Hope is not an Effective Financial Strategy

LadyWithAPlan

How great you are back and love career no 2

i am self employed for 27 years now and on career number 18 I think and often co mingle a few side hustles - 

sorry re the heartbreak but sub 50k is amazing so I am sure this final push will be worthwhile 

shangaijimmy

Good Saturday morning everyone… The sun is shining which is just teasing us that Spring is around the corner 😀

I may have missing on here but we’ve kept on with our financial journey. We did have a slow down as I moved to the world of self employment as i needed to build in some contingencies. That period of uncertainty has now passed and I’m pretty confident that we can push on.  We now have 10yrs left on our mortgage, but there’s no way it’s taking that long…

We have 4yrs left of this current fix, and I’m plotting that we’ll have approx £20k remaining. At that point it’ll be a decision to pay off with savings and then rebuild savings over the next 2yrs…or to take a 2yr fix and smash the balance to pieces then. So brief overview:

• Diary Payments - 119
• Closing Balance - £47,901.08
• Diary Reduction - £88,592.93
• Cumulative Overpayments - £36,326.26

Targets for 2025/26 (my year end for mortgage is Feb)

• Closing Balance - £40,000
• Overpayments - £2,200

The overpayment target has a few settings; £1,750 is the base, £1,850 is the main target which roughly equates to overpaying the monthly interest and £2,200 is the stretch target.

Im feeling really motivated to get stuck into this. I’d really love to have it finished in 4yrs as I get to 50 that way I can just plan for retirement finances on their own. But if it takes 6yrs then we’ll still be done before Mrs SJ is 50 and I’m completely fine with that as well.

Watty1

Welcome back, sorry about the heartbreaks and the dog but nice change of career I think - a former boss of mine switched to the same and loved it so much he hasn't really retired even though he could.

shangaijimmy

Sunday evening update here. 

I’ve just OP’d our weekly TT pot, which was £6.24. I do enjoy these little OP’s to maintain momentum, and a good way to think of it is that over the course of the year they comfortably add up to 1 months worth of interest 

After a full year now of me being self employed I’m starting to get a handle cash flow. Although I still have that niggly thought that I’ve completely missed the most obvious of bills to pay and it’s gonna take £1k a month off me 🤦🏻‍♂️

I’ve managed to create a nice buffer should I suddenly need some time off, and so time not earning… from the new tax year we have a few decisions to make about where to park our surplus cash. It’s approx £300 a month. My head says to put it in my SIPP, my heart says to OP and my logic says a combination of SIPP, S&S ISA & OP… Overall it’s a lovely ‘problem’ to have 😀

Kids back to school tomorrow thankfully. We always try to get through the Feb half term without using any annual leave, so it always feels like a longer juggling week. This year Mrs SJ ended up on a 2 course so was away for 3 nights, so timing was terrible but some how we survived it. Looking forward to the next break and us having a week off and time in the Lakes.

Jessy103

Good to see you, SJ and congrats on the new job 😀

shangaijimmy

It’s been a great week with 2 driving test passes. I’m really fortunate to get to share those precious few second when the examiner says “I’m pleased to tell you that you’ve passed…”

Money wise Mrs SJ has had her pay award finalised so we did jigging some budgets around. I’ve added an extra £100 to my monthly SIPP contribution as I’m realising more that I can start to release some of my money contingencies now that I’m settled into new work life. Any concerns about having enough work have been quickly settled as there’s such a huge shortage of instructors. 2 learners passed and 2 new ones all sorted and starting next week.

Restful weekend ahead for us as the last few have just been full of parties and evenings out. Calm Time at home is definitely needed 😀

Mortgage payment due out on Monday which means my new over payment strategy will begin… I’m excited 🤣🤦🏻‍♂️

edinburgher

Congrats on the career change @shangaijimmy - I was just about to say reputable driving instructors are like hen's teeth in our neck of the woods!

shangaijimmy

edinburgher said:

Congrats on the career change @shangaijimmy - I was just about to say reputable driving instructors are like hen's teeth in our neck of the woods!

Thank you. It’s the same in our area as well… no shortage of work, it anything it’s a shortage of days and hours to help everyone.

First monthly OP for the next chapter made today. £150 sent across followed by £9.64 which was our card round ups for the week. Great start to the month and superb for motivation 😀

shangaijimmy

Well lots of plotting and financial management has gone on in SJ Towers this last week or 2. I’ve moved our ISA’s and Mrs SJ SIPP to new platforms, and restarted payments into my ISA. I’d stopped paying into it whilst I trained for new working life to build an extra buffer fund in case things didn’t work out… I’ve been meaning to look into how and where we have our investments and was waiting until I’d been 1 full year into new job. So that’s a big job ticked. Transfers have been activated 😀

At the same time we had a grown up discussion about our finances. Mrs SJ said she’s still a little anxious about the whole self employment bit and the what if I can’t earn for a few months due it illness or accident etc… We agreed to target the mortgage and to aim to have it cleared by the end of this current fix, for peace of mind. Mrs SJ said she’d rather us not have the mortgage worry into our 50’s and me being self employed. A very fair and valid viewpoint which has been influenced by recent tough times within her close friendship group.

So the challenge is £47k in 4 years 😀

I have so much spreadsheet plotting to do now… so exciting 🤣

trix-a-belle

Yay, what a target to get your teeth into!
I did the same with my mortgage (then spoilt it and moved house a year after paying it off so needed another one), I probably still have a copy of the spreadsheet if you want it and save trying to generate your own, I think it came from someone on here originally & was very good for playing with lump sums as well as regular monthly amounts