MF by 30!

StrawberryJam132

UPDATE: As of 30th Dec 2013, I decided to thow every penny possible into my mortgage, in order to be MF by 2020, aged 30! (6 years) :eek: Talk about an impossible task! Wish me luck!:D

ORIGINAL POST:
Hi everyone.I finally bought my own home! :j

It’s been a whirl wind of closed doors. As a 24 year old woman, with a zero-hour contract and four recently missed payments on my credit file, I couldn’t get a mortgage, ANYWHERE! After sweet talking my bank and complaining via their social media website, I finally got one at what I hope Is a good deal (3.44%, 25 yr, 2yr fixed)... The vendors were going through a messy divorce, so six months on and we still weren’t complete. There was no chain on either side... The final straw came when faults were discovered on the house that the vendor refused to pay for. I was at my lowest, I couldn’t afford the possible £2,000 repairs. Then I was told I couldn’t move in until after Christmas...From somewhere I found this strength, I think I had been backed into a corner for far too long, and I demanded completion by a week later. And by damn I got it:T! I must have ruffled the solicitors feathers so much she undercharged me by £480!! (shhhh).

To add insult to injury, me and my partner went our seperate ways a few days after I moved in. I was a love sick puppy, and he a financial savvy **** who confessed he was in love with another woman. I’m ashamed to say, I had come to rely on him to organise my finances, and to calm my anxiety concerning bills etc.

So now I’m on my own, with no prospect of an additional income, an unstable job which I’m desperate to end. No future job in sight. A mounting credit card debt (£960.38). And a shocking discovery of bills. Who knew they cost so much?!

I’m again a little ashamed to admit, I’m still learning about bills, tax, insurance, interest etc. Naïve to say the least. But I put the leg work in on MSE, and end up understanding most things. It will be nice to have a place to write about any problems I’m mulling over, and to get other peoples perspectives. You all seem very skilled when it comes to organising your pennies! That’s why I started this diary. To share and calm my nerves.

I would love to be MF. But alas this is a loooong way off. First I have to sort my emergency fund and my repairs fund etc. I have zero pennies to my name, dodgy electrics in my house and a car about to take its last breath. I don’t have a constant income at the moment, something that is worrying the hell out of me. I’m going to be pretty skint over Dec/Jan. I NEED to find a new job. It’s all making me extremely anxious! But I'm hoping to start making overpayments by June 2014. Realistic?

I really feel like I’ve bitten off more than I can chew! Did anyone else feel like this at first? Is it normal?

If you scroll down, you’ll see my budget sheet and my extremely long to-do list…

Thank you for taking the time to read! Any comments are welcome.

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1200
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1200
Monthly Expense Details
Mortgage................................ 270.7
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 83
Electricity............................. 50
Gas..................................... 50
Oil..................................... 0
Water rates............................. 35
Telephone (land line)................... 15
Mobile phone............................ 12
TV Licence.............................. 29.1
Satellite/Cable TV...................... 0
Internet Services....................... 15
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 150
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 21.25
Entertainment........................... 0
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 831.05

Assets
Cash.................................... 0
House value (Gross)..................... 70000
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 70000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 54400....(270.7)....3.44
Total secured & HP debts...... 54400.....-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Credit Card....................960.38....100.......0
Total unsecured debts..........960.38....100.......-

Monthly Budget Summary
Total monthly income.................... 1,200
Expenses (including HP & secured debts). 831.05
Available for debt repayments........... 368.95
Monthly UNsecured debt repayments....... 100
Amount left after debt repayments....... 268.95
Personal Balance Sheet Summary
Total assets (things you own)........... 70,000
Total HP & Secured debt................. -54,400
Total Unsecured debt.................... -960.38
Net Assets.............................. 14,639.62
Created using the SOA calculator at www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using IE browser.















To-Do List:
[STRIKE]- Find a way to organise my documents.
- Sort Life Assurance - Is £13pm good for this?
- Sort Will - Should I pay for this? Is £60 good?
- Prioritise what to save for first.[/STRIKE]
- Change my address everywhere.
- Sort my dodgy electrics - Find £230 initial payment!
- Change to EDF Energy & finally get previous tenants debt removed.
- Ring Water.
- Get Internet/Phone installed.
- Sort cat's microchip.
- Sort Xmas (Humbug!! I haven't even started. Forget affording decorations!)
- Set up bank cards/saving accounts (Piggy Banking Style).
- Find a job!!!
- Fix shower, leaking kitchen sink & ariel before Xmas guests arrive.

There is more, but I can't seem to find my main to-do list in the tower of papers surrounding me at the moment *sigh*.

StrawberryJam132

Just realised I didn't include my MF plan!:doh:

It's quite simple at the moment.

85% LTV Mortgage: £54,400 (3.44%, 3.99% after 2 years)

Current monthly payments are £270.70. I want to start OP's once I've settled into a regular income. So in June '14 (fingers crossed).

From June-December 2014 - £230pm OP.

Then £330pm OP every month there after. That means I'll be MF in 9.5 years if I stuck with this mortgage, which goes up to 3.99% after two years... Which I won't, I'll hopefully be able to switch to a better deal!

Hopefully I can get a pay rise etc too within a couple of years of the new job, which will enable me to cut the time till MF down again.

Wouldn't it be wonderful if I could say I was MF by age 30? (6 years?)

Big target, but that's my secret aim.

Also, forgot to add in the SOA above, mother helps me with food shopping, hence only £100pm. And I forgot to include £33pm for my sofas.

littlegreenpeas

Hello and welcome.
100% well done for deciding to stand on your own two feet. Have confidence you can sort out your finances, it will just take a bit of time to get your head around it and then it will become second nature. . The more you understand the less anxious you will be.


I would question if you need life assurance, personally I am 36 and never had it. You have other things like dodgy electricity and credit card debt that should be sorted first


If you don't have dependants to look after do you really need a will as a priority. Again personally I would pay credit debt/sofas first or to bits in the house that need fixing. When you do make a will, make sure its from a solicitor, if the £60 is from a solicitor this sounds cheap.


Paperwork can be sorted with bulldog clips or a cheap expanding file from somewhere like wilkinsons/range.


I wouldn't worry about making overpayments on your mortgage until you have a steady job. Although its good to get the mortgage down you need to create a contingency fund first.


Good Luck LGP

StrawberryJam132

Thank you littlegreenpeas

I have my moments of crisis but them I'm back on the positive wagon! Thank you for the well done:beer:

I was wondering as well if I need life assurance... The guy at my bank said everyone has it if they have a mortgage. You don't think I do?... What happens then if I pop my clogs? My mother won't be able to get my house, right?

The will was £60 by a family solicitor, hence the price I guess. He first quoted me £120 inc. vat. Seriously think it's worth putting off though. Money could be used else where. Like towards my dodgy electrics!

I have a quick question for those of you who are possibly looking?

I just found out my credit card isn't 0%. It's 19.94%. I don't know why on earth I had it in my head that if I paid 10% of the outstanding balance every month, I wouldn't get charged interest. Not so, apparently :huh: I haven't used this card properly in about two years. Brilliant.

So, my question is: Save a small emergency fund of £1,000 by end of May. Or use the £250 I'm putting away Feb-May to pay off Credit Card sooner? This month it's £21.63 interest.... I could then get the emergency fund together by end of September...

Any thoughts?

Cheers!

chirpchirp

Is your ex on the mortgage?

Is he paying towards it?

I ask because if he is he could claim half the house even if you're the one who has paid all the mortgage. I doubt the mortgage company will let you have the mortgage in your own name so you may wish to consult a solicitor regarding this. You probably want some form of deed signing the property fully over to you. Is your ex prepared to pay towards it in the short term as his credit history would be affected too if you didn't manage to make payments, that is assuming he is on the mortgage in the first instance?

kirstypark

Hi Strawberry jam, I would be tempted to pay off that credit card first, can you do an interest free balance transfer? If you die without insurance your house would be sold and your next of kin get the proceeds eventually, but after the mortgage is paid off. your mum would not get your house - but would she need it?

Who is your mortgage with? I would make overpayments the last thing on your list, but i have never had emergency savings as i can claim my overpayments back if needed. Finally ask around to see if anyone has old decorations for you - i have 3 boxes up in the loft that are the wrong colours and would be happy to give them to anyone who wanted them - guess i should freecycle them really?

Mrs_Rachel_Trelfa

Hi strawberry jam - just subscribed as I would love to help you with your progress and see how you do.

As others have said a massive congratulations for standing up for yourself. Also a big well done for wanting to understand and take ownership on your finances, its a massive first step and you should be proud. Understanding things will empower you and give you confidence in all your decisions.

Firstly about the life assurance, the guy at the bank is probably on some sort of OTE for offering other products to a customer. Some say its good to have others will say its not worth it as they will find some way of getting out of paying up. Personally with your other commitments such as the credit card and house repairs, I would say hold off and sort the other things out first. You can always look at it again in the future.

