Hope is not an Effective Financial Strategy

A_Frayed_Knot

I actually used to hate the bank holidays only for the reason when the mortgage was due it didn't get paid asap.

Hayfever has hit, but only the sneezing for me, although I did hear, 6 week scorcher on the way, not sure if that's a or

shangaijimmy

A little bit of work for me this morning but that's all. Intentions are for a lazy afternoon with a good dog walk mixed in.

5 days till accounts day posting which is our favourite time of the month and a few money shuffles to savings. For the last 12 months we've 'played' at our S&S Isa with £30 a month going at in to get comfortable with how it works, but now marks the start of our pre retirement/pensions draw down planning. So on Tuesday (delayed due to the bank holiday much to AFK's annoyance) we start by throwing £300 a month into our Vanguard fund.

Karmacat

Wow, thats revving it up several gears at once brilliant!

shangaijimmy

It does appear quite an acceleration but I assure you it is measured and planned. I always intended to start working on this pre-retirement aspect once we had knocked £50k off our mortgage balance.

Initial focus was to reduce our mortgage commitment to a more acceptable level and 2021 was always the goal because of my works funding situation. We've gotten there 2 years earlier than i thought and we are now on a 5yr fix with a good interest rate secured at 1.99%. So it makes sense to use our cash for investments.

There is a huge decision making dilemma towards how we weight our OP's and S&S Isa. We really enjoy seeing out mortgage balance reducing and this gives us immense motivation to keep making wise spending decisions, despite me understanding that its perhaps not the most money efficient tactic. So I considered a 50%/50% approach to our allocated cash. However I'm then conscious that the house will form part of our retirement pot as we intend to downsize and free some money so in theory OPing is both MFW and pre-retirement planning!

In the end I opted for £500 (62.5%) to OP and £300 (37.5) to S&S Isa. Any extra's that come along will go to mortgage.

I'm very open to these amounts adjusting, but it does help me with the decision making turmoils. So looking forward to 2 compound effects; 1 on the mortgage and 1 on our investing.

shangaijimmy

Car tax paid tonight (i hate everything about spending on cars), then rounded up a £5.01 of interest current accounts and promptly OP'd them. Our monthly OP total for May is currently at £492.42. We have 1 more current account to pay interest on 29th so I'll OP that and then round up the rest as a little present to get to £500 for the month.

debtfreeoneday

Well done on the OP's. We have just done our car insurance and I hate spending the money, but did manage to get over £100 off the renewal and hopefully £29 cashback to come as well!

Jessy103

Hi SJ. It's been great catching up on your diary. Congrats on the OPs!

shangaijimmy

We too have car insurance approaching at the end of June so a nice possibility of some cashback there as well, fingers crossed. I keep logging in and checking my new Natwest account waiting for our switch bonus too!

shangaijimmy

Well a quick post whilst having my post dog walk brew, and before i get showered & shaved for a 50th tonight. Have to say I'm not totally enthusiastic given I will literally only know 6 people there and 4 of them live in my house!! But hey ho...buffet and beer I suppose!

A few financial updates. Pension transfer has all gone through and was suprisingly seamless and easy to do. Salary sacrifice was all sorted with my work. Mrs SJ finally got paid and we are now pretty much even again. Just £50 expenses owed for Mrs SJ which should credit early next week.

I then had a thought (and have been cursing myself ever since for not realising) that now we are way ahead on our original mortgage schedule, our level of mortgage insurance was too high. So i've checked and our mortgage balance is ahead of the decreasing term level of insurance cover by nearly £40k! So I did one of those live chat thingy's and have readjusted the policy and the monthly premium has ended up being 1/3 less. As of next month I'll redirect that £10 saved as a mortgage OP. A Nice little bonus to the funds and all helps that snowballing compound effect.

Right Mrs SJ is mithering that we're heading out in 10mins and I'm still on the couch unshaven and in work clothes...

shangaijimmy

Favourite time of the month again :j

Monthly Figures

• Closing Balance - £81,385.38
• Total OP's - £495.34
• Net Reduction - £882.89
• LTV - 36.83%
• % Diary Remaining - 59.84%
• S&S Isa Deposits - £300

Diary Totals - 51 months

• Mortgage Balance Reduction - £54,614.62
• Ave Monthly Reduction - £1,070.87
• Total OP's - £30,191.36
• Ave Monthly OP's - £591.99
• Total S&S Isa Deposits - £2,250
• S&S Isa Value - £2,211.72 (-4.39%)

We've nudged through a significant marker of surpassing £30k in overpayments. I hadn't really noticed/considered this but on reflection its a another huge milestone that demonstrates our commitment to this whole journey. In real terms we have OP's more than 50% of our total balance reduction :j

When looking at our figures there is a drop in OP's to our diary average and this will be the case for the next 5 years as some of our monies usually allocated to mortgage will now go to our S&S Isa as part of our pre-retirement planning. I've reflected this is a new line on my reporting figures as I feel it's too important not to report, and I wasn't happy at this 'missing' money in my reports (plus its my diary and I can do whatever i want ).

I've coloured another brick on my 'house' and am really excited to remain on track to hit the £70k's in July :money: