Grinding it out to Mortgage Freedom

Pocket9s

Hi All,

Have been a lurker on this board for a while, and finally in a position to start my own journey to mortgage freedom, so thought would do a thread to keep the motivation up!

I'm 34, live in North Wales with Wife (34) and 2 daughters (One 2 years and the other 6 months).

After years of renting we finally bought out first house in 2012. I've always hoped to pay off the mortgage as soon as possible but with moving expenses and new arrivals we didnt have the spare cash until now. Have now got the house pretty much sorted/furnished etc, and have updated our cars from 20+ year old bangers to 5-6 year old reliable ones, so hopefully no big expenses on the horizon for a few years!

I work full time, wife is on mat leave but will go back part time in May. We also have a small side income from playing poker, which can vary but is around £300 a month and not subject to tax (yay!)

Have done an SOA today, not really looking to cut back loads as want to enjoy life as well, but has been useful to highlight areas we might make some "pain free" savings, such as switching phone/broadband provider. If anyone sees any other areas feel free to comment

For reference we live in a 4 bed detached house built 2012, timber frame with good insulation etc. Think my utility bills are fairly normal for the size of house (nb slightly higher this year as wife is at home a lot).

Goal is to make a 1k overpayment per month starting in January (i.e. first o/p end of Jan), with a current mortgage of £119,000 we should be mortgage free in 7 years. Obviously will do our best to beat this if possible!

SOA below:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2200
Partners monthly income after tax....... 1000
Benefits................................ 147.55
Other income............................ 300
Total monthly income.................... 3647.55

Monthly Expense Details
Mortgage................................ 553
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 152
Electricity............................. 40
Gas..................................... 30
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 50
Mobile phone............................ 15 (PAYG - although might need to update phones sometime in 2015 - wife has a £10 phone originally bought to use for a few months, now had 3 years and wants a decent one!)
TV Licence.............................. 12.12
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 400 (Fairly high but wife enjoys cooking and has expensive taste in food! Agreed not to cut this)
Clothing................................ 50
Petrol/diesel........................... 250 (commuting to work 60 miles/day)
Road tax................................ 30
Car Insurance........................... 70
Car maintenance (including MOT)......... 20
Car parking............................. 5
Other travel............................ 0
Childcare/nursery....................... 90
Other child related expenses............ 100
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 6
Contents insurance...................... 6
Life assurance ......................... 12
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 300
Holiday................................. 120 (prob not having holiday this year as difficult travelling with kids but will have days out/short break etc - this might work out less than shown)
Emergency fund.......................... 0 (Have 5k emergency fund saved already)
Work Lottery Syndicate.................. 8 (I know, I know!)
Netflix................................. 6
Poker Training Site..................... 10
Magazines/Newspapers.................... 7
National Trust.......................... 8
Total monthly expenses.................. 2440.12


Assets
Cash.................................... 5500 (emergency fund - 5k in ISA for unexpected repairs etc, £500 in savings acct in case get unexpected bill after making overpayment)
House value (Gross)..................... 200000
Shares and bonds........................ 300
Car(s).................................. 8000 (2 cars)
Other assets............................ 9000 (Poker bankroll)
Total Assets............................ 222800


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 119000...(553)......1.99
Total secured & HP debts...... 119000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-


Monthly Budget Summary
Total monthly income.................... 3,647.55
Expenses (including HP & secured debts). 2,440.12
Available for debt repayments........... 1,207.43
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 1,207.43

Personal Balance Sheet Summary
Total assets (things you own)........... 222,800
Total HP & Secured debt................. -119,000
Total Unsecured debt.................... -0
Net Assets.............................. 103,800

PopcootMFW

Just want to wish you luck. You're SOA is definitely like ours. We're not looking at cutting back much either. The life balance is too important to us. To enjoy little luxuries...just like with your wife having nice food and cooking. Looking forward to see how you guys get on this year. Good luck.

Pocket9s

Thanks, think you will do well, looks like you've put a lot more thought than me into ways to save!

Official start date of overpaying today, all we need to do now is put away that extra 1k by month end, fingers crossed!

velocity_girl

Best of luck, I'm also about to start my first MFW diary in here! I'm hesitant to post a SOA as, like you, don't want to cut things right back to the bone so nice to see someone else who feels similarly!

ourcornercottage

Good luck. With your income I'd just set up a standing order if possible so as to stick to it. I did this in the past when I had a smaller mortgage and I got it down really quickly without even thinking about it (then went and moved house and got a bigger mortgage!)

I agree you don't need to take things back to the bone to make a real indentation into your mortgage. I have a similar philosophy, enjoy life but just don't waste money. I'm saving and OPing every month doing this alone.

Pocket9s

Time for an update!

Jan was a busy month with work, plus went abroad for a stag so not much poker played. Combined with Xmas hangover this meant we only managed £500 o/p for Jan, and mortgage standing at just under £118,300

Have also decided to put away £300 pm in a regular saver at 6% in addition to o/p each month, and all being well pay this off the mortgage when it matures next year. This should be more efficient with the difference in interest rates (mortgage @ 1.99% until base rate increases) plus it gives us an extra buffer should some dire emergency arise

Still going to try for the 1k o/p each month but might be a bit tougher to hit it now!

Have run reasonably well at poker this month so hopefully make the target for Feb! Will update next week once final figures come in

jodles16

As a fellow north walian just wanted to pop in and wish you luck with our journey! And a great first OP made!

Jodles

Firegirl

Good luck!!!!

Pocket9s

Thanks both!

Purplesky_2

Congratulations! Wow! £500! Excellent start

getmore4less

A couple of points on the SOA

Cars, £20pm is a bit low for the mileage being done.
it will cover the MOT and a service each year but I would budget for 1 tyre a year at least.

Allthough not on the standard SOA you need a replacement fund even if you can keep these 2 going for 10years thats £66pm to replace. (allthough you could delay this till later I would combine with the service and up that to £50pm
(cars should not use emergency funds they can be budgeted)

Emergency fund is fine for the unexpected bills but bit a bit low for loss of income. 6 month expences(which are lower if you drop a commute and childcare) is a reasonable min target.
I would also allocate some top up money to keep it going untill you get the budget planning more things so it does not get used.


Finally your SOA had over £1k free pm on paper, this has not happened so you need to look at what was missing from the budget, Xmas overhang put in this years Xmas spending in so no overhang next year, stag event maybe entertainment/holiday needs a bit more.

Cash flow will vary month to month but the trick with SOA is to make them as close to reality as possible and err on the high side for the variable spends in the plan so you are more likley to go under budget and have a bit spare than under budget and have to find the cash from some other planned item.

Why not go for 2 regular savers that's £600pm then have the poker money as a top up as and when which brings the average upto £900pm

Then allocate the rest(without the poker £300 which will be variable) to your living plan.