Got here by luck, intending to stay by judgement.

getmore4less

c) have fixed a rate of 3.19% until Sept 2020, d) are only paying £265 a month more for the mortgage than we were before

£50k @ 3.19% is £132pm interest.
£50k @ 3.19% £265pm is a term of around 22years

if we use a modest rate on average for the pre consolidation of 15% the interest would be around £625 if we use 20% then £833 and that is before the late fees etc you say you were paying.

That would now pay off the £50k in 91m - 66m for no extra cost and if the estimates are low you could have the £50k cleared before the fixed rate is up and still have reduced your previous mortgage(by around £32k).


What is not clear is if the new rate is higher or lower than the old rate or if you changed the term of the mortgage.

based on the data and some guesses your regular payment was around £1k-£1.1k so adding to this just the money you were spending on interest and fees so NO change in the rest of the spending you will make serious inroads into the debt over the next 5 years

Get that sorted first, get that money going into the mortgage before it gets spent somewhere else.

MrBloater

Will briefly step away from my promises to not mention figures, as it's only fair to give GM4L some meat to put on the bones.
- Mortgage term was not extended
- New mortgage interest rate is less than what we were on (Scottish Widows SVR)
- In May £1900 was spent on minimum payments, overlimit fees, overdraft fees (these included the likes of Aqua and Next - so we're looking at interest rates in the mid 30%s)
- There are now no loans whatsoever other than the mortgage

- There was no budgeting like I see on all the SOAs. We didn't have set figures for food / entertainment / petrol etc. All spends just went back onto the cards - i.e., paying off on Card X £400 in min payment & overlimit fees and then putting £300 back on it again over the month for the shopping, then going over the limit again when the interest got applied, then repeat until ad naseum. Unless it was a new card, and we kept them in better shape until they raised the credit limits to a decent rate. On the 11 credit cards alone, the available credit limits we had totalled £55,800.

Typing this out really crystallises to me what a mess we were in. The only saving grace was paying the mortgage and living in an area with decent house price inflation. As I said in the title of the diary - here over on MFW by luck. If we hadn't got on the housing ladder or were in another part of the country, we'd have stayed rotting in DFW purgatory forever.

Igamogam

MrBloater wrote: »

If we hadn't got on the housing ladder or were in another part of the country, we'd have stayed rotting in DFW purgatory forever.

You would have a smaller mortgage and a whole lot more for it!!!!!!!!



Same profession here and probably similar family income I would guess...we could not afford to live in your part of the country but then we are closet yoghurt knitters even the ex Londoner OH:D

getmore4less

MrBloater wrote: »

Will briefly step away from my promises to not mention figures, as it's only fair to give GM4L some meat to put on the bones.
- Mortgage term was not extended
- New mortgage interest rate is less than what we were on (Scottish Widows SVR)
- In May £1900 was spent on minimum payments, overlimit fees, overdraft fees (these included the likes of Aqua and Next - so we're looking at interest rates in the mid 30%s)
- There are now no loans whatsoever other than the mortgage

The key here is that if you separate out from the min payments the interest and fees that will be a good estimate of the freed up cash flow to cover the increase in mortgage payment and what is left needs to be going to mortgage or savings to cover the less regular bills when they come in.

If you have the data in your spreadsheet of what needs paying when then a cash flow forecast should be possible.

If you use a tool like MSMoney this will do it for you once populated with the data(but that takes time).


I strongly recommend you do a review of the last 12months using your existing data(now you have it you might as well put it to good use).

That will be a good estimate of the next 12 months except there will be a big chunk that was interest and fees not on each months list.

At a minimum you need to look at rough cashflow each month to see how much any big spends will take you over income so you can save for them.

Start with July it is not far away any bills due that are not monthly paid need cash flow.

Another thought, do you have things like insurances paid monthly, if you do check the interest rate,

Looking at my car insurance(direct line) it would have been 23.6%

Another hidden saving/high rate is things like line rental on phones when there is a discount for paying up front.

This can be a big saving, virgin it is £16.99pm or £164 up front

thats an APR of over 40%

With this new free money there may be ways to make more of it just by paying things up front.

Goldiegirl

MrBloater wrote: »

- There was no budgeting like I see on all the SOAs. We didn't have set figures for food / entertainment / petrol etc..

So are you now going to set yourselves budgets for these things as part of your SOA (which you don't have to post here)?

MrBloater

I should know by now that every time I mention the flipping shed on a diary posting - the universe sends a clear message to plague me with some trauma from that wooden box of hell. As I'm trying to get the whole family on board with this healthier living / healthier spending philosophy, the idea came about to put the cross-trainer in my daughter's room. She's already the Sporty Spice of the family, and it would mean Mrs B is way more likely to use it as well. I don't know what was different this time, but the last two times I'm lugged it from shed to first-floor bedroom it hasn't hurt as much. It was like struggling with an obese metal octopus, everything kept moving around (mainly downwards towards my feet) and I am battered in bruised in places where I thought the nerve endings had died years ago. Ten minutes later my daughter and wife both concurred that it was the wrong colour for the room. It has too much black and blue on it (much like my torso and feet). Today I am digging the pink paint out of the shed, it's staying in that room like it or not. Doing repeat battle with that octopus down the stairs, where it will be aided in its evil by gravity, is (much like finishing off decorating the hall) something to be left for another day. But it has cleared up some more room in the shed, and my son was so inspired by seeing the plastic tubs of sellable stuff in there that I never quite got round to listing, that he managed to produce three carrier bags full of stuff from his room that I could also sell. This appears to include his school trousers. And this morning I get woken by a chirpy notification from ebay that I'm eligible for 75% off fees for listings today. So thanks family, thanks ebay - looks like it's going to be a simply wonderful day of limping and listing. Happy Father's Day to me.

pavlovs_dog

have you considered doing a car boot, using a facebook selling page or gumtree to maximise your profits by avoiding fees etc.? Unless you have speciality interest items (Adam Ant Visor here's looking at you) you should be able to get just as much by selling locally.

getmore4less

MrBloater wrote: »

looks like it's going to be a simply wonderful day of limping and listing. Happy Father's Day to me.

Your time would be better spent doing a cash flow analysis.

mark55man

Hey Mr B- could have been me 10 years ago

I know some on here (and it is good advice) want you to strategically and immediately change your ways - but the emergent method of gradually tightening and tightening your spending and reducing your lifestyle commitments does work

It just takes longer.

As HR tax payer with <50% LTV on the mortgage - it always felt I was playing at being a DFW because if I sold up I would be way +ve - so there was a seriousness missing from my efforts as it wasnt life or death. However, that is a false hope - you are denying your later self the benefit of those savings. They may be critical to you in later life

do I wish I had made more abrupt and significant changes early on - YES
did I get there (as in on the right road / not DFW/MFW) in the end - YES
could I have done it cold turkey - NO (not sure)but I certainly could have accelerated the pace

You are pulling in the rope, every day week month will see a decision - you need to be relentless in choosing the low road and not the high road (high cost, high extravagance, ...). Sometimes you need to realise you shouldn't be on that road at all and just stop

Respect my friend, for all you have done and strength for what you have left to do

Keeping_Motivated

Mr B I know you are on here for support with your finances but I can't help but wondering if you need support with saying the word 'No'...