Dot's Diary - MFW as part of simplifying my life!

Dot_Common

Yay I have eBay bids! Still a couple of days to run too. Better dig out my packaging I'd been saving.

I've now got two days off work - bliss - to spend with my boys and my parents who are visiting. They've brought some mini gardening tools for the boys, so hopefully we can all get out in the garden. Though the two year old usually tries to dig a hole in the middle of the lawn...

Dot_Common

Plan for the day - write down all the jobs we still want to do on the house, and start to budget what each thing will cost - including sending it to our builder for quotes.

We moved into this house at Christmas after having a lot of work done - full rewire, new central heating, taking out a chimney, moving some walls, new bathrooms, new kitchen, wallpaper taken off every surface, walls skimmed and painted, new internal doors and re carpeted throughout. :eek: The house hadn't been touched for 40 years! It's our forever home though, it gives us all the space we need, in a location we love.

So we got a bigger mortgage to be able to keep some of the equity from our previous house to pay for all of the work. We still need some joinery done, wardrobes, light fittings, curtains, loft insulation and boarding, plus some storage sorting.

The garden needs a lot of attention too - but it's so cold!!

Dot_Common

Just been reading The Millionaire Next Door, after seeing it recommended in Tilly's diary - my mind is spinning off in lots of directions! It's very much reinforcing the importance of frugality, and not getting sucked into the consumption pattern - and that if you 'upgrade' in one area of your life, then you can end up spending more in other areas to match.

After doing a lot of work on the house, it's easy to look at our pristine walls, new carpet etc and think 'ooh, the sofa's looking a bit shabby' (which it is a bit, 12 years old and withstanding the combined destructive powers of two small boys!) - but even if we succumbed, then I'd start fretting about the other bits of furniture, the rug, another room, etc etc.

And there was some good stuff about living well within your means, not just to have extra money to invest / pay off mortgage, but also to set an example to your children. I do think it will become much more common for children to not have the same earning power as their parents - and I want to make sure my boys can live comfortably within their means, whatever that happens to be.

Lots to think about!

Courgette

Welcome to the boards dot and good luck with all your goals!

Dot_Common

Thank you Courgette!

Right, it's all very well me faffing around with my 'simplify' goals, but I need to get going with some numbers if I'm going to take control of the financial goals. I've been gathering bits of paperwork together over the weekend, and so tonight Mr Common and I are going to tackle the SOA.

Then I'm going to compare what looks possible as OPs and see how this compares to the goal of saving 25% of take-home pay (including my pension contributions). On a rough calculation, it looks like it could be do-able, maybe possible to exceed.

Dot_Common

Ok, SOA is done, :T with a bit of estimating for Mr Common's income.

I'm in the fortunate position of being part of a final salary pension scheme, and have maxed my contributions so that my pension gets calculated on a 1/50 ratio, and so I pay £561 a month contributions.

To top up to 25% of take-home pay, we need to also be saving or OPing £1280 a month, which according to the SOA should be feasible. But just going through the figures in the SOA, where we were just putting in what we do spend in our not-very-tightly-managed way, there is so much scope for reducing our expenditure further. I daren't post all of it, so will just post the significant bits!

Mortgage currently is £1650 a month. Key areas to look at are: food & groceries (think we spend over £550 a month); childcare (£1500 a month, but will drop in September); i need to decide if I'm going to continue having a cleaner (£113 a month). We also need to agree what we want to do on entertainment and holidays this year, to budget accordingly.

But if we overpay by what should be attainable, we should be able to half the number of years before we are MF, at least! :j

Right, I now need to look at setting budgets for all of these areas. Then translate this into an OP target, and then calculate a new MF date.

The thing that struck me is that although we have a good income, and have always lived within our means, we have limited savings or assets to show for it, apart from equity - and that came from having bought our first house in 1999 rather than any heavy savings. In the words of The Millionaire Next Door, we have been Under-Accumulators of Wealth, I fear.

fothers365

That sounds like a really interesting book, I will look into it. Good luck with your plans!

I am just starting on this journey too and need to set out some goals and things to keep us motivated.

Dot_Common

Hi fothers! I think you have started a diary too recently? Will take a look.

Just back from posting off my eBay sales - got a bit caught out underestimating the postage, but the sales prices were enough to compensate.

My youngest has his first session at preschool this morning, and he wasn't very happy at being left , so I am desperate to collect him and hopefully find out that he enjoyed it. I've been through all this already with my oldest, it should be easier this time!

Matt_The_Chippy

Hi Dot

Welcome along, hope you enjoy it here.

It sounds like we are in vaguely similar positions, we have 2 little ones (5&2) and I can do extra contracting if needed. We don't have the same sort of mortgage or income as you guys but its all relative I guess. Anyway, hope it goes well for you.

Dot_Common

Hi Matt, thanks for dropping by - yes, it sounds similar! I think I saw you had a diary, I'll take a look. I think we might be going for a 2020 new end date as well.

An extra reason for doing this is because I don't really enjoy my job - I'm hoping that striving for MF-dom will help me see what I am achieving by sticking it out, or put me in a position when I can say enough's enough and try to go self-employed without feeling like I'm completely messing up the family's finances.