my payday! (Although a monthly spending diary I plan to run it payday to payday) Will have to be patient a little longer, although any spending this weekend my appear next Tues (payday) so will have to keep a record of anything spent this weekend.

Vixstar

Finally some detailed details!

I'm a single thirty year old and I've been lucky to have been paying the mortgage on my flat since the end of 2005. It is most definitely not my forever home (there are times when I regret buying it) and I am considering putting it back on the market in mostly optimistic hope. Don't get me wrong it's a very sweet flat but in the wrong place for me. I had never really put much thought into my mortgage project until the end of last year after having difficulties trying to sell I decided to transfer to an offset mortgage and use a fair chunk of my savings to reduce the LTV.

As of the end of May I owe £70,521.70 at a rate of 3.75% with 19 years and 8 months remaining, meaning my current MF date is Feb 2031. I've been playing around with the overpayment calculators and it's amazing how much affect OPs of £100 a month have on the term (I generally hope to be able to pay more than this).

I also have a 3 year car loan costing me £272 a month. I have just e mailed the loan company to get details on how to overpay this.

I also have a student loan but tend to ignore this as it comesstraight out of my wages, although I am keenly awaiting the latest statement as I think I may have paid this all off by next year. If thisis the case it will leave me £200 a month better off,better than a promotion at work! When this money arrives I will definitely be using it towards either paying off my mortgage or strting a pension, I don't want to fritter it away. This reminds me I need to chase up my student loan online access so I can kep a closer eye on it.

Think thats all for now,sorry bout the length of post.:rotfl:

Vixstar

Spending diary is going well to date. Making me consider my spends a bit more than usual, although I'm going to have to develop some restraint/common sense with the food shopping!

So been having bit of a think about goals for my first few months of MFWing and my targets by 31/12/11 are:

* To maintain a balance of £7000 in offset savings (this will be used for making large yearly payments and then refilled)

* To make OPs of £3000

Starting simple and with achievable goals. I'd also like to fill my spare change pot as it's been on the go for 18 months and I'm intrigued to know what's in there - I save £2s and 5ps and coppers. This will not be used towards an OP (at lest not immeditely) but will go into my offset me fund.

kingster2069

Welcome Vixstar, seems like you have some great goals in your first 7 months. The great news is if you keep up that sort of over payment you should clear your mortgage in under 9 years:j.
I used this over payment calculator and estimated you would over pay by £5k per year (as your trying for £3K in 7 months).
Good luck with your journey, I'm hoping with a good wind I should be finished about the same time.:T