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Turning a corner (and going the right way).

sickbean
Posts: 27 Forumite
So after several years of smashing down debts and tightening our belts, it now seems like we are getting to the light at the end of the tunnel.
I've redone our budget, and even with massive overpayments on all remaining debts (which are all at 0% interest and will be paid off before the deal ends), once all essentials are paid for we have around £700 spare each month. I've not counted entertainment, new clothes, holidays etc as essential, as we've pretty much done fine without them for the last few years.
The question is, what to do with this surplus now it's there? Pay off the 0% debts even faster? Overpay the mortgage? Go on holiday? Save?
I'm really keen for this money not to just get swallowed up on champagne, top-hats and caviar (tempting after then all the smart-price baked beans we've been living on).
FWIW, my family consists of myself, my wife, and 8 month old daughter. We've just set up a trust fund for her so that's a good use for some of the extra money.
All ideas welcome.
I've redone our budget, and even with massive overpayments on all remaining debts (which are all at 0% interest and will be paid off before the deal ends), once all essentials are paid for we have around £700 spare each month. I've not counted entertainment, new clothes, holidays etc as essential, as we've pretty much done fine without them for the last few years.
The question is, what to do with this surplus now it's there? Pay off the 0% debts even faster? Overpay the mortgage? Go on holiday? Save?
I'm really keen for this money not to just get swallowed up on champagne, top-hats and caviar (tempting after then all the smart-price baked beans we've been living on).
FWIW, my family consists of myself, my wife, and 8 month old daughter. We've just set up a trust fund for her so that's a good use for some of the extra money.
All ideas welcome.
0
Comments
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perhaps you can make some extra repayments on the mortgage and then save some too. Apparently you can generally only overpay £500 a month on a mortgage (so I've read on here) so that might be something
super well done though! xxxLife is too short not to love what you do.0 -
Also, once you're debt free, treat yourself, you deserve it and it will taste so sweet because you've earnt every penny of itLife is too short not to love what you do.0
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I'd start by saving an emergency fund of perhaps a couple of thousand to start (then you can add to it each month to bulk it up).
Then personally I'd consider a holiday or whatever 'treat' you want for your family (obviously still applying proper money saving principles of getting the best deal!).
And then once you've had that I'd think about about starting to overpay the mortgage.
and maybe upgrade from smart price beans to own brand ones!!A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0 -
Yeah, the mortgage is where I'm leaning. It's not too bad - £80k on a house of £150k.
Can you over-pay £500 on any mortgage deal or does it have to be pre-approved by the lender? Our current deal is pretty good with regards to interest rates and still has a while to run.0 -
I'd start by saving an emergency fund of perhaps a couple of thousand to start (then you can add to it each month to bulk it up).
Then personally I'd consider a holiday or whatever 'treat' you want for your family (obviously still applying proper money saving principles of getting the best deal!).
And then once you've had that I'd think about about starting to overpay the mortgage.
and maybe upgrade from smart price beans to own brand ones!!
ASDA beans you say? Sounds luxurious! Might even get the ones with little fake sausages in!
I like the idea of an emergency fund - 6 months salary in cash would be a nice thing to have lying around I suppose. Isn't it possible to get mortgage deals where you can overpay, but still have reasonable access to the overpaid money if you need it? Seems like that way the money you would save on mortgage interest would be better than you could earn with the cash sat in a savings account. Or does it not work like that?0 -
:)Yep - offset mortgages - sound like a good idea from what I know of them, especially as interest rates will likely be rising next year.:(A smile enriches those who receive without making poorer those who giveor "It costs nowt to be nice"0
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As early as August this year is what the doomsayers in the Sunday Times said. These rates couldn't last forever I suppose.
I'll look into offset mortgages, sounds like it would be a good idea for us.0
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