Sweetdaisy's aim to be mortgage-free

sweetdaisy

I'm happy to say that I have finished all of my Christmas Shopping and was within budget . This is the first time that I have been very organised, but probably because I am on Maternity Leave and have had time to do it.

It will also be the first time that my pay (at the end of November) will not be spent on presents. I will of course treat the children to a few things as we are going to a Steam Railway and get to go on a steam train for a short journey and the children see Father Christmas. Our 3 year old Son loves trains so he will really enjoy this and we will also go to our local 'winter wonderland' etc.

On the mortgage side of things - I will continue to overpay by £59 a month (it's all that I can do at the moment), however for 2012 I think I need to set a 'savings goal' for myself. As I have an Offset Mortgage any savings is offset against this so I will still be able to reduce the term of the mortgage.

I just think that I need more savings money for emergencies, especially as from April 2012 (when I return to work full-time from Maternity Leave) we will be paying childcare costs again, so won't be able to save as much. Also, my Husband is being made redundant at the end of 2012, so we have a year to get more money behind us.

Also, having a savings target will keep me motivated as I need something to aim for .

lulabelle1

Keep smiling sweetdaisy, you're doing a great job x

sweetdaisy

The monthly Mortgage interest was added to the mortgage yesterday - £224.62. So mortgage balance is now £83,801. Can't wait to reduce the interest paid.

My mortgage payments go out on 16th of the month and I paid my first regular overpayment of £59 on 16th November. However, last month the interest added was £220 so not sure why the interest is £4.00 more, even though I overpaid :think:.

I have now applied for a Cashback Credit Card and as I applied for it through a Cashback site I have been paid £15.45 into my account. Just waiting for the card to arrive so that I can start using it and earning cashback as I make all purchases using a credit card and pay the balance in full by direct debit every month.

Sepa74

Hmm, there are only 30 days in September, and 31 in October, so that might be why the difference in the interest.

Work out your daily interest by multiplying the balance owing by the interest rate (ie if 3% than multiply by 0.03) and then divide by 365 (or 366 for a leap year!).

A lot of people find seeing the daily interest rate go doooooowwwnnn very satisfying!

sweetdaisy

Sepa74 wrote: »

Hmm, there are only 30 days in September, and 31 in October, so that might be why the difference in the interest.

Work out your daily interest by multiplying the balance owing by the interest rate (ie if 3% than multiply by 0.03) and then divide by 365 (or 366 for a leap year!).

A lot of people find seeing the daily interest rate go doooooowwwnnn very satisfying!

Thanks Sepa74. It works out that I pay around £6.88 a day in interest.

sweetdaisy

I applied for a Cashback Credit Card this week and was accepted. They have given me a credit limit of £10,000 which I am surprised at as I didn't think they would give that much . Can't wait for it to arrive so that I can use it for all my purchases and earn cashback.

On another front, we need to make some decisions for next year. My Husband is facing redundancy around August - November 2012. He has been working for his employers for 7 years and is expected to get arround £10,000 redundancy money. He has escaped redundancy around 4 times in the past 2 years however next year his employers are moving all production to Hungary and China, so everyone is losing their job . Luckily he is having quite a lot of notice so we need to plan what we are going to do.

DH said it may be best to stay in his job until he is made redundant and we can use his redundancy money as a salary for 8 months until we would need to dip into savings. Hopefully in this time he could get some electrical agency work to gain experience as he needs this to become an electrician's mate/electrician, as he currently works in a factory. He also need to apply to college next September to complete Level 3 City and Guilds in Electrical Engineering to become qualified.

I think it may be better for him to try and get any job before he is made redundant as I think it is better to have a job than to have no job, as we can't make do just on my wage. But, DH doesn't want to miss out on redundancy money. So, we need to decide what we are going to do :think:.

I suppose it's just a gamble: does he hold out for redundancy or tries for a job now? I don't want to use up all his redundancy money for 8 months and dip into savings as it is being used to offset against the mortgage . I would also rather him have a job, but if he does wait until he gets made redundant it will give him about 8 months to sign up with electrical agencies to gain experience with the aim of securing employment or find employment somewhere else (not necessarily in the electrical sector).

Sepa74

Hi,

That is a really tricky situation, and it's a good thing you have lots of time to plan for it.

