The long journey to freedom, best pack a picnic!

Barbeduk

Hi, I've just made it over from the Debt Free Wannabe board, but have been visiting here for a few weeks reading all your amazing stories.

In the past DH and I were quite sensible with money but goodness knows what's happened for the last 10 years! Anyway, it's time to finally grow up and take control.

We have an interest only mortgage of £196,696.05 @ 3.99% variable due to be repaid by August 2028. I want to repay it in 14 years so I'll be mortgage free when I'm 60. (yes, really I should have grown up by now!!).

The mortgage grew 6 years ago, we increased it to buy our business outright rather than taking a business loan. The remainder of the finance needed we raised by selling the endowments.

It's tiny steps at the moment, as we also need to build up our safety fund and annual budget for stuff like car ins etc. The bank will let us repay as and when so I've set up a standing order for £150 a month from 1 July and hope to gradually increase this as well as making lump sum repayments.

When paying off the cc debt I used to PAD so now I'm putting all the spare money straight into the savings account because once it's safe in there I won't be tempted to fritter it away on rubbish. Transferred £2 today as DD had packed lunch instead of school dinners, every little helps!

Anyway, thank you for reading! Sorry the first post is a bit dry but it's trying to get it all out of my head and onto here so it makes some sort of sense!:o

Rafter

Well done on getting 'unsecured' debt free!

The PMT function on Excel suggests the monthly repayment to get you debt free in 14 years is £1,530 if variable rates stay at 3.99%. This is currently £875 higher than your current monthly interest payment if I have my sums right.

This is also what you would have to pay if you remortgage, as interest only loans are now difficult to get as are repayment mortgages beyond normal retirement age.

You are also right to build up a safety fund rather than throwing stuff into your mortgage - but try to make it tax efficient.

You should be able to get an isa rate of 3%+ and I would suggest you try and get a few months outgoings in there as a fund, then throw everything else at the mortgage in overpayments.

The other type of safety net is a credit card with plenty of limit - but less secure than 'hard cash' savings.

Hope that gives you a bit more information that helps - even if the monthly number is a bit scary it gives you something to work towards and seems achievable given your performance getting your card debt under control.

Good luck

R.

Barbeduk

Hi Rafter,

Yes, got my ISA set up and shopped around for the best rate. Also thought I had a decent rate on my savings account until I read up on the first direct deal so might have to open a current account and savings account with them too.

Can't even think about remortgaging at the moment due to income multiples so once my emergency funds are in place, will chuck all I can at reducing the debt.

I do, of course, have the credit card with high credit limit already in place with nothing on it (yippee!) and another that I use for day to day spending (collecting points) which has a dd to pay in full each month. Ooh, that makes me sound almost sensible.:p

Thanks for reading.

Barbeduk

Time to work out the short term goals as once they're out of the way the lump sum overpayments can start.

1) save enough to cover 2 x car insurance, 1 x buildings & contents, mot and service. All due in aug, sept and october, gulp.
2) save for new boiler, needed before winter starts.
3) save for a log burner, this is want rather than need but will finally make this house feel like home.
4) save for January tax bill. As of today we have enough to cover this july's.
5) save for Xmas but this will be helped out this year by vouchers from opinion sites etc.

Luckily DH is getting on board and has accepted 1 day a week extra work for the rest of the year. This does mean that he works 6 day weeks but gives us a bit of extra security. We're both self employed so will have 3 income streams, one paying monthly, one weekly and the 3rd as and when there's funds available.

Got some income coming in tomorrow so anything not needed for necessities will go straight into the savings accounts.

Well done if you've read this far, it's good to get my ramblings down in black and white so I can see exactly where I'm going with this!!

Sepa74

Hi Barbeduk, welcome to the board and congratulations for becoming unsecured debt free!!

I'm looking forward to reading your story.

Barbeduk

Thanks Sepa. Trouble is I want it all to start happening now and sadly life's not like that! Still, a low spending weekend and budget all set for the week. Really enjoying reading the diaries and can't wait for my own repayments to start.

It's amazing that since I started my MSE life I've realised that all the things I enjoy doing most cost nothing at all, going to the beach, running round the woods. And luckily the kids are the same. If only I could pick up a cheap camper van . . .

Barbeduk

Well, after a tough week last week when everything seemed to go wrong, we seem to be turning a corner! Thought my car had well and truly died but DH managed to fix it, the £750 we have been owed for 3 weeks should be paid to us this Friday. The tooth that needed a crown ended up being pulled (but hey, saved nearly £300!).

We now have enough saved for a new boiler, can't tell you how wonderful that piece of news is as ours hasn't been working properly since before Christmas. So sick of luke warm showers! The plumber's coming tonight to finalise the quote.

Despite feeling a bit glum we managed not to get a take away sat night (haven't had one since jan so we'd have been cross with ourselves had we given in to temptation!). Instead we bought a pizza from morrisons!

So, still need to save for the car ins/tax/mot/service but that is manageable. The log burner after that which will be worth the money just to have DH smile throughout the winter. And what else can we do with all the wood the dog brings home? Then some Xmas savings then . . . . Yes, save for big mortgage payments! We will get there, we will, oh yes we will!

misscousinitt

Hello and welcome.

Just popped on to wish you best of luck.

MCI

Barbeduk

I know this is a baby step, but the first standing order for £150 came out yesterday. From little acorns . . .

Sadly the boiler is, of course, costing double the amount we allowed for but at least once it's done we can enjoy hot showers again!

So everything is being pushed back, frustrating but that's the way it always seems to go. But hopefully by this time next year that monthly standing order will be bumped right up and we'll have our emergency fund too. Can't wait. There's an awful lot to be said for financial security.:)

Barbeduk

Well hello little lonely diary!

Although I haven't been posting I have been keeping up with some of the other diaries and our finances continue to look healthy despite a downturn in business profits for the last tax year.

Every cloud has a silver lining as they say. I had saved furiously for our Jan tax bills only to find that due to the lower income DH owed very little and I got a tax rebate! What to do with that money then?

After much thought I have replaced my dying R reg car with a '54' model and the rest of the money will be spent on a trip to Florida. Yes, I know that's not very MSE but we thought we may never have the chance again as DD will be starting secondary school in 2014. And the chance of a holiday like that with no credit card involved was too good to miss! We've never taken the kids abroad before and they're desperate for an 'aeroplane' holiday.:)

So, holiday paid for. Now the goals are:

1. As priority, saving for DH's tax bills for July and Jan '14.
2. As we will be away during Dec (also traditionally our poorest trading month), save enough funds to get us through Dec and January.
3. Save to do work on the house. We have been putting this off for TOO LONG.
4. One the above has been achieved, start capital repayments which I hope to be in the region of £1k a month.

Have discussed this with husband (his view of dealing with financial stuff is to not think about it and try and disappear should the subject arise), and he seems really up for it. Showing him how much I (we) saved in Feb helped too! So he's going to continue with the 6 day weeks in a bid to get everything moving.

Sorry to blab on, but it's so nice to write it down rather than just have it going round my head!!

Thank you for reading.:D

Barbeduk

Ok, so although I'm just aiming at OP at the moment I thought I'd just keep this little diary going so that I can see the positive changes we're making. So this weekend:

• Fun run around at the beach with kids and dog yesterday.
• Husband worked an extra day for another business.
• Sat night treat was crisps and a glass of wine watching Ant & Dec!
• Husband is colouring my hair later and I'm cutting his!
• Have got all small boy's birthday presents, just need card.
• Heard about the Nationwide account paying 5% for 12 months so must open one.

Right, back to the real world to do some jobs!