'Almost there...' A MFW Journey

kansaskitty

Hello and welcome to my first ever MSE journal, my diary of our journey to mortgage freedom!
:j

This journal is called 'Almost there...' and as you'll soon notice we are anything but 'almost there'! It is the title of one of my favourite inspirational songs from 'The Princess and the Frog' (yes, Disney... you'll notice a theme pretty soon). When I have been having low days about how long it is taking me to get to my dream career (five years now since I finished A-levels and have been in full time F.E training to be a teacher!) I sing this song to keep me going, and think of Princess Tiana's hard work to save money for her own restaurant and it inspires me to keep working hard, so now that I'm only 6 months away from being a qualified teacher I will soon be singing the song to keep me inspired to pay as much as we can to the mortgage! :rotfl:

I am 23 and DFi is 24, we bought our 3 bed terrace 18mths ago on a very long 35 year term, as I was still a full time student and we needed low monthly repayments. We are now down to 33.5 years and in June our fixed rate ends and takes us from 4.96% to 3.99% interest. Once I finished my degree and began my teacher training course I got a good sized bursary, and we were able to save £500 a month and book a wedding and Disneymoon for later on this year. My wonderful stepdad surprised us with some money for the holiday, so after this was all paid off we put £1000 away for DIY jobs on the house and built up a first-step emergency fund (car, boiler etc) of £500. After this we decided that we felt the £500 a month or so we had going spare would be better put towards the mortgage, so we scheduled a mortgage review with our lender.

Well we were blown away! By OPing £300 p/m we could cut our term from 33 years to 15! I have the exact calculations on a spreadsheet and in my filing cabinet but the short story is we were chuffed! We're not tied in to anything, we will be overpaying around £300 by S.O every month. As long as we don't overpay more than 10% of our mortgage amount (£9,900) per year then we're a-ok! We decided not to overpay the full £500 p/m as we want to build up our second-step 'disaster' fund of three months mortgage and bills, which for us will be £2400. We got £100 for switching our current account to the bank that provides our mortgage, which is also great because we can see the mortgage on our online banking which is a huge incentive to overpay! So each month we have a S.O to a car tax e-saver, a S.O to overpay the mortgage and a S.O to the disaster fund.

So there's the background information on my situation, and I have started this journal as a place to meet like-minded MFWs and to keep myself on track. I love reading other people's journals for inspiration and to get new ideas on keeping the momentum and making extra OPs.

Thanks for reading along so far, I will be posting any overpayments I make on here and probably some general ramblings about MSE things that happen in my life! Please feel free to give me some tips and tricks to OPing and if this thread can be useful to one other person then I'll be happy that I can repay some of the good that this forum has done for me! Our first overpayment and disaster fund payment will be on Feb 1st so there will be an excited post from me on that date I'm sure!

KK xxx

argomatt

Good luck with your overpayment journey :-)

I found that keeping my diary updated on here is a good way of keeping myself focussed, and reading through others is very motivational. Loads of good advice and encouragement too :j

I look forward to reading your updates on here.

:beer:

Georges_Mum

Reach for the skies! Well done. Will follow with great interest. xx

pavlovs_dog

I watched TPATF for the first time when it was on at Christmas and loved it (another Disney addict here).

You're joining quite a big gang of teachers, there are lots of us here (mostly secondary, wide range of subjects). You'll be in good company when you are fed up of marking, reports and exam stress

HelenDaveKids

Welcome and well done for starting so early into your morgage. You have the benefit of knowing what for most of us took several years to understand.
Good luck on your journey.

kansaskitty

Thank you so much for all of your replies, it's great to find others on the MFW journey. I do appreciate it. Great to know there's lots of other teachers on here too. The PGCE year is tough, I feel constantly exhausted and the pressure of finding a job (any job, but a supportive one with the age group I'd like would be wonderful...) is really getting to me!

As for MFW progress, we've made our first overpayment, wahoo! £300! :j

I am a big fan of Dave Ramsey's seven baby steps, and we've tweaked them to suit our needs and ended up with five baby steps. I thought it might be nice to share them here for support (and I nicked them off of someone else's diary I found, so they might inspire someone else) and advice.

Step One: Emergency Fund
Create an Emergency Fund of £500 for car/boiler repairs etc
(Completed Feb 2013)

Step Two: Three months expenses
Put three months worth of expenses (bills and mortgage) into a savings account
(Hope to start saving end of Feb 2013)

Step Three: Pay off your home early
Begin making overpayments on the mortgage and calculate how long it will take to pay off
(Started OPing Feb 2013)

Step Four: Pay off your Student Loans
Make overpayments when possible to cut down the student loan as interest is paid on this
(Hoping to start this Sep 2014)

Step Five: Invest in your retirement
Begin extra contributions into the pensions to secure our retirement
(Hoping to start this Sep 2015)

What do you think? I feel very proud that we've (almost- savings S.O should come out end of Feb) managed to at least begin the first three steps since I only started thinking seriously about this around Christmas time! As for the DIY pot I saved up, we've dipped into it to buy some wallpaper and paints as my wonderful stepdad (I keep saying how great he is, but he is, listen to this...) has offered to come up for a few days and paint our front room and paper our bedroom so that the house looks sharp for the wedding in the summer, as people are coming back here for the evening. We were very excited choosing the paints and paper and I can't wait for the house to feel a bit more 'finished', seeing as we've been in 18 months!

How are you all getting on on your journeys? Hope you're all well and that you've been keeping warm and well in the snow and ice, which in Norfolk at least has now gone but has been replaced by some strong winds!

KK xx

haggis4

Didnt want to just read and run so I thought I'd say I love your planning!

We done something similar when we started out in our first house and its amazing the difference it makes. I did get odd looks when paying in my first overpayment of £10 at the counter in the bank (I got so excited and just wanted to put something towards it until the next payday kicked in and my plan could swing into action) but it was worth it!!

