I've been a mug but now I'm a mfw! Mortgage free by 2023!

snappybadger

LauraJo wrote: »

Good luck on your journey. Sounds ambitious but you'll get the bug and it'll be really rewarding. Worse thing will be how quickly 10 yrs flies by!

Thanks LauraJo! I certainly feel as if I've got the bug and hope that it continues and I can achieve my goal. As much as I want the 10 years to fly by I don't really as I already spend far too much time thinking about the future rather than living in today. And I don't want to miss out on a moment with my son

Today I had another NSD and popped to Mr A to return some clothes I decided not to keep and then to B&Q to return a tin of paint I don't need. I had bought two to paint my shed but have decided that if I only paint the bits I can see (and leave the bits hidden by the fences) then I can get away with using just the one tin! And the bonus is it will be less work So that is £50 in refunds to come back to me - so I paid it off the mortgage!

I then spent a bit of time tidying up my online accounts today so everything is going in and out of just the one account. I had been using a separate account for all direct debits/bills but since they all go out on the 1st of the month it just seems easier to not have to worry about splitting my money between two accounts. The only one I haven't been able to change is my mortgage DD because that's due to come out on the 7th, so I have to wait until after then.

I also tidied up my savings accounts and have decided to move my money from my easy access savings account into my Cash ISA as the interest is tax free. I had to leave £500 in the savings account until 1 July when the bonus is due to pay out, and then I'll transfer that into the ISA too.

Because I'm a director of my own company I pay myself a monthly salary and then take the rest of my income as dividends, in various chunks during the year. I do try to take it all out in one go and stick it in a decent savings account as the interest rate paid in my business accounts are rubbish. But it does mean I have to be very disciplined not to spend the money as it needs to last an entire 12 months. So best to get it working for me in the meantime!

I debated cancelling my Lovefilm subscription, but as it only costs me £4.07 a month I thought I'd keep it going, but as I was looking to see if I could change the payment date to the 1st I noticed there was a "pre-pay" option where you could save up to 15% by pre-paying your subscription. So I paid up for 12 months - saving me £7.33 for the year - it all helps!

Had a text from Santander to let me know that my request to close my 2 Year Fixed ISA has been completed so the cheque should be in the post shortly - can't wait to pay a huge chunk of the mortgage with that

Feeling very motivated and keen to be MF and looking for all the opportunities to make/save more money to chuck at the mortgage account! Wish I'd had my LB moment 5 years ago though - it's frustrating to think of what a difference I could have made in that time :mad:

snappybadger

Still feeling very positive and motivated about getting the mortgage reduced and eventually cleared

I have been reading through many of the diaries on here over the past few days - read through Financial Bliss's one in its entirety and found it very helping and inspiring. Also a very useful guide for creating a mortgage free calculator too which is much more detailed than the online ones I've previously used.

The monthly mortgage payment (interest only) has now cleared and the mortgage balance is currently £119,212. On Thursday I received and deposited the cheque from closing my 2 year fixed ISA with Santander into my current account and I'm just waiting for the funds to become available so I can transfer them across to the mortgage account. Hopefully that will be tomorrow as they were still not showing as available this morning That should make a huge difference to the balance though so I can't wait.

I've been keeping my spending under control and have been pretty good. Although I have just booked us a night away at the end of June so I can take my son to Peppa Pig World with a friend! We were supposed to go for his birthday at the beginning of March but the weather was so grim and cold I decided to postpone. I got a room at the nearby Premier Inn for just £29 so I'm pleased with that and it will mean that I don't have to drive there and back in a single day.

I have also had to pay out £28.75 today for gym class for ds. I don't begrudge it because it's the only paid activity we do and as he was such a late walker and is still quite under confident physically I think it really helps him. That will cover us until the end of July though so hoping next month will be a bit cheaper.

I am currently trying to decide what to do about mortgage overpayments. Ideally I need to be overpaying by about £700 a month in order to meet my target MFD of end 2023. I can't decide whether to pay this monthly, or in lumps in advance. Or even in one lump sum now to cover the next 9 months.

Because I take the majority of my income as dividends from my business I have enough to pay the £6300 now if I want to from my Easy Access ISA account. The benefit of this vs paying £700 per month would be a saving of about £122 in interest on the mortgage and it would also prevent me from missing any overpayments by "accidental spending". But the downside would be that I would have to make sure I live on a very strict budget in order to last until April 2014 on the remainder of my salary/savings.

