Adjusting budget to overpay mortgage

buzzyzoe

Hi all,

I want to start overpaying my mortgage. It's a relatively small monthly amount and by overpaying even a little bit each month, I should be able to knock years off the term.

At the moment, I have all of my money in one bank account (Santander 123) as it gets the best rate of interest, so I try and keep a fixed amount of savings in there that I don't go below.

Unfortunately, what I am doing at the moment is just staying at this fixed amount of savings and not adding to it. I'm hoping that if I set up a monthly overpayment on my mortgage, I should still be able to stay at the fixed amount of savings but will hopefully spend less on frivolous crap as I will have less disposable income available each month.

Just wondering if anyone has done anything similar or has any advice for better budgeting? Or any stories about how great it feels to overpay your mortgage! I have just downloaded the trial of YNAB so will be testing that out to see if it helps track my spending.

Thanks!

lee111s

There's a mortgage free board just below this one - have a look on there. Plenty of ideas about how you can cut back


There's also a debt free board which is more geared towards loan and CC debt but the principles are all the same.

cakeforbrains

You could try taking a look at the Mortgage Free Wannabe forum. There are lots of people there with the same plan as you. There is also an overpayment calculator on this site.

Good luck with it.

libf

I have an Excel spreadsheet of all my fixed outgoings, and I include my overpayment in that, so that I have an amount left over to spend. Usually then divide that by the number of weeks until pay day, and that's my limit per week.

I also try to pay out everything close to pay day so that money I shouldn't touch isn't sitting in my current account.

At the moment I'm actually recording every penny that I spend because I'm saving as much as possible for my impending purchase, but that's a bit over the top for 'normal' circumstances'.

buzzyzoe

Thanks all for the replies!

It sounds like the mortgage free wannabe will be a great place to start.

libf, I want to start tracking every penny I'm spending as well because I'm hoping it will make me think more carefully about frivolous purchases.

At the moment, I'm just buying largely what I like as long as my savings don't drop below my chosen amount, but that's obviously not a good way to manage money! I want to start having proper budgets for each area that I stick to.

libf

Then I would either make your own Excel sheet if you're comfortable with that, or find one online to use.

I've definitely cut right down on just buying DVDs/CDs/books without thinking about it the past few months, and trying not to buy too much with the food shopping.

buzzyzoe

I've just started using You Need A Budget which seems pretty great so far. I'm definitely still getting my head around it but it's starting to make a lot more sense to me.

So if I allocate some of the money in my budget towards mortgage overpayments and then budget every other section according to what's left and try not to go over this, I should have the £150 per month spare for the mortgage overpayments

getmore4less

Best tool out there for budgeting is still MSMoney but if you want instant updating using apps etc you have to look for different tools YNAB seems to be the current popular choice as it is good for those that live to the limit.