Got here by luck, intending to stay by judgement.

solentsusie

getmore4less wrote: »

How do you plan to identify if you will need to use the OD?

I would forget the mortgage overpayment till you have the books balanced and saving a regular amount each month with the target to grow that amount up over time.

Once the emergency fund is sorted then use the savings to overpay.

You need a simple goal that is much closer than 2024, you will just find excuses to delay with 9 years.

You need something like have the £6k saved by Jan 1st and NO new debt.

If you manage that £1kpm then come Jan 2016 you can set your next target

I agree with the above, you need to set some short, medium and long term goals, not go hell for leather (famine or feast) again, and then become disheartened if things don't necessarily go to plan.

Just having a goal nine years away will demoralise you if you can see nowhere in the meantime that you are making a 'win' and you will be more likely to fall off the wagon and splurge on the old credit card.

You need to have some achievements you can work towards and celebrate once the 'I have paid off all my unsecured debt' buzz settles in the dust.

And don't forget to set up the savings account for fun things such as holidays etc. We all need a break and to live a little. Otherwise what is the point in it all?

greenbee

Agree with the need to save the emergency fund before overpaying the mortgage (unless it's an offset or you can draw down overpayments if you need them). Otherwise you end up with an overpaid mortgage and debt...

There also seems to be a consensus that you need two emergency funds. In most cases say £500-£1000 in case the washing machine/car/boiler packs up and you can't pay for it from cashflow. Hopefully you can easily rebuild this from cashflow (if necessary diverting from overpayments while you do so). This would be in instant-access cash savings (but NOT in your current account). If you need to include the cost of flights, then this fund would naturally be bigger for you.

Then a secondary emergency fund - 6 months (or more) of living expenses in case of redundancy/sickness/injury. This could be in a cash ISA or similar. Not instantly accessible, but not locked away long-term.

THEN you can start overpaying the mortgage/saving into long-term savings/investing in stocks and shares ISAs.

It's also worth looking into increasing pension contributions fairly early on, particularly if both you and Mrs B are higher-rate tax-payers and can claim part of the tax back on your contributions via your tax return.

MrBloater

I can see that I really need to open up a few savings accounts to get this thing working properly - a couple of instant access ones for Blown Boiler / Car Prang (c£1.5k) and International Rescue (c£6k), and then a Perfect Disaster one for covering household expenses for a few months in case of a shambles (c10k). Then we have utter peace of mind, then we start on the mortgage.

So my short term goals are now to work towards overdraft neutrality and paying off whatever CC balances occur during the month in full. Medium term goals are to get these safety nets in place within 9 months/ a year, and longterm is still to get the mortgage sorted.

I will have to feed my desire to do some overpayment each month, but this will be a symbolic gesture rather than a hefty lump. Because I'm starting to realise it is all about symbolism - the issue isn't whether the £6.99 a month Netflix subscription is a lot of money or not - percentage-wise it's trivial (at this current moment in time, but I more than most people should realise that fortunes can change in the blink of an eye) but it's the fact that it is there, it is being spent when it doesn't need to be. I am slowly getting my head around all this. I feel that things are moving in the right direction.

in_need_of_direction

Mr B I make mortgage ops with money from tcb, using vouchers and ebay sales or where I don't have a bill to pay. It is small but it ticks the op box for me.

solentsusie

MrBloater wrote: »

I will have to feed my desire to do some overpayment each month, but this will be a symbolic gesture rather than a hefty lump. Because I'm starting to realise it is all about symbolism - the issue isn't whether the £6.99 a month Netflix subscription is a lot of money or not - percentage-wise it's trivial (at this current moment in time, but I more than most people should realise that fortunes can change in the blink of an eye) but it's the fact that it is there, it is being spent when it doesn't need to be. I am slowly getting my head around all this. I feel that things are moving in the right direction.

Yay! Now we are getting somewhere... :j

It is these trivial little spends, that on their own are that, trivial, but when all added together add up to a lot.

Have you ever tried the demotivator Mr B?

http://www.moneysavingexpert.com/shopping/demotivator/

greenbee

Some people just OP the odd pence that are on their bank balance when they log in to do their online banking. It's not much, but it makes them feel they are doing something.

I used to make significant overpayments - then when my mortgage was nearly paid off, decide to move and increase it significantly. OK, so I had a major deposit, but a. my mortgage is 3 x the old one, and b. I can't OP because I'm having to get the house sorted out. I find this VERY frustrating, but there's no point in me OPing the mortgage if it means its longer until I have flooring/bathrooms (I do have bathrooms, but they are grim, and there is no shower)/kitchen. I have, however, kept up paying into my savings, so my emergency funds are intact. Everything I can do from cashflow, I'm doing from cashflow.

getmore4less

Change everything to annual totals not monthly.

Then review the last 12 months

categorise everything with it's total for the year

Then put into priority order with a running total
(you should have the info in the spread sheet)

When the total goes over the income then it is obvious what needs doing.

You have just cut £100s off your interest and charges, where is this money going if you are still using an OD?

getmore4less

Another stratagy that costs nothing and involves no lifestyle changes is look at your waste.

Do a diary of everything you throw out.

Try to stop buying those things.

MrBloater

It used to be that whenever a letter came through from the multitude of CC issuers we had, it was the obligatory "we've noticed you've been only been making the minimum payments for the last 6 months" spiel. Whereas the 3 beauties I've had through today are expressing their sorrow at learning I have closed their accounts. And it's about time it was their turn to be sorry. Wanted to shut down three more store card accounts tonight but don't have the patience to wait for on hold, will do it in some spare time tomorrow. This is the crest, this is what I need to come back and read during the darker times. Can't wait til payday to do some serious damage to the statistics, I feel like I'm at the departure lounge, all packed up and just waiting to get airbourne.

MrBloater

Yikes. Bit the bullet and transferred the last remaining CC balance of mine over to Mrs B's card as they were offering 20% lower interest for the duration of the balance transfer and have chopped up my last credit card. So we as a family are now down to 2 credit cards - neither of which I know the PIN to. I'm getting quite addicted to this credit chopping.