Hope is not an Effective Financial Strategy

shangaijimmy

Whilst celebrating the achievement of BusyMee becoming mortgage neutral I think that status may be the thing I need for added motivation. Since adjusting our focus to both savings and mortgage the whole accounts posting and targets are becoming extremely difficult, as progress is so mundane. However aiming for Mortgage neutral...now that would provide some motiavation, plus the need for a new worksheet (and maybe a line graph included!). Am going to muse on this one tonight then spend some time tomorrow on a worksheet and some new targets!

Lets be honest I've got plenty of time as I can't go anywhere!!

Suffolk_lass

I love this idea, with the suggestion that you track your interest paid compared to savings interest made, so you can have that check and balance thing that your money is working harder for you in savings and investments than it is in your mortgage. If me, I should also only include that portion of my pension that I proposed taking as a lump sum - ie the realisable part.

I have gone past mortgage neutrality and it is only the fact I can get better savings interest on the same amount as the mortgage debt, and the early redemption fee that is keeping our mortgage going - I have a small cash ISA for £10k paying 0.75% compared to a mortgage of approx £9.5k charging 0.59%

SuperSecretSquirrel

Hi Jimmy, aiming for mortgage neutral is great, highly motivating!

I used to post a line chart with a line for mortgage balance over time if sticking to the 25 year schedule, another line for actual mortgage balance over time, and another for savings balance over time. Once the actual mortgage balance and savings balance lines cross each other you're home free!

After I was done with that, my new favourite chart became the one plotting 4% of savings and investments over time against annual spending estimates over time. Again, the lines slowly inching closer to each other is a good thing. Once they cross each other (a way off yet) in very rough terms you're financially independent

shangaijimmy

Suffolk_lass said:

I love this idea, with the suggestion that you track your interest paid compared to savings interest made, so you can have that check and balance thing that your money is working harder for you in savings and investments than it is in your mortgage. If me, I should also only include that portion of my pension that I proposed taking as a lump sum - ie the realisable part.

I have gone past mortgage neutrality and it is only the fact I can get better savings interest on the same amount as the mortgage debt, and the early redemption fee that is keeping our mortgage going - I have a small cash ISA for £10k paying 0.75% compared to a mortgage of approx £9.5k charging 0.59%

I am really coming round to the thinkjing of tracking this. I just need to consider fully what to include. For example I know not to include pensions as these aren't ear marked for lump sum. My current thinking is to just include my S&S Isa, as if I hadn't opened it then this money, more than likely, would have become overpayments. I suppose its a starting point at least!

SuperSecretSquirrel said:

Hi Jimmy, aiming for mortgage neutral is great, highly motivating!

I used to post a line chart with a line for mortgage balance over time if sticking to the 25 year schedule, another line for actual mortgage balance over time, and another for savings balance over time. Once the actual mortgage balance and savings balance lines cross each other you're home free!

After I was done with that, my new favourite chart became the one plotting 4% of savings and investments over time against annual spending estimates over time. Again, the lines slowly inching closer to each other is a good thing. Once they cross each other (a way off yet) in very rough terms you're financially independent

I love the sound of this type of spreadsheet, but it may be slightly beyond my spreradhseet capabilities!! I will endeavour to try! Mrs SJ is taking over home schooling for the afternoon with baking/crafts so I have some kid pestering free head time to have a play around.

I have done some notepad calculations and without factoring in interest or growth I think that mortgage neutral will be somewhere in between March 2025 and March 2026. Sounds so much more motivating that mortgage free in 2030!

Busy_Mee

Hi Jimmy. I am glad that sharing my approach has helped.
 I liked the mortgage neutrality goal as it made better financial sense for us (low mortgage interest rate), but also gave us flexibility and control of the money until the end of the term. This meant if there was an emergency, or we wanted to move, or one of the kids needed a loan for a house etc, we would have ready access to the funds. It has also allowed me to wring extra interest out of this capital in the meantime. Enjoy your spreadsheet fiddling this afternoon.

longway2go

Sounds like a great new target. 

lippy1923

I've jumped on the mortgage neutral bandwagon as well. Aiming for end of the year
Gotta love a line graph! I also have one in my spreadsheet which is very motivating.

A_Frayed_Knot

Great news - you found a new way for motivation.  Nothing wrong with changing tactics for now or forever, whatever suits.

However, I do hope you keep up with the brick colouring in, even if you change tactics there and maybe put a border round the brick for mortgage neutral then colour in when normal payments made.

Good Luck with the new spreadsheet.

shangaijimmy

Hmmm...spreadsheet has gone ok, but I'm sure there'll be some adjustments to it. The graphs haven't really worked out as well as I'd pictured, but that's fine. I can survive without them on my first draft. As ever I've made some assumptions with interest rates and so on, but here's my initial key takeaways:

• To mortgage neutral - £68,544
• Projected date - May 2026

Off for a beer and a ponder...

shangaijimmy

Well I've done it again...following on from waking on Tuesday and thinking 'great its Saturday so no home schooling', today I've come downstairs had a brew, had breakfast, watched the news...then went and made another brew ready for the Andrew Marr show thinking I'd see who was on and then go for a dog walk. I then proceeded to OP my TT pot and updated my spreadsheet as it was quite clearly Sunday morning...

Only it isn't, its quite clearly Saturday...its Saturday all day as well! On the plus side it does mean I have 2 days of no home schooling and not 1.