Now as for the credit card - don't panic, you have realised your mistake and now is time to put it right. The minimum payment of 10% will mean that you pay more interest and therefore it costs more as its interest on interest. If I was you I would look at doing a balance transfer onto a long 0% card (think Barclays have a 29 month 0%?) Ok you will be adding a couple hundred pound to your debt but that cost is. outweighed byhe interest you will be saving. Now while it is at 0% I would suggest that any spare income you have is split into 3 (not necessarily equally as you may want to put more into one pot than another) and put some to pay the credit card off, some tpaying for the repairs to your house and some to build up your emerging fund (aprox 6 months of all necessary bills and expenditure).

Hope this helps.

StrawberryJam132

Thank you everyone for replying

chirpchirp - No, my ex isn't on the mortgage, thank goodness! I decided to buy a property before we met, and he was saving to buy an apartment in the city. I made sure he had nothing to do with the house. You hear of these stories where someone's partner helps pay the bills etc for six months, and then bam, they're able to claim half of the house! I was cautious when it came to this. Thank goodness!_pale_

kirstypark - Hi ... Now I'm vaguely aware of what a balance free transfer is. Is that to do with the 0% credit cards you can get? (More on this below)... I'm able to claim overpayments back as well. I'm going to take mother to do her food shopping next week, and subtly head towards the Xmas decorations Good idea? haha.

Mrs_Rachel_Trelfa - Aw thank you for subscribing! I agree with the life assurance. That's something for the future. As for the credit card, the minimum payment is 2%. I'm looking into these 0% cards. I tried the pre-apply eligibility checker on MSE and the only card I can get (with 90%) is the Capital One Classic Complete, which offers 0% balance transfer till May 2014, with a fee of 3% of the amount transferred... I was a bit gutted that this was the only card I can get. It's only for five months. I applied for an Argos card a couple of weeks ago too, and got denied :shocked: I think it's because I used the new address on the application, and the previous owners had a huge amount of debt on the property. I know one lot was with British Gas, which I've removed. But god knows what else is still on the property... Anyone know how I go about solving this issue?

Thanks again everyone!:beer:
SJ X

P.S. I have a £600 overdraft that I haven't touched. I guess that was my little emergency fund throughout my move. I'm not sure of the interest and I'm not at my paper work to check... Is it worth using that as my emergency fund for a little longer whilst I pay off this credit card? ... I know it's not ideal, but might be wise? Hopefully I won't have to use it!

P.S.S. I had the free trials with the credit file agencies earlier in the year, around June time. Anyone know how I can get to see my credit file again, for free? ... I'm worried there's something on there that's causing me not to get the Argos card etc... Some mistake? ... Or would it be because I took a mortgage out so recently? Like two weeks ago? ... Also, in the pre-apply eligibility checker on MSE, it didn't recognise my new address, only my old one... Could it be to do with the transfer of my address?... Is it worth me contacting the credit file agencies with my change of address? Thanks!

shala_moo

Hi SJ, what a whirlwind.. it's always stressful buying a house but you seem to have come out fighting. I've also subscribed to your diary and I hope that you reach your goal of being mortgage free by 30, that would be amazing.

Just reading through your entries and made some notes - hope you don't mind..

I agree with the others.. I've never had any life insurance as I don't have any dependants, your mom would still get the equity and I'm sure she'd rather you live comfortably now rather than have loads of money if the worst happened!

Are you on a water meter? This would be a significant saving straight away from the £35 you're paying for rates.

Your elec and gas seem high - but it looks like you're changing this anyway how big is your house? sorry to be nosey but we pay £100 for elec and gas for a four bed detached... which I still think is a bit high but I have an OH that leaves things on a lot! I know other people on the boards pay a lot less.

Also do you have a spare room? If so, could you live with a lodger?

Good luck x

gallygirl

I agree - you don't need life insurance if you have no dependents. As for a will - who do you want to leave your inheritance to? If it's your parents then they will automatically inherit (unless you forgot to tell us about your children ) so you don't really need this either.

Do you have buildings and contents insurance (you must have at least buildings insurance) - there is nothing on your SOA. Same with car expenses. Pet insurance - you really should have that. Plus all the other regular outgoings such as birthdays and Christmas etc. Even if you've paid for all these now you need to include them in your budget. Work out how much you need to save every month then transfer that into a savings account and keep a note of how much is in each little pot. The advantage of doing it that way is that if your car insurance is due but you only have 3 months worth of monthly savings you can 'borrow' from the other pots and hopefully all will be even by the end of the year.

Em, at £100 per month, with mum helping out. you're spending too much on food. Do you cook all your own meals, take lunch into work etc?

Good luck :T.

StrawberryJam132

shala_moo - Hi Thank you for subscribing and for your advice! I always love to get fresh perspectives and ideas, so please feel free to post! As for life assurance, that makes a lot of sense what you said. My mother would much prefer I live comfortably, and like you said, she'll get the equity... To be honest, I haven't rung the water company yet to tell them I've moved in... Bad move I know... Rookie question, is a water meter like the electric and gas ones you can have? (I have these already). I budgeted £35 because that's what mother dearest told me to put aside (Naive)... Must ring water people... I'll add that to my to-do list... I'm changing to EDF. It'll take 4-6 weeks apparently. I have to stay with them for a month before I can request they change my pay as you go meters for quarterly bills. They're the best company (I think) that will change the meters for free... Really hoping this is the case... My house is a four bed mid terrace that's been empty for three years. So it took a good few days of blasting the heating to get any warmth in the walls. Now it's fab. An hour in the morning and two at night at the moment. I want to reduce this to an hour at night too. Does that seem good?... I'm really good at turning all electrics off etc. One good thing about my upbringing... As for lodger, I have someone who wants to move in, but to be honest, since my breakup, I've needed the alone time. I'm not sure I could deal with someone else in my space at the moment. I know it's not the best option financially, but I would find it depressing. I'm not the most social when it comes to my own private space. Does that make sense? Don't get me wrong, if worse came to worse, I'd take a lodger.

gallygirl - Hi :wave: Thank you for replying! Fab info on the will. I had no idea my parents automatically inherit (rookie mistake). That's one thing to scratch off the list then:j As for buildings and contents, I do have this. I paid it in full last month. Same with car insurance and tax. Both paid in full. It's due in June. I've just factored this into my spreadsheet, and I'm putting £50pm a side to cover it. However, I'm thinking about paying my insurance monthly for a year, just till I can get on my feet. What do you reckon? ... I don't have pet insurance. My cat is 11 and most companies charge more for older pets. I've always thought i'd use my emergency fund if anything (pray it not) happens to my cat. Good move or not?... You're right when it comes to birthdays and Christmas... I haven't budgeted those in at all. I'm a little scared to to be honest. I ignored them. Birthdays come to £150p.a. and Xmas comes to £150p.a. for presents and Xmas food. Only two close people in my life, you see. Do you think it's worth dividing the £300 into 12 months, or wait till I pay off the credit card and start it then? The birthdays aren't till later in the year... Do you think £100pm is expensive for food? I'm pretty frugal when it comes to cooking. I like to make soups and casseroles etc and freeze them. I don't buy fast food, or any of these premade meals. I prefer to make things from scratch with fresh ingredients. I could probably reduce it to £20p.w. What do you think? Is this still expensive? £15 if I was very frugal _pale_ Thank you for reading, I know there's a load of questions here

DIARY UPDATE: I nervously used money I had saved from this month's pay to help with living costs next month, to pay £250 of my credit card. I assumed interest is calculated daily, so I thought, the sooner the better. I have enough to live on next month as long as I get paid what I've calculated. So credit card debt, including this month's interest, is now at £732.01 :T Feeling positive and productive after doing that!

I looked at my finances, and if I use my £600 overdraft, and my mother as my emergency fund, I can pay off my credit card by February 21st. That should mean the interest won't be too high. I'm no good at maths, but I think it'll be about £50 in the end. It would make more sense to transfer to the 0% credit card, but I don't know if opening one is the best idea. My bank asked me if I was in financial trouble the other day because of draining my ISA for my house deposit and using my credit card for the first time in two years. It made me feel awful.

I then worked out I can get £1,000 emergency fund together by May 30th. That then leaves me free to start making over payments on my mortgage from June. Although I would love to save for a new car... Hmm... I'm looking at the 0% APR deals... Anyway, that's for another post in the future! At the moment it's all focus on the credit card and then emergency fund. I know it's not my emergency fund isn't a huge amount, it's supposed to be 3-6 months worth of bills etc, which I calculated to be £3,000 - £4,000... But I'm just going to ignore that for a while, until I can get myself sorted. My car is a big worry. I have no idea how I can factor in saving for/paying for a new one. The one I have now might last another year, but I know the M.O.T. will be a huge hit. I was hoping to get rid of it before then (June).

Anyway, I'm waffling now. Thank you to those who managed to read this all. Sorry for boring you :rotfl:

Hope you're all well!

SJ X