I have a dream...to be a MFW

edinburgher

Do you mind me asking who you booked your Cyprus holiday with?

turtlemoose

ajmoney wrote: »

Ed, you have the cogs in my brain going!

He's got a habit of doing that hasn't he!

ajmoney

edinburgher wrote: »

Do you mind me asking who you booked your Cyprus holiday with?

Thomson, the cost wasn't much different to booking ourselves button better room and board basis. They are using £asyjet for the flights so it made it more affordable. Cashback bagged too:D

ajmoney

We have had our "money" chat and both agree that we do not want to commit £500 a month to the mortgage. I have been reminded on another diary that my new plan was to work at mortgage neutral rather than mortgage free, now I have been reminded of that it makes life a lot easier. We still have around £85k to find but it is a lot easier that £150k and probably more achievable. I want to look at setting some mini-targets to help give us some focus and make them something that Mr AJM wants to join me in, it will help as it will boost our savings pots too. The first goal I think will be to save £10k as we will then have half of the mortgage in savings which is an achievement in itself. Once I have my plans I am going to start up a new diary to give myself more of a focus. It may be a tough journey for us to save a minimum of £85k in the next 7 and a half years but we won't know if we don't try. The next job is to see how Mr AJM is best savings towards his share, I think he is open to seeing a financial advisor, he just doesn't want someone who is pushy like the last person he saw!

ajmoney

So I have a short term plan for me, I am setting myself a budget for June of £300 which I will withdraw from my account on Monday and do my best to live from the cash. The only things not included in this will be some train fares and money for a music lesson which I have budgetted for separately to come straight from my account. I think this should leave me with around £150 in my account at the end of the month if there are no unforseen payments. This leaves me £10 a day to spend but I am hoping not to use all of this money and what is left each day will be put aside, maybe to be saved at the end of the month. Ideally I need £207 left in my account at the end of June to pay for the credit card spends from last weekend so I don't need to use any of July's money. I also need to save another £156 to pay the rest of my repair course and not need to dip into my savings. I am trying to let my cash ISA build up now and not touch it at all. I miss the days when I could pay the maximum in a year but I like the house we live in now which takes more of our money!

The above might seem easy but I know otherwise. I am going to use June to see how it goes and then hope to increase payments to my ISA from July. I will need to set up small monthly targets like this based on my work routine as some months I need more money but I am hoping to sweep the left over money into my ISA at the end of every month. Operation build up my savings/work at mortgage neutral has begun (and this is without involving Mr AJM at this stage)!

ajmoney

I am having quite a few :doh:moments right now. I need to put my facts and figures down here as I think I can finally work out a sensible plan but I need to make sure I am not being stupid!

Of course we don't need to save a total of £85k as we will still be making our regular and small OPs to the mortgage so that figure needs to be included although not entirely sure how.

I am concentrating on our larger mortgage as that is the crippler but I will add the figures for the smaller one too as it would be ideal to pay it all off.

Large mortgage

Total as of 28/05/2015 £115063.24
Projected total 28/02/2023 £41930.45

Small mortgage

Total as of 28/05/2015 £34592.52
Projected total 28/02/2023 £17750.09

Total outstanding mortgage as of 28/02/2023 £59680.54

Whatever happens we will be mortgage free when Mr AJM finishes work as we already have that amount in savings :j

We will have a set yearly OP target of £1600 and would still have £5307.46 in savings based on today's total savings and not saving any more money.

When I have worked out where I am going with the whirring in my brain I will put the next segment but this currently seems right without another :doh:moment.

ajmoney

I guess my next step is to work out when we will be mortgage neutral but that is currently beyond the mechanics in my brain, especially as Mr AJMs savings strategy is not as easy to plan as mine. Forward from here we obviously need to keep paying more into our savings to ensure we have a good buffer when it comes to paying off the mortgage as I would hate to lose everything.

Step 1 - make all these figures work based on 31/08/2022 as this is my preferred MF date. My contract with work finishes then and in case it doesn't get extended I want to know the mortgage will be cleared. This is a very short term goal that only requires us to offset another £2496.45 (total outstanding mortgage will be £67484.45)

I guess the next step is below:

Step 2 - ensure we have a 12 month emergency fund for all our outgoings on top of the mortgage costs in case either one of us struggles to get a job (I still intend to be working at this point).

After this is guess we can just continue to see how early we could allow Mr AJM to retire by working towards being mortgage neutral, however this seems like the lazy way out as we don't need to work very hard to achieve this. If anyone has any suggestions of how I should be approaching this then please help me, I am sure there is something I am missing but my brain seems desperate not to show me the way!

ajmoney

Once we have achieved the above my plan is to change the plan again and work towards 09/07/2021 which has been my dream MF date as it will be our 10 year wedding anniversary.

Obviously everything depends on interest rate rises etc and I am not sure of I would take all the money out of our accounts to actually pay off the mortgage, the earlier we can bring this date forward the more likely I am to work on it as we can then rebuild our savings using the money we would have paid off on the mortgage.

So...

Step 1 - increase our savings pot by £2496.45 so we could be MF by 31/08/2022

Step 2 - 12 month emergency fund for both of us

Step 3 - increase our savings pot by a further £13563.56 so we could be MF by 09/11/2021.

I may swap step 2 and 3 around although it is all theoretical anyway as all the money will go to the same place anyway.

The only thing on top of this will be to make sure we have reliable cars for when we both stop having a substantial salary, either buying cars outright or saving up enough to buy a car. For now I am happy with these goals and think it will be quite easy to sell the idea to Mr AJM.

ajmoney

can you tell the calculator is being used a lot? I am on target to achieve step 1 and 3 in just under 3 years, I just need Mr AJM to save the same amount. I am also only using the money going into my cash ISA for those calculations, not the money going into my S&S ISA! I need to see how much Mr AJM is putting into his savings and show him this.

It is amazing how reading a couple of comments on other people's diaries can spark a change of perspective!

edinburgher

Mortgage neutral is a very powerful tool, you get the 'fun' of knowing that the bank has no real hold over you any more, but with the flexibility to make this fit your life plans better :beer: