The Spreadsheet Diva's MF Diary

SueP19

Amen to that one my MF compadre

SueP19

What a flippin day, stuck on A1 because radio 2 forgot to mention it was closed, diesel burning away
I been thinking overnight about my emergency fund or severe lack of it. Am not quite sure how to handle it to be honest. I know, I know I should have 3 months living expenses in a slush fund but hey this is a girl who can’t keep a tenner in one so I have little hope of having about £10,000.
Options
Number 1 (my fav) Put a little money aside each week, let it slowly build up. Pro’s manageable, habit forming. Con’s not going to be an EF till about 2017.
Number 2 Take December to add as much as I can to an EF, hopefully that will be about £400
Number 3 (least fav) Not pay any mortgage till a proper EF fund is there £10,000

Did anyone start from a total zilch point, what worked for you???

A_Frayed_Knot

I can only tell you what I would do, won't suit everyone though, so here goes.

Approx £1000 extra/spare every month, with no EF/Savings. I would go for £300/£400 o/p on mortgage, rest in savings/EF.

For this month you mention £400 spare, I would go for £100 to o/p mortgage and £300 to EF/Savings just to get you started/into the way of it. Once you start it becomes so addictive::D

And it will be £100 less that you will never ever have to pay interest on again. (I Must rummage the boards to find out who said that to me - as it was this comment that made me realise that even a £ o/p is £ that the mortgage lender will not be charging me interest on:D:j

SueP19

So Option 4, thanks to A Frayed Knot

Assess what I have and divide 1/4 OP and 3/4 EF...............not a bad idea

A_Frayed_Knot

Only if that works for you, once you have a comfortable EF/Savings, then you can up your o/p's to suit yourself, but once you see the interest charges come down and your mortgage figure down, you'll want to throw everything you can at it.:D

Are you online with your mortgage to see every month what they charge in interest? When I changed to new deal, I couldn't wait to see by how much my interest payments had come down, not quite the same, but by o/p - use the overpayment calculator it will tell you how much you will save on interest just by paying XX over your monthly mortgage:D

lulabelle1

Hello!

If you're able to take back OP's (my old mortgage let me do this) then I would OP everything, knowing that should I really need to, I could take it back....

If not - then I would make very small OP's and save the majority of spare money to build up the EF - perhaps using either a regular saver account or a cash ISA. I would do this for all of Year 1 so that you had a decent little pot at the end of the 12 months

And then, for Year 2, I would increase the OP's and reduce the EF savings (assuming that you'd not needed to dip in to the EF)

And, then just keep doing this for the next few years - slowly increasing the amount OP and reducing the emergency saves.

(I like the idea of saving in an ISA or a reg saves account as not only will you max the interest you receive, but you're possibly less likely to dip in to it).

I think the key is that whatever you do - don't leave yourself skint each month otherwise you'll resent any savings/OP's.

SueP19

No, we have recently been sold to K*nsingt*n by G* M*ney

I have spoken to them and he really couldn't explain how the interest would be recalculated, only to say that my dd would stay the same and my annual statement would explain it all

I do have a snowball though

In fact the whole idea that my mortgage debt could be just sold and passed on to any fly-be-night scared the living daylights out of me.

We are on a BofE base rate tracker but who's to say that they won't up it even if the BofE stays the same. :eek:

SueP19

lulabelle1 wrote: »

Hello!

If you're able to take back OP's (my old mortgage let me do this) then I would OP everything, knowing that should I really need to, I could take it back....

If not - then I would make very small OP's and save the majority of spare money to build up the EF - perhaps using either a regular saver account or a cash ISA. I would do this for all of Year 1 so that you had a decent little pot at the end of the 12 months

And then, for Year 2, I would increase the OP's and reduce the EF savings (assuming that you'd not needed to dip in to the EF)

And, then just keep doing this for the next few years - slowly increasing the amount OP and reducing the emergency saves.

(I like the idea of saving in an ISA or a reg saves account as not only will you max the interest you receive, but you're possibly less likely to dip in to it).

I think the key is that whatever you do - don't leave yourself skint each month otherwise you'll resent any savings/OP's.

Following your diary, love it :heart2:

Do you think I should set a target for EF ??

SueP19

Day 2 update....................spending YUCK

I know listing your spend is another thread on another board but I though it might help me to see where my money is disappearing to as £879 is far from what we have at the end of the month :eek:

B*M raised dog bowl (been looking ages) 9.99, dog coat (xmas pressie-he loathes the rain) 5.99, Address book 1.99 and a note book for spends 1.49

St*re 21 Nightie 4.90 (old one ripped again lolol) calender block for DD 2.00

Total 26.36 but 4 things of my list.................you see I am now thinking how much interest would I have saved.........of to check, will update in a mo

And the answer is.....................£89 wasn't expecting that

lulabelle1

It's difficult to say in regards to the EF, I guess if your monthly commitments are £2,389 - then aim for 3 months worth to get started with. So, £7167.

It's highly likely that you'll find that you're left with a lot less then £879 per month once you start keeping a real close eye on things. It's amazing where the money goes.

Lets assume you're left with £600 per month, which gives you wiggle room. Perhaps OP £100 per month & Save £500 per month for the first 12 months. This will build up an EF of £6000 which wouldn't be far of a 3 month EF target.

Then in Year 2, perhaps OP £250 per month and save £350 per month. By the end of the second year you would have an EF of £10,200. Plus, you'd have OP'd £4,200, which would be fantastic!

Perhaps Year 3 onwards you could continue to add a bit to the EF, perhaps £100 per month and then OP £500 per month. At least this way you'd have a nice little EF built up and you can just continue to add to it..... perhaps even paying a chunk of it as a one off OP towards the mortgage every now and then.

I hope you don't mind, but I took a look at your SOA and have some comments/questions - please feel free to tell me to mind my own business if you like, lol but here goes.......

* £390 on cigarettes - apart from the health implications, that's £4,680 per year. Assuming basic rate tax, you need to earn nearly £6,000 per year just to pay for your cigarettes.

* In contrast, you only save £30 per month for holidays and

*£0 per month for entertainment

So, you seem to be going without any nice holidays and not going out for the odd drink or nice meal, but spending a small fortune on cigarettes. Sorry, I won't go on anymore!!

* I also note that you have a dog (high sided bowl and dog coat) but no pet insurance. How do you fund annual injections? And, what if the dog is poorly? Just a thought, but what about opening a separate savings account to self insure the dog - perhaps put in £25 per month and this can then cover injection costs and also stat to mount up just incase you need it for any vet emergencies?

* do you not have any contents insurance?

* and no life insurance? (Maybe not necessary now that your daughter is an adult, but if something happened to your partner could you pay the mortgage and afford to live?)

*subscription of £44 per month? Do you need this? It's more than you spend on a holiday?

* £35 on lottery?????!!!!!!!

I think you could make some massive savings in some areas but also increase the spends in others such as holidays, entertainment - without these things life can be very dull and I think it's important to get a nice balance otherwise you will resent the savings and overpayments.

I've subscribed to your diary and I really wish you the very best in achieving your goals