Lulabelle's MFW Diary

lulabelle1

Great day, spent less than £5 and that included the wrapping paper for the kids Christmas presents! Never spent so little on a Saturday before......

Spent the afternoon with a friend of mine looking at properties. She's decided to invest in her firs buy to let property. We viewed quite a few apartments and houses and it looks like she's going for a 2 bed terrace and has made an offer.

I viewed the houses with her as I'm thinking of doing the same thing.

I'm so happy with myself that I've built up some overpayments and definitely still have my eye on becoming mortgage free but I just have a feeling that I should be doing something more with the money......

I currently have around £22k as an o/p and a few thousand in a savings account. My dilemma is do I use £20k of this to fund a 25% deposit on a £80k property and then rent it out.

My head feels very "busy" at the moment thinking about all of the pros and cons etc. If I take the overpayments out, it will still leave me with equity of around £80k which is not bad but it means most of my o/ps will be wiped out. Not sure whether I should go for it now or perhaps give it another 6-12 months to build up some more reserves and then take the plunge.

I'm expecting that I will break even in regards to rental income against mortgage/costs etc and am looking at it as a long term investment/pension fund, so selling at a profit (hopefully) in say 20 years. So my question is do I do it now or can I realistically leave it a bit longer since the house prices are pretty stable anyways.... Obviously if prices were starting to rise then I would do it sooner than later but if I wait I guess I wouldn't be missing out on any equity gains.

So much to think about. The thing that makes me nervous is that I have 2 small children and part of my MFW aim is to ensure that they will always have a nice home to grow up in. Would I be risking this by going down the btl route.

Would be really grateful to hear any of your thoughts and comments on this.

Thx, L

Tilly_MFW_in_6_YRS

I get the feeling we are both going through similar thoughts/considerations at the moment. I am going to reduce the mortgage more first but it doesn't stop me looking.

I laughed about your cupboards as mine are just the same and could not agree more about 'how do you know what you need to replace?'

Good luck with your plans

CathT

There are a couple of MFW on here with BTL properties. I'm not sure if there is a specific thread within the mortgages forum maybe?

Re: daily interest. There is a simple formula (can't remember exactly tho!) I use the spreadsheet off Financialbliss and it works mine out.

I think the fomula is something like outstanding balance x interest rate / 365.

wynnvegas

Hi Lulabelle,

Best of luck with the mortgage free journey. I would say that a spending diary, a good SOA and getting your husband on board is a pretty decent first week on the project.

The £600 food shop and the £650 additional spending are two areas that I would look to address (and so much easier if you know what exactly it's all going on). We were at about £850 a month of stupid spending (be careful as the grabbit board and Hot UK Deals are equally as addictive in spending money). Once you've worked out everything that can be cut out, it's as simple as dividing the amount you have spare every month into your existing mortgage to give you a mortgage free date. I'd agree that you're better putting all the overpayments toward mortgage 1 as a) the interest rate difference is enough to make it sensible and b) it'll be a great feeling paying the whole thing off.

Moyra only eats white meat so I manage to avoid detailed meal planning (I couldn't be bothered with all the prep and frozen food isn't half as good).

Count me as a subscriber. Hope to see the mortgage coming down as planned...

Cheers,

Billy

lulabelle1

Thanks for your support and tips Billy.
I agree re grabbit etc - I took a quick look and nearly ended up buying something I didn't need just because it seemed like a good deal. Thankfully I came to my senses before tapping in my card number.... So I shall stay away from it. Just extra temptation to part with my cash in my mind.....

I've worked out some numbers and reckon I could be mf in 7 years, but this would most likely mean no holidays etc. I have 2 small boys and whilst mf is very important to me, I dnt want to miss out on the things that create all of the happy memories, so I'll be aiming for mf status with a healthy balance, that's the theory anyway!

Thx, L

Tilly_MFW_in_6_YRS

Just a quick thought, if you don't have an offset, what about having a savings account for clothing. That could be for you all and will help to reduce the 'free' money, you will have a fund to hit the sales with when required and you can then focus your spending diary on the remainder of the £650 - may help?

sweetdaisy

lulabelle1 wrote: »

My cupboards are well and truly organised, for years I have always stored everything in order, did you ever see sleeping with the enemy? This is where the crazy guy stores all of his tins in rows with the label facing forward. Well with the exception of having the labels forwards, this is me! A row for beans, row for chopped toms, pulses, beg etc etc. I'm a real nightmare, if DH packs the food away, I have to organise it all again to my liking, otherwise how do you know when something needs to be replaced.

Sadly after checking the contents, apart from a box of fish fingers there wasn't really much to be found. All pasta, rice etc had been used up and no veg lurking anywhere. I guess this is a good thing as it means that I'm already disciplined, but unfortunate that there are no money savings to be made here.

I really laughed Tilly when you said that you turn the microwave off. Me too!!! Gone are the days where the microwave display is used to tell the time. Always turned off! Along with the TV's on standby etc etc.

Loving the tip re the doubling of the vouchers to buy wine, who needs lego land tickets for next Summer anyway thats what I say!

Just had to post! I organise my cupboards like you too and it drives me mad when hubby puts the food away as eveything gets all mixed up. It takes me ages to put everything back in order.

Re: turning off the microwave. The only things that are kept on overnight are: fridge/freezer, alarm clock, internet router and house phone :eek:. It used to drive my husband mad, but he switches everything off too. My Uncle used to work for the Fire Service and then became a Health & Safety consultant and he told me I should turn off all unecessary items and the advice has stuck.

lulabelle1

Hey sweetdaisy, thanks goodness I'm not the only crazy person with such organised foods!
Snap with the electricals but I also leave on the sky box so that it can record the items for my sky plus...
Enjoy your Sunday!

Thx, L

lulabelle1

I dug out my old "economy gastronomy" cookbook and am going to be cooking a big joint of ham today. In theory we should get a good three meals from it and the ham itself only cost £4 (was half price). So, it's soaking in some cold water for a few hours and then I shall boil it for a couple of hours in ginger ale/beer (thanks nigella) and then pop on a marinade and finish it in the oven.
We'll have it with champ today, with chips and eggs on Tuesday and finally with gnocchi and a mushroom pasta sauce on Wednesday. So iit could turn out to be a cost effective few days of eating.

Off out for some free fresh air now with the kids...

Sepa74

Lol... I'm the same with leccy... everything is switched off at night except the internet router, the fridge/freezer, the clock on the oven and my mobile phone (which charges overnight and is my alarm clock).

I switch off the TV and virgin digibox and my toaster... yes, my toaster has a digital display on it and has to be switched off at the wall after use. Ridiculous!