'Almost there...' A MFW Journey

pavlovs_dog

kansaskitty wrote: »

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:

That's a fab percentage, really hammers home the difference even little OPs can make. :j :j

Something else you may like as an alternative to a complicated MFW spreadsheet... put your mortgage details into a snowball debt calculator. No OPs, just bog standard capital repayments. This will produce a reasonably accurate chart tracking your remaining payments and the decline of the debt. Copy and past the chart into a word document or spreadsheet and add a column to track your actual balance. By comparing the difference between what your balance should be and what it actually is, you can see how far in advance you are of where you would be with no OPs. Counting the number of rows between your current balance and when you should reach that balance is a crude way to work out how many months/years you have shaved off of the life of the mortgage so far. For example our balance with no OPs should be just under £122k (its just under £116). We've shaved approx 20 months off, and are about £1.5k capitol reduction away from making it 2 full years

kansaskitty

I am really hoping to keep this diary up, as my 2013 entries went Jan, Jan, March, Dec! Rubbish!

We cancelled the b&q kitchen consultation and have told the builder that we won't be in the position to consider knocking the wall out and measuring up for the new kitchen for at least 6 months to a year. So the kitchen idea is completely on hold until the car is paid off and we have rebuilt some disaster fund.
I have made some calculations and plan to pay:
:starmod: £400p/m to the 0% car CC to entirely and absolutely definitely clear it by end of Sep 2014.

:starmod: £250p/m to rebuild the disaster fund to £2000 by the end of Sep 2014. This could go towards paying off the car too, but having had to use our disaster fund in 2013 I am quite keen on having one in case of another car failure/boiler/redundancy etc!

:starmod: £158.90 mortgage overpayment each month. Again this could go on the car CC/bulk out disaster fund/even begin a small savings pot for the new kitchen but seeing how much OPing helped last year (50% of our total capital reduction!) I am keen to OP just a little bit. So I am still a MFW, yay! I can keep my diary in this area of the forum and I have joined the MFW 2014 thread, just awaiting my new number.

Life-wise, we had a wonderful Christmas break. We went back to where our parents live for a week and had a brilliant and restful break, being totally looked after. We then had hubby's sister and brother in law up to ours for a week which involved lots of movie watching and walking the dogs on the beaches around where we live. All in all we feel really relaxed and recharged which is just what we need before going back to school Monday! We still have a couple of niggly jobs to do, namely:
- Xmas decs back into loft
- Clean filter of washing machine as it STINKS like rancid meat and is disgusting!
- Reorganise and tidy airing cupboard

I have set myself two New Years Resolutions, or goals if you like.
* Have a positive mental attitude
* Make more time for reading
I love reading so very much and I often find myself watching carp TV that I don't even enjoy, then passing out as soon as my head hits the pillow. I want I stop this silliness and really get back into enjoying a good book as a way to unwind after a day at school! I would like to try to think positively about as much as I can, because I can be a bit of a negative nelly and dwell on things that don't need dwelling on, so I am going to make a concentrated effort to find positives and be grateful and thankful for what I have. We hosted a 'UK Thanksgiving' this Nov where we listed what we are thankful for and it was one of the best things we have ever done!

Thanks for reading and happy MFWing all! KK xx

linz

Hi kansaskitty,

I like your positive thinking resolution. I'm going to nick that idea for myself too I think I spend too much time worrying about things and not looking on the bright side. You are right, we should be more thankful for what we have.

kansaskitty

linz wrote: »

Hi kansaskitty,

I like your positive thinking resolution. I'm going to nick that idea for myself too I think I spend too much time worrying about things and not looking on the bright side. You are right, we should be more thankful for what we have.

Glad this struck a chord with you, good luck on your positive thinking journey!

Olderbutnotwiser

Good luck Kansaskitty I wish I was this savvy at your age x

kansaskitty

Olderbutnotwiser wrote: »

Good luck Kansaskitty I wish I was this savvy at your age x

Thank you very much! Sometimes I get silly and think we act a bit too old for our age, but if at 24 I'd rather take my beautiful dog on a lovely walk than go out clubbing, what does it matter!? It's certainly cheaper! Glad to find out you have a shiny new MFW diary of your own, off to read and subscribe!

kansaskitty

Over on the lovely pavlovs' diary I ended up somewhat hijacking the thread as another user asked me how I was progressing with my five baby steps (tweaked from Dave Ramsay's Seven Baby Steps to Financial Success). I answered in the thread and then realised I should document my progress here too!

In Jan 2013 I decided on these Five Baby Steps to Financial Success, with a view to a rough three year plan:
Step One: Emergency Fund
Create an Emergency Fund of £500 for car/boiler repairs etc
Aim: Feb 2013
Reality: Completed this Feb 2013

Step Two: Three months expenses
Put three months worth of expenses (bills and mortgage) into a savings account
Aim: £3000 by Dec 2013
Reality: By Dec 2013 we had reached £1800, then in Dec 2013 our car died and our flue needed lining so we used the full £1800, aargh. Let's start again in 2014!