I think this is doable but as I've never attempted to live without the equivalent of £700 a month before I'm not sure!

The other alternative is to perhaps pay a lump sum worth three months payments (so £2100) now and see how I go over the next few months. Then maybe if it all goes to plan and my budget is fine, I could either pay the remaining 6 months as a lump sum, or keep paying in 3 monthly lump sums.

Paying £2100 now and £4200 in three months time will save about £60 in interest vs paying £700 monthly, and paying £2100 every three months would save only £30.

I should still have a buffer of a few thousand pounds in my ISA in case of emergencies, even if I were to pay the whole £6,300 now which is good and a reassurance. But I'm completely confused and undecided about what to do!

Secret_Saving_Squirrel

Hello,

Very good luck to you. Paying our ops at the start of the month works for us as then we are forced to live on what we have left. So my advice would be to pay it in and save on the interest!

Squirrel

snappybadger

Hi SSS - thank you for your thoughts! I am in agreement that it would make sense to pay it upfront and then I'll HAVE to manage on whatever I have left. I also like the idea of saving the interest....BUT I am worried that although I'll enjoy paying the lump sum off now, I'll have no opportunities to make big/regular OPs for the next 9 months and I think that might impact my motivation! I think I need the buzz of making a regular overpayment lol!

snappybadger

Well the cheque from my closed down ISA finally cleared yesterday so I was able to transfer £11,520.02 off the mortgage bringing it down to *just* £107,692! This feels quite monumental for me as this month is the first time I've ever paid anything off my interest only mortgage and to been able to clear 10% this first month is the boost I need to get started on the MFW road!

My cashback credit card arrived this week too, so I will be using that for as many purchases as possible from now on instead of my debit card. I have set it up to repay in full each month. I wasn't able to arrange payment of my council tax on it unfortunately as the processing fee for credit cards would have cost me more than any cashback I'd receive. It's only 0.5% which was the best rate I could get with my bad credit rating. I will switch it to a better one once my credit rating becomes clean in August 2015.

Spending has remained good with two exceptions:

1) My resolve to not buy any more toys for future birthdays/christmas presents failed miserably when a toy I had a price watch on came down massively in price on Amazon to it's all time lowest ever price - by a long way! It's a gorgeous wooden castle that will make a perfect Christmas or birthday present for my son in a few years time (I know!) and I got it for just £38 when it's normally £55 and hasn't come lower than about £44 ever before. I'm really pleased but the problem will be storing it as it comes ready assembled!!

On the plus side I don't feel as guilty as I should do about spending this money because I did take a wooden garage back to ELC on Wednesday and got £50 of credit. Not bad considering I bought it in November for just £18.75 (50% off plus a 25% discount code)!

2) I have decided to start some training in order to pursue a new career path over the next few years and I have had to pay out to get membership and study materials. Plus there will be a lot of ongoing costs for other study materials and exams. I feel this is a worthwhile investment though as my current business doesn't have longevity and I need something that will see me through until retirement. I am very excited about this new chapter in my life!

As a result of 2) and the extra costs that this will incur I have decided to hold off paying any more big lump sums off the mortgage for now and see how my finances are in a few months time. To keep up some of the momentum though I've set up a standing order to OP £250 each month. And I will plan to top this up as and when I feel I can.

LauraJo

Congrats on your massive overpayment! Feels good I bet ?!
What's amazon price watch?

snappybadger

LauraJo wrote: »

Congrats on your massive overpayment! Feels good I bet ?!
What's amazon price watch?

Thanks LauraJo - it feels fantastic! I just wish I had more ISAs stuffed with spare cash to be able to clear the rest of the balance lol!

I use camelcamelcamel to set up price watches for things on my Amazon wishlist. If you paste the url of the item into their website they'll show you a chart of the price history of the item and you can set up an alert to receive an email when the price drops below your target price. It's fab! But I feel compelled to buy things if they drop to great prices so doesn't always help with being MSE!

newgirly

Hi snappy badger, good luck with your new mf diary. we live off a round £600 pm for everything , it can be done without losing quality of life for the kids but takes planning and a good eye for bargain hunting which you seem to have , best of luck

sweetdaisy

Brilliant overpayment . I use a cashback credit card for every purchase I make and pay it off in full every month. It's surprising how quickly it all adds up. Last year I earned £105 from it.

In terms of lump sums versus small payments, I prefer to make small regular overpayments rather than large ones, as I find that it keeps me more motivated.