Aspirations of Financial Freedom!

Happydays,_gone_away?

Hi all,

1st time poster, long time lurker. Thanks for all the tips and tricks I've put them all to good use allowing me to save in excess of a years gross salary in about 3 years.

In December I purchased 60% of a shared-ownership property with a mortgage on approx 40% of the property, ie I had 20% deposit of the total value of the property. After paying all the fees and furnishing the property I find myself sitting here today with £4,500 in the bank as an emergency fund (the equivalent of just over 4 months of expenses).

I have created a fairly stringent monthly budget (including a reasonable entertainment pot) and feel confident of being able to stick to it. I have worked out I have between £250 - £300 excess every month after all the allocated pots have been filled.

I have allotted £300 per month to be invested in an equal split between my pension and a S&S ISA. (A small start but this is % based and the numbers will grow as the income does)

I am debt free apart from the mortgage - set at 30 years with a min payment of £227 pm.

I hope to remortgage and purchase the additional 40% in 34 months time (at the end of the fixed rate period (2.74%)).

I've already exhausted Nationwide's Flex Direct offer and plan to shift £3000 over to Yorkshire bank next month for the 4% interest rate, and am still grabbing Halifax's £5 pm.

The question I am pondering is what to do with that £300 every month.
Should I look to build the emergency fund up to 6 months expenses (or further) - perhaps through a regular saver like FD, and stooze the cash for 3 years. Or should I start attacking the debt now and start paying double payments on the existing mortgage loan.

I await your thoughts and inspiration.

Many thanks

Happydays,_gone_away?

how depressing

the 1st payment cleared a grand total of £45 from the capital... its gonna be a long road.

I could sit here feeling sorry for myself but instead phoned Nationwide and kicked in the maximum overpayment for next month ... lets see what that does

Secret_Saving_Squirrel

I would use your surplus to overpay. Thirty years is a very long time.....

Thistlewhistle

Hi HappyDays,

Welcome to Diarydom. Looking forward to following your progress with interest.

Don't be too disheartened by that first result - a journey of 1000 miles and all that!

Good luck!

T;)

Happydays,_gone_away?

So hear I sit a month later.

The 1st overpayment has gone flying out of my current account and kicked the repayment into gear. Seeing that second digit recede by one is a lovely thing.

Even better was receiving the letter showing the overpayment had not off 6 months off the end of the mortgage!

However I've decided to scale back slightly on the repayments after next month and create a bigger reserve fund. I am to take the £3,500 upto £10,000 before I attack the mortgage with a fury, I will still continue pushing the overpayments but for now will aim to pay off in 15 rather than 10 years (down from the original 30).

No doubt I will change my mind again in a few months :rotfl:

Thistlewhistle

The important thing is that you're doing it, Happydays!!!
Feels good doesn't it!
T:D

SG27

Happydays,_gone_away? wrote: »

how depressing

the 1st payment cleared a grand total of £45 from the capital... its gonna be a long road.

I could sit here feeling sorry for myself but instead phoned Nationwide and kicked in the maximum overpayment for next month ... lets see what that does

It's hard isn't it! After our first year, including OPs our mortgage only reduced by less than £5000. It's like fighting a losing battle. I transfer an overpayment and within a week it's been eaten up by interest! I find aiming for milestones helps. We are going to break the £100k barrier next month after last month getting to within touching distance only to be wrenched back by the interest!

SuperSecretSquirrel

Since you have £300pm to play with, and have decided that your immediate goal is to boost savings, it seems the first direct 6% regular saver is a perfect fit for your needs With a mortgage rate of just 2.74% this would be a very sensible approach You would lose interest if you were to withdraw funds from the regular saver before it matures in 12 months time, but since you already have some instant access savings hopefully this won't be too much of a concern. Good luck

Happydays,_gone_away?

SuperSecretSquirrel wrote: »

Since you have £300pm to play with, and have decided that your immediate goal is to boost savings, it seems the first direct 6% regular saver is a perfect fit for your needs With a mortgage rate of just 2.74% this would be a very sensible approach You would lose interest if you were to withdraw funds from the regular saver before it matures in 12 months time, but since you already have some instant access savings hopefully this won't be too much of a concern. Good luck

Thanks Sss.

I already have it on the go and it matures in may. I used to have it to build the cash isa but next time I will look to house the payments

Happydays,_gone_away?

Last night I managed to squeeze reduction in my energy bills saving £12 a month... another small step to freedom :cool:.

Come April 3rd I will sit down and see where I am, throw some funds at this years ISA allowance and get set up for the next.

Happydays,_gone_away?

Decided to switch the D/D to the mortgage back down to £300 a month (£75pm op) and set up a standing order instead to let me be flexible with my overpayments... pay day is a week away!