Step Three: Pay off your home early
Begin making overpayments on the mortgage and calculate how long it will take to pay off
Aim: Begin OPing Feb 2013
Reality: We began mortgage OPs in Feb 2013, and we managed to overpay £2340 during 2013, which made a big contribution to our overall capital reduction and kept me on the MFW path! We are continuing to OP a small amount in 2014, not as much as I'd like but paying off the car ASAP is a big priority of ours.

Step Four: Pay off your Student Loans
Make overpayments when possible to cut down the student loan as interest is paid on this
Aim: Begin Sept 2014
Reality: We didn't do this at all, although as I completed a PGCE (teacher training) after 2012 I do have a large chunk of it that is at around 6% interest rather than the <1% interest the rest of mine and hubby's is at, so it is something we seriously need to think about. However my husband looks at this like Martin Lewis calls it a 'tax' rather than a loan, it's just something we pay each month out of our wages otherwise we wouldn't be able to be in the jobs we are now (teachers). Unsure which direction we'll go on this one, although with our yearn for this long talked about new kitchen and the car due to be paid off in Sept 2014 I can envisage the kitchen taking priority... eek!

Step Five: Invest in your retirement
Begin extra contributions into the pensions to secure our retirement
Aim: Begin Sept 2015
Reality: Again, we didn't do this in 2013 but we did seriously research it and found the best option for us (there's so many options out there to contribute extra to your pension, it's mind boggling!). The best option came out as making AVCs. We decided that being 24 and (almost) 26 we would like to improve our house first and continue to keep AVCs the aim for around Sept 2015. I think the general aim is to begin making extra contributions into our pensions before we have littluns, so that we get 'used' to that money going out of our wages and we just continue it... because if we had children then tried to make extra contributions it just wouldn't happen! I would say children are between 2-4 years away for us, but as we all know sometimes life doesn't go that way so we'll just keep smiling and see!

I think the 5 baby steps really helped us to focus our financial goals, we printed and laminated them and put them inside the kitchen cupboard so every time we got a snack or made dinner we saw them! They're still there but after the car/flue/cancelling the kitchen they're just annoying me whenever I see them now, grr!

In other news we picked up our courtesy car today, as our new car is being MOT'd and fully serviced before we collect it. It's also having some snazzy things like a new cambelt and an AUX fitted, we've never paid this much for a car so are trying to squeeze as much out of the dealer as possible! We bought a nice Ford Estate (sensible, and for our precious pooch to jump in and out easily) but for the courtesy car they've given us a sporty little Hyundai Coupe so that's a bit of a laugh! Well we were laughing until we saw how much petrol it drinks! :eek:
Also this week our heating stopped working so we tried to do something ourselves, to no avail, called out the heating engineer and needed a new oil pump! Gah! £148.00 in total but he also did a full boiler service so that's us set for another year. I bloomin' hope so anyway!

KK xx

pavlovs_dog

kansaskitty wrote: »

Step Four: Pay off your Student Loans
Make overpayments when possible to cut down the student loan as interest is paid on this
Aim: Begin Sept 2014
Reality: We didn't do this at all, although as I completed a PGCE (teacher training) after 2012 I do have a large chunk of it that is at around 6% interest rather than the <1% interest the rest of mine and hubby's is at, so it is something we seriously need to think about. However my husband looks at this like Martin Lewis calls it a 'tax' rather than a loan, it's just something we pay each month out of our wages otherwise we wouldn't be able to be in the jobs we are now (teachers). Unsure which direction we'll go on this one, although with our yearn for this long talked about new kitchen and the car due to be paid off in Sept 2014 I can envisage the kitchen taking priority... eek!

as long haulers on the MF road (we still envisage at least another 12 years on the mortgage, being realistic), I would imagine that by the time we're MF, my student loans would either be cleared, or easily clear-able with the money that is currently chucked at the mortgage on a monthly basis. It is a very low priority for us.

Student loans company have an awful reputation for messing up any payments that haven't gone through PAYE, so if you do decide to make an extra payments, keep very good records of what you've paid and when. (By the same token, I am religiously filing all of my payslips).


Thanks for sharing your steps, plenty of food for thought here

Olderbutnotwiser

kansaskitty wrote: »

Thank you very much! Sometimes I get silly and think we act a bit too old for our age, but if at 24 I'd rather take my beautiful dog on a lovely walk than go out clubbing

Nooooo I had my first daughter at 24 so I didn't do the whole clubbing thing either, it's not my thing anyway. I socialise differently - drink a tad too much a bit too often but have fun:p I also love walking my pooch just back from a 6 mile trek, Poppy thinks it's Christmas with the long walk but I've signed up to walk 26 miles in May on the moonwalk and thought I'd better get moving a bit!!!

Alchemilla

Congratulations on your marriage and on your PGCE.