£35k to £245k to £0...

pinkteapot

Just popping my head back in as it's been a while. New budget is finally settling down post-move, and we've bought most of the big things we wanted to buy for the house. £1,400 a month into the OP pot seems manageable, and at that rate we'll be on track to hit our £14k in 2014 target.

jjadee I'm really sorry I didn't see your reply before - it was shortly after our move.

I set our monthly OP amount using the following process:

1. List out monthly bills (mortgage, utilities, council tax, Sky, mobiles, TV license, insurance... I don't include food and we pay for it out of spends as the amount varies month to month, but you could include it if you prefer)

2. Deduct the total of these from our joint net salaries to see how much is left to divide between spending and saving.

3. Pick a number! We didn't have a very scientific process, and the split between spending and saving was tweaked in the first few months. Bit more on this below though...

4. Transfer the OP/savings amount out of your current account at the start of the month, as soon as you get paid.

5. Key point. The amount that we decided is "spends" goes at the top of a spreadsheet each month. Whenever money goes out (either from our current account or onto a credit card), it gets listed in the spreadsheet and the total runs down. In other words, we don't look at our bank balance to see how much we've got to spend - we look at what's left of this month's spends in the spreadsheet. Our bank balance is always higher as bills or credit card payments haven't gone out yet. Don't be fooled by that!

I'm a spender by nature. Writing down everything I spend, individually, is the only way for me to not over-spend.

6. If anything is left from the spends at month-end, it goes into the OP pot as an additional amount.

I'm no use on food budgeting. I spend about £300 a month in Tesco for two of us which is ridiculous!! Have a look around the Old-Style Moneysaving board - there's loads of brilliant advice in there.

For non-food spends, do be realistic. If you try and make your budget too small, you'll inevitably fail to stick to it. Look at what you've spent over the last few months, look through the individual items and see how much was really unnecessary. Try a month of spending say 20% less, and see how it feels. As I said, writing down every line of spending is what works for me. It also helps us monitor throughout the month how we're doing, how much we've got left, etc.

Last point - think about any big items like Christmas and holidays. There's a couple of approaches you can take. We plan holidays at the start of the year, work out their cost, and then our first month or two's savings go into a holiday pot instead. In other words, we're not actually budgeting for holidays - they interrupt our savings cycle. The alternative is to work out the cost of these over the year, divide it by 12 and set money aside each month (as part of your main budget under step 1). With no kids and small families each, Christmas doesn't cost us much so we just cover it from our spends in Nov/Dec.

Our budget isn't overly frugal, but we've reduced our spends quite well from where they were a few years ago and we do stick to it. If we want to buy something big, we save up money from our spends for a few months, rather than saving less.

gallygirl

Making great progress :T.

pinkteapot wrote: »

In other words, we don't look at our bank balance to see how much we've got to spend - we look at what's left of this month's spends in the spreadsheet. Our bank balance is always higher as bills or credit card payments haven't gone out yet. Don't be fooled by that!

I do something similar in that I never know how much I have in the bank on a day to day basis as that doesn't matter (as long as it's not red :eek:). What I care about is how much is left on the day before pay day - I always know that :rotfl:.

pinkteapot

The life assurance saga continues... By the time we got to the bottom of why our application was declined by the underwriters at the first insurer and were ready to apply to others, DH's poxy consultant decided he wanted to refer DH for tests for another condition that lots of people with his issues have. Now of course we're in limbo again. We can't apply for life assurance at the mo as any insurer we approach will want to wait for the results of the current round of tests.

We are using an insurance broker who specialises in insurance for pre-existing conditions but I'm sure even they're getting fed up with us!

By the time we actually manage to get insurance we'll probably be past the point on the mortgage where we feel like we need it.

Sandstone

Well done on your progress Pinkteapot!
I know you're planning to remortgage to HSBC in August, but in the meantime, I hope your Santander mortgage payments are coming out of your Santander 123 current account? There's 1% cashback to be had (up to maximum monthly mortgage payments of £1,000) = £10pcm, for nothing.

pinkteapot

We don't have a 123 current account Sandstone.

Our current account is a Premier Account with HSBC. We qualified for it a few years ago when we had more in savings. We don't actually qualify currently but they haven't demoted us to being normal customers again. :rotfl:

We're keeping quiet and keeping our current account with them because the mortgage I want to move to in August is a preferential rate for Premier or Advance customers. Our Premier account is free* - Advance is their bundled current account with a monthly charge. I think it's worth forgoing the Santander current account to get the cheaper mortgage rate in a few months time, as the monthly saving on the mortgage will outweigh the cashback we'd earn with Santander.

* free except for the opportunity cost of not banking with someone else - our current account pays 0% interest! I don't leave much money sitting in it.

pinkteapot

Selling old gold jewellery... Who knew?!

Well, looking at the forums and Martin's page about it, everyone except me.

I hadn't realised quite how much the gold price had gone up in recent years. Or rather, I hadn't realised the difference it made to selling old jewellery.

DH has a gold chain that he hasn't worn for a few years as it broke. Weighed it at the weekend and it weighs 7g. Looked online and Hatton Garden Metals seemed to be paying the best rate, so it's being posted off to them today and should get us about £60! We were amazed! :T

Advice on the forums says go around local jewellers first to see if you can get a better price per gram, but for the lazy among us a quick online price comparison is still better than nothing.

So, if you've got old jewellery lying about, it might be worth more than you think!

Also sold some old household bits and bobs over the weekend - things we had at our old house and no longer needed. There's a Facebook 'things for sale' group for our estate which is ideal for low-value bits that aren't worth eBaying. Took £30 and got rid of some clutter.

Sandstone

pinkteapot wrote: »

We don't have a 123 current account Sandstone.

Our current account is a Premier Account with HSBC. We qualified for it a few years ago when we had more in savings. We don't actually qualify currently but they haven't demoted us to being normal customers again. :rotfl:

We're keeping quiet and keeping our current account with them because the mortgage I want to move to in August is a preferential rate for Premier or Advance customers. Our Premier account is free* - Advance is their bundled current account with a monthly charge. I think it's worth forgoing the Santander current account to get the cheaper mortgage rate in a few months time, as the monthly saving on the mortgage will outweigh the cashback we'd earn with Santander.

* free except for the opportunity cost of not banking with someone else - our current account pays 0% interest! I don't leave much money sitting in it.

Hi Pinkteapot,

Yes, but they're not mutually exclusive. You can open a Santander 123 account while keeping your HSBC Premier account.

You can simultaneously have as many current accounts as you like. When I opened my Santander 123 account, I left my HSBC account open. A relative of mine did the same, and kept her HSBC Premier account status (and hasn't been been demoted despite no longer qualifying for it), so I am quite familiar with your situation. Unless there is some further info I'm not aware of, there's no reason why you can do the same.

Anyway, it's up to you of course, but my suggestion is to run the calculations and see if it's worth it to you.
Martin Lewis agrees that it's one of the best current accounts out there because of the cashback and the 3% interest rate making it even better than many ISAs at the moment.

Lois_E

Sandstone wrote: »

Hi Pinkteapot,

Yes, but they're not mutually exclusive. You can open a Santander 123 account while keeping your HSBC Premier account.

You can simultaneously have as many current accounts as you like. When I opened my Santander 123 account, I left my HSBC account open. A relative of mine did the same, and kept her HSBC Premier account status (and hasn't been been demoted despite no longer qualifying for it), so I am quite familiar with your situation. Unless there is some further info I'm not aware of, there's no reason why you can do the same.

Anyway, it's up to you of course, but my suggestion is to run the calculations and see if it's worth it to you.
Martin Lewis agrees that it's one of the best current accounts out there because of the cashback and the 3% interest rate making it even better than many ISAs at the moment.