I also think its a brilliant idea to have seperate little pots of money for different uses. It focuses the mind and I found it much easier to save. Hubby disagrees and doesn't understand but he just provides the money and I move it round!!

Good luck with the wedding and enjoy Disneyland. Its amazing but very very cheesy! Look on the disney forums here for plenty of advice. xx

kansaskitty

Hi all!

Thanks haggis for posting. I am the same as you- hubby to be doesn't really know what's going in and coming out but he's happy for me to sort it all out! Thanks for the tip to look on the forums here for advice about WDW, I'll do that. It'll help keep it on a budget and will add to the excitement!

Looks like you're making great progress from what I can see in your signature, how do you feel it's all going?

On the MFW front we've made another £300 overpayment, our second standing order overpayment. Woo! We weren't able to overpay any extra and we won't be able to make any more than the standing order £150 payment to our 'disaster fund' (three months expenses) this month, because we paid our car tax in a lump sum. Onwards and upwards though and onto next month when hopefully we'll be able to pay a litte more! We were scheduled to go away to Devon but we have adopted a rescue dog and will be settling her in instead, so that will save a few pennies that can hopefully go into the disaster fund.

Hope you're all doing well on the MFW front and progressing towards your goals.

KK xx

kansaskitty

December 2013 update/reflection

Well! I started this diary in Jan 2013 as a mortgage free wannabe with very good intentions and overall I don't think we've done too badly! I am now married rather than engaged (and deliriously happy, yay!) and I am in my first year of teaching rather than still a trainee. Enjoyable but exhausting and quite stressful at times!

Financially in 2013 we achieved...
£2320 overpaid on the mortgage
£1800 disaster fund saved up
Wedding and Disneymoon with no debt
Cosmetic DIY on the house (paint, wallpaper etc)
Bit more substantial work on the house (new back door, woodburner)
No troubles with car tax/vet bills etc as have monthly standing orders for car expenses and cat/dog expenses.

I do feel proud overall of what we have achieved this year and how much better we have felt being that bit more financially secure. I do not, however, have high hopes for our financial stability in 2014!

Why? Let's look at Dec 2013...
The car
We have to run two cars in order to travel to our respective jobs and unfortunately in Dec 2013 one of our cars died a spectacular death with a blown head gasket and seized brakes and the car really being too old/not worth forking out to fix it. After two incidents of having cars so old they were essentially written off/not worth fixing we splashed out and bought a newer and hopefully (eek!) more of a safe bet car.
£3550 on credit card at 0% for 11 months.

The woodburner
In April 2013 we had a gorgeous wood burning stove fitted however we thought we'd be ok without a liner as we have a sturdy Victorian house. Not so! We have never had a chimney fire or our carbon monoxide detectors have never gone off but our wall gets hot with the fire on so we are having it lined to feel a lot safer/avoid having our house suddenly crack down the middle! Hubby was given a bonus of £1200 due to come in a lump sum Jan 2014 which would cover most of the £1500 expense of the flue liner, so we went ahead and booked the liner for Feb 2014. However the bonus is now coming in one £400 then eight £100 instalments so we don't actually have the money upfront for the lining, whoops. To add to that we got a cheaper price for saying we'd pay in cash, aargh! So we will use £1500 of the £1800 disaster fund to pay for this in cash. This significantly depletes the disaster fund we worked hard to save for. I know this is what they're for but I just hope the boiler/other old car doesn't now fail! At least we had the disaster fund though or it would be more credit card debt! Think positive!

The kitchen
After saving £1800 and overpaying £2320 we thought we'd take our foot off the gas and treat ourselves to a new kitchen as ours was put in during the 1970s (true, not an exaggeration!) and is in a very sorry state, and b&q do four years 0%. This one is not an emergency as we haven't signed up for anything except had one building work quote and booked a b&q consultation so we will probably need to cancel this completely. Never mind! It would have been over £10k debt which we're now avoiding, whether I kid myself it's ok because it's 0% or not. Our kitchen is awful though!

So two weeks away from 2014 our new targets are to
Rebuild the disaster fund with bells on to £3000
Pay off the 0% CC in full £3550

Wish me luck! I know overall we could have bought a £500 runaround car and cancelled the flue lining but I think we'll manage, without our £500 savings standing order or our £360 mortgage OP. I think!

Thanks for reading if you made it this far! KK xx

pavlovs_dog

Merry Christmas Kansaskitty. Sounds like you've had a very busy yet productive year! All the best for 2014.

kansaskitty

Inspired by pavlovs_dog I had a good look at how much overpaying our mortgage in 2013 helped. We couldn't manage it regularly but we OP'd 7 months out of 12. I was a full time student and we also got married, so I'm hoping this calculation will spur us on to try to continue to overpay more regularly throughout 2014, despite the car and flue lining costs, because now we're both earning a full time wage. Eek! (The idea of the kitchen is completely out of the window, boohoo. Maybe next year eh!?)

Year / Opening / Closing / Capital Reduction / OP / OP as % of CR
Jun 11-12 / 100694 / 99609.18 / 1084.82 / 0 / 0%
Jun 12-13 / 99609.18 / 97163.12 / 2446.06 / 1216.32 / 49.72%

So OPing our mortgage just from Jan 13-Jun 13 contributed to very nearly 50% of our total capital reduction! Yeahhhh! :dance:

This was with a standard payment of £485 then rounding it up to £800 with a S.O. It was quite a large overpayment,but remember we didn't manage it every month. However for anyone thinking whether it's worth overpaying I would say yes it has made a big difference!

Off to do some calculations now to see if we can rebuild the disaster fund, pay off the 0% CC (car) speedily and still manage to overpay a little.