The Scariest Thing I Have Ever Done....

McTaggus

So, we have officially been in the house for a month last week! Hurrah! Truly love our home, and can’t believe how much of a difference it has made to life and my perspective of it. So much happier here, all of us, compared with our rental property. I think hubby and I have realised that subconsciously there had been a state of impermanence to our lives previously, almost like we hadn’t quite committed to being back in the UK. Now we have our home, we’re both so much more relaxed and less stressed, and both feeling healthier and happier, and suddenly the stresses in life feel a little less stressful (though perhaps that’s because the stress of house buying makes everything feel less stressful by comparison :P )

Sadly, the contributions to the mortgage-free pot have been slightly more limited than I would have hoped, though I’m not too downhearted. After all, it’s only been 5 weeks (and a very expensive five weeks at that!) that we have been here. Unfortunately, due to our LL being an idiot, we haven’t had our deposit released from the DPS yet (though it’s now finally been agreed to be released in full), which means the savings pot is 3K lower than we would have anticipated and other work we have had to do has eaten into our planned OP pot funds that we had started contributing towards before we even moved in. We had two mortgage payments come out during the first month which totalled almost double the usual monthly payment, which knocked us back a little more than planned, and then we quickly realised we had to replace all of the fire alarms with interlinked hard wired alarms (so that kiddies in the attic bedroom could hear if they went off three floors down in the kitchen). An essential for safety, but set us back almost £700 in unplanned expenditure. Add to that expenditure the paint for the kitchen, the lounge, and the work we had done to the dining room (plastering, coving, salvaged Victorian fireplace installed) and it all equates to a very poor month for adding to the mortgage OP pot…

However, now that’s done, hubby and I have firmly set our focus on minimising expenses (as the house is now at least liveable with a colour scheme that doesn’t induce migraines) and have today cancelled a forthcoming trip we had planned for our anniversary before we decided to buy the house, as well as the holiday originally booked for 2016 that we shifted back to 2017. We did lose some of our deposit, but given the money we’re getting back and the fact we won’t have to make monthly payments on the holiday for 2017 (or the cost for the two dogs to go into kennels, or expenditure on food / drink etc. while we’re away) means we can start thinking about what else that money can be used for – including allocating some toward the OP pot for the mortgage (once the fixed term comes to an end so we don’t have to pay interest on the OP amount) and before we re-fix.

In other news, my 123 account is now fully active so I can finally accrue some decent interest on my savings and start earning cashback on my direct debits. Still need to shuffle some of my inter-bank transfer around to make sure everything is covered, and update the direct debit details for my energy provider, but at least I feel like I’m making tiny steps towards getting myself into a position to push forward with the OP plan.

Reminder of my goals:
Current goal: £500 to go to the OP pot pcm for two years - £12,000 to be saved towards the OP pot in 24 months.
April payday savings pot = 0
Total Goal Remaining = £12,000

Stretch goal: £1,330 to go to the OP pot (wherever possible) pcm – ideal stretch target to have £30K in the OP pot in the same timeframe.
April payday additional savings pot accrued = 0
Total stretch goal remaining = £30,000

Next month will be better, I can feel it!

McTaggus

Deposit money finally on its way back! Hurrah! That's 1K towards the mortgage overpayment savings pot! Plus, having just done my dreaded HMRC Self Assessment it turns out the tax man owes me 1K! And I won a tidy 25 pounds on the Lottery - Woooohoooo!

That helps to make up for the shortfall for April!

April Payday Savings Pot = 0
April Other Bonus Surprises = 2,025
Total Goal Remaining = 9,975 (17% of goal met!)
Total Stretch Goal Remaining = 27,975 (7% of stretch goal met!)

McTaggus

God, sometimes I'm such an idiot!

Registered for my online mortgage account today with the Halifax, and also checked out about the early payment charges. Turns out, there isn't interest applied to overpayments just early repayments in full - which is what I thought it would be, but the wording in their letter wasn't particularly clear [x% of any payment made]!!! Now that I know that, I'll be making overpayments every month!!

I don't know, some days I wonder if my brain is even switched on….

McTaggus

Payday today! And goodness, what a lovely feeling! Added smiles in that HMRC refunded my overpaid tax today too, so the bank account had a bumper day compared to usual!

I spent yesterday getting all of my budgets and finances sorted out across all of my accounts, so that once the funds hit then everything should be in place! I now have a spreadsheet to be truly proud of which outlines:

1. Which direct debits are going to keep coming out of my H(ow) S(imple) B(ecomes) C(omplicated) Bills account, as they won't earn me cash back on my new 1-2-3 account;
2. Which bills now come out of my 1-2-3 account, and how much additional I want to transfer into there to put towards savings and OP's
3. How much is left that can be transferred into my regular spending account, as I have always kept this separate to my bills account to be on the safe side!

I have taken an initial decision, as we have only been in the house a month, that I don't want to run the risk of under budgeting anything initially and then finding out I don't have cash to cover things I need. So, I think I will keep note of my "pots" but keep them in my 1-2-3 account for 3 months and make my OP's quarterly (just for the first little while) in case I have massively missed something in my monthly budgeting and wind up short. I know that means more interest, but just want to make sure I have my sums right and I don't leave myself short!

The different pots are as follows (NOTE TO SELF: must write down how to get a £ on this darned keyboard so I don't have to look it up every time!!!):

1. Emergency MUST NOT TOUCH UNDER ANY CIRCUMSTANCES UNLESS I HAVE BEEN FIRED Fund: £8,000 (complete 20 May :j )
2. Buffer fund in case of unexpected short term expenses: £1,500 (complete 20 May :j )
3. First lump sum payment to Bank of Mum for 5 year stamp duty loan: £4,000 first lump sum payment (complete 20 May :j )
4. First regular contribution to quarterly OP pot: £315 (complete 20 May :j )

I'm a little short on my planned OP contribution, but only because I wanted to ensure my first lump sum payment to Bank of Mum was higher than she was expecting, and I'm budgeting to be able to pay her back in full in 3 years rather than the 5 years she's offered to lend it to us over - plus I had a couple of unexpected bonuses this month, so it meant I could contribute more to that pot than I had also planned.

So, MFW goal update after my last post…

April Payday Savings Pot = £0
April Other Bonus Surprises = £2,025 :beer:
May Payday Savings Pot = £315 :j
Total Goal Remaining = £9,660 (20% of 2 year goal met! Rounding up the 0.5% just to make me feel better!)
Total Stretch Goal Remaining = £27,660 (8% of 2 year stretch goal met!)

Now, if only I could have monthly bonus surprises like those every single month!!!!

Looking forward to seeing the monthly account scrape too, to see what cash back I have been able to net to add to the shiny new pot!

jodles16

Howdy there! You have some amazing plans for the OPs so far, I am sure you will find the extra you need and reach your target!

Jodles

McTaggus

NUMPTY ALERT!! :eek::eek:

Again, I come to the realisation that I'm still a MFW newbie, and clearly I haven't thought this through nearly as much as I thought I had - despite all of my pretty spreadsheets and extensive planning.

The target of £32,000 in 2 years remains, however I had neglected to take into account my existing payments mortgage payments and their contribution towards this sum. I know…. duh….. serious rookie over-excitement at OPing the mortgage error

As such, my goal isn't quite as daunting as I thought it was! Having run through the numbers, and taking into account the amount of my balance that will ALREADY be repaid via my normal monthly payments, it turns out an OP of £550 per month would get me to my end-goal of being at 90% LTV ratio in two years - in time for remortgage.

Idiot.

Anyhoo… onwards and upwards from here! At least I have made a better start than anticipated!!!

Regular OP direct