I was made redundant two and a bit years ago... tbh, it was the best thing that could have happened for me, although it was horrible for other people (not only did my line manager love his job and felt bitterly betrayed that they had kept other people on instead of him, he also has 4 kids to look after!).

For what it's worth, here are my thoughts on the matter, based on my experience of redundancy:

1) Most of the redundancy money will be tax free and doesn't affect his ability to apply for jobseekers or other benefit, so it may stretch out a little longer than you think. Also, do you have mortgage insurance or anything that you would be able to claim money on? However no point in getting it now because he knows he's being made redundant.

2) Without the appropriate skills and qualifications, it would be very easy for him to be stuck in a dead end job - that 8 month cushion really gives him the opportunity to pick and choose to get the best job he can. Is 'any job' really the best option for him in the long term, even though it gives a feeling of security?

3) When is he planning to do his qualification? Is it something he can do while working if he has a new job, or is the 8 month window a good opportunity to speed up his city & guilds?

4) How flexible is his company about letting him choose when he can leave yet still get the redundancy? Can he choose when he goes? eg August and Nov in my field are both rubbish months to be looking for a job. September and October would be much better for me. What about electricians?

5) Are they offering any other benefits apart from straight redundancy? eg career counselling?

6) How flexible will the company be about giving him time off eg for job interviews etc. The 8 month window means he doesn't have to just take the first job offered, but job hunting is a full time job, and he may find he struggles to get a good job while working because he can't devote his full time to job hunting, which may also be demoralising. If his employers are inflexible, it may be better to wait.

7) Has the company had its consultation period? I would imagine this would have been at least 90 days, and they would have appointed employee reps etc. If this hasn't happened yet, then he may not know some of the answers to the above, and they may be able to influence the redundancy process to build in things like ability to take time off for job interviews and training, converting career advice to a training allowance etc.

It's nerve-racking being made redundant and knowing you will lose your income, and also horrible because everyone is under so much stress it gets very emotional. Everyone handles it differently, so things can get very unpredictable. But don't lose your nerve!! Redundancy can be a real opportunity. It help me jump a rung on the career ladder, and I'm now earning twice as much as I was before being made redundant and I am much, much happier because I didn't like the management of the place I was working.

Good luck, I'll be interested to hear how things go, so keep us updated!

sparklystar_2

Hi sweetdaisy
I read through your diary last night while up with LO and am now inspired to make some smaller payments off mortgage - I had been thinking I'd have to wait until I go back to work in April and then make larger payments but youhave got me thinking maybe anything left in our bank account this month I could overpay.
SS

sweetdaisy

Thanks for the advice Sepa74. Yes, we have some time to think about what we are going to do which includes DH looking to apply for a college course and trying to get experience in the electrical sector. His employers will give him time off to attend any interviews, but not to do any training courses as there is no flexibility in his working hours.

This will be the 2nd time that DH has been made redundant, the last time was 7 years ago and it took him 5 weeks to find another job (the one he is in at the moment). Looking back it was the best thing that happened because this job is better than his previous one, however at the time it was quite stressful .

DH has now decided he wants to stay in his job until he is made redundant, will use the redundancy money as a salary and will apply for jobs as soon as he is made redundant. In the meantime I am going to save as much money as possible to give us extra money if it takes him longer than 8 months to find a job, plus the more I save the more I offset against the mortgage .

sweetdaisy

sparklystar wrote: »

Hi sweetdaisy
I read through your diary last night while up with LO and am now inspired to make some smaller payments off mortgage - I had been thinking I'd have to wait until I go back to work in April and then make larger payments but youhave got me thinking maybe anything left in our bank account this month I could overpay.
SS

Hi sparklystar

I am on Maternity Leave and go back at the end of April and even though I can only afford £59 a month as an Overpayment - it is a start. I am also offseting savings against the mortgage so that helps me to reduce the term as well.

It is difficult with two young children, especially as there always seem to be something to pay for i.e. DS1 started school in September and can't believe how much we need to pay out in terms of school photos, school dinners, raffle tickets, new school uniform as he has gone through a growth spurt - it seems it's 'money, money, money' when it comes to school _pale_.

But, if I chip away at the mortgage now, it will benefit us greatly as I aim to pay the mortgage off by 2022 (4 years earlier) and DS1 will be 14 and DS2 will be 11 years old. Gives me plenty of time to then start savings for University fees etc.