Absolutely. I still use my Halifx reward account as my main current account, and get the £5 reward each month. My S123 is just for qualifying DDs and earning interest on any spare cash. It's still more than worth the £2 monthly charge.

pinkteapot

2014 review

Overpayments: £14,156

Mortgage balance is currently £230,701. The maths experts among you will notice that it was £245k in Feb, so it doesn't look like we've OP'ed as much as I said. We're currently putting £500 per month into regular savings accounts that pay 8% interest. They run for a year, so when they finish in the summer the money in those plus the interest received will be lump-summed off the mortgage. The rest of our 'overpayment' money is going straight on OPs.

The life assurance saga is finally over. DH finally got a policy with L&G after a year of applications to various companies! Some of you may remember that his medical history meant that most declined to cover him. This is a huge relief as if anything happens, I'll be able to stay in the big house if I want to.

I gave up waiting after a few months and took out a single policy for myself. I've never considered having separate life assurance policies before, but it's brilliant. We're paying £9/month for me, and £17/month for DH. When we initially looked for a joint policy, we were quoted £22/month before any premium load for DH was applied, which it would have been based on the policy he finally got (where they added 50% to the basic premium quote prior to assessing his history).

So, two individual policies cost about the same as one joint one but, if we both die at the same time, both policies will pay out. If we had a joint one, there would only be one payout. If we have kids, this will be nice to know as one will clear the mortgage and other give a nice lump sum.

They are of course decreasing term policies so the payouts will decline over time. And thank to OPs, we're hoping to cancel them in a few years when we've got the mortgage down to an amount that either of us could comfortably take on alone.

Some MSE moments that contributed to the OPs this year:

• Tesco Fuelsave - works brilliantly for us as we do our weekly shop in Tesco, so spend a fair amount in there, but do very few miles in the cars so buy fuel infrequently. We've had the full 20p/litre off most fills for the last six months. :money:
• Me cycling to work, saving about £100 in petrol and parking charges for those days that I didn't drive.
• Remortgaging from Santander to HSBC, reducing the interest rate on the mortgage by 0.5% (same product - lifetime tracker)
• Fewer holidays than previous years, and all self-catering, without a single visit to our favourite 'treat' hotel in the Lake District. Reduced our 'holidays' spend for the year by about £2k. When you're in your dream house, you don't need to go away as much.
• Some great second-hand furniture where we needed things for the bigger house. I got a fab Edwardian style desk for my library/craft room for £50 and plan to renovate it in the summer.

In a non-MSE moment that's added to our monthly budget... This little chap entered our lives.



2015 goals

I've signed up for the MFW 2015 challenge with a goal of £15k for 2015.

If we manage this, in addition to overpaying with the regular savings accounts maturing in the summer, my spreadsheet tells me that come the end of 2015, we'll have saved £15,212 in interest over the life of the mortgage and knocked 41 months off the term (just 15 months into having the mortgage, as that's off the new one since the remortgage to HSBC). :money:

Mortgage-free date at that point, if we were to make no further OPs, would be April 2041, but to hell with that.

Some things I must do in 2015:

• Phone Sky and haggle the ridiculous amount we're paying them for TV each month.
• Sort out switching gas and electricity suppliers - ashamed to say I've never switched as I've been lazy and the process seems complicated! We inherited British Gas for gas and Eon for electricity when we moved here, and I can't imagine they're our cheapest options. Once we have a year's usage stats in Feb, I'll shop around...
• Do some selling - I seem to have a lot of *stuff* and I'm sure some can go.
• Cycle to work more often and save more petrol/parking money than last year.
• Reduce our groceries bill, which is too embarrassingly high to reveal.
• See if I can make some money crafting. I make a few bits and pieces but only for myself until now. I know it's a hugely crowded marketplace with little cash to be made, but I'll give a few things a gentle go.

hillcats

Excellent thread - well done to you both, you've achieved loads !

I personally will be happy when our house is fully paid, which is likely to be around four years time considering our over payments.

We could probably clear it earlier (maybe 2 years) if we wanted to by directing some more cash towards it, but we still live comfortably and enjoy our holidays to the USA too much to do this, plus we have two newish cars to make life easier for us...

We budget properly and agree with the over payments, but we also like to live for now.