A penny a day keeps the bankers away- My MFW diary

VICSH

Hello I am V (30) and this is my shiny new MFW diary. I have lurked on here for at least a year but neither me of my DH were in a position to move forward on this until now.

A background on us, my dh (28) brought our home in September 2007 for £169,000 with a mortgage of £160,000! We have paid down the mortgage to £138,514 as of yesterday. We have 16 year 7 months left on the mortgage on a +2.0% on the base rate.

When I was on Mat leave with my son 2010 we really struggled financially and with poor planning on our part ran up a bit a of personal debt which has now been cleared. We have a good amount of savings behind us now £10k which I would not want to touch as is our rainy day fund.

2011/ 2012 we got married, had a new kitchen put in and paid all our outstanding debts off. As of January my son is receiving the government funding for 15 hours free childcare at pre school so we have a bit extra cash a month now on top of extra money from paying our debt back.

My main motivating factor for this is that currently we are not in our forever home, both myself and dh are ins stable jobs and are unlikely to see many changes to this. I would ideally like to reduce our mortgage to finish in 10 years but with a view that is the most secure way of saving towards a bigger house at the same time of protecting ourselves from any rate increases in the coming months/ years. Both DH and I are risk adverse and although he is maybe not as obsessed as I am when I told him a 1/3 of our mortgage repayment each month was interest he was shocked and he is now onboard but does leave the finances up to me.

I have started a diary as I would like to make sure I feel accountable to this, I have a weakness for a bargain and online shopping and for me to be able to achieve our goal in need to stay 100% committed to this.

Day one of the MFW dream started today

VICSH

I should have added to the top, this year goal is to reduce the mortgage by 12000!
That is a lot more than I would expect it to be but we have been told we are being given some inheritance in April of about £6k I would like to match that overpayment which is £500 a month. According to my budget I have £700 a month 'spare' which I could increase to pay into the mortgage but I think if I keep back £200 each month into my isa I can always transfer it to the mortgage if I need to.
So if you were to give a new MFW a tip for what I consider to be a LONG road anything you would say?

VICSH

Right so today I have sorted out my First Direct Switch £125 bonus towards overpayment, does anyone know how long this takes to come through.
i have moved some money into my saving account and swept some pennies onto the mortgage (i plan to do this on top of the £500 fixed OP a month).
Checked my cashback account is now linked wiht new account, I have some cb waiting to be paid but I need to wait 10 days as I have changed bank account.
Finally I have meal planned, I have a lot of meat left in the freezer so only a small top up shop on Friday for fruit/ veg/ milk/ yogurt.

bownyboy

VICSH wrote: »

So if you were to give a new MFW a tip for what I consider to be a LONG road anything you would say?

Welcome to the board. If you are like me and have a regular overpayment come out each month, then it can become hard to keep motivated sometimes.

I recommend setting monthly / yearly goals and also doing comparisons between now and where you were a year ago.

Things such as:

• Balance
• Daily / Monthly Interest
• % of house owned
• number of payments left
• target for monthly interest being below x
• target when balance reaches x (eg: £100k milestone)

I also sometimes rejig my spreadsheet to see where I would have been if I hadn't made any overpayments, its quite eye opening.

VICSH

WOW your sig is amazing, was that all down to monthly overpayments?
Do you have a diary with that progress it definately in inspiring!

bownyboy

Thanks I do a regular monthly overpayment of £500 and then put some additional into an ISA which I can pay off in January. I'm with Alliance & Leicester which allow 10% in January and up to £500 per month.

You can read my diary here

ben501

For extra support you could join

The Mortgage Free in Three - Take 3 challenge (MFiT-T3) or 2013 mfw or both

VICSH

Thanks for the welcome and encouragement.
Well since the above ive had a mixed few days my son hasn't been well and we needed to go into the hospital so my planned NSd was ruined with £15 car parking bill and teas in a and e! Good news he is on the mend but it gas really put into perspective how much I want this mortgage to be gone so I don't worry about missing work if my son is I'll etc!

On a plus side did a small weekly shop and made loads of soup and tea loaf for lunches this week and today was another NSd which takes me to 5 this week!

catshark88

Welcome and good luck in your quest.

Sorry to hear about your DS, hope he recovers quickly.

VICSH

SO back at work today after a few days off last week with DS I am glad he is better but I dont half feel guilty being out of the office for a couple of days.

Anyway onto MF news:
Round down day all done total this week is =£18.48
£500 into savings for large OP at the end of the month
Cashback account all set up
First direct paperwork all completed and sent off

Aim: We are trying to reduce our energy comsumption as EDF have written to say they are adjusting our monthly direct debit as we have not been paying enough :-( so DH and I are concerntrating on reducing the electric and gas consumption. Any ideas or tips?

kansaskitty

Hi V, I just wanted to say you've made a great start and I'm eager to read along and keep up with your progress.

People have made some great suggestions here to keep motivated, I'll be using them to keep myself motivated! I might even start a journal of my own, sometime!

Thanks for posting, keep on keeping on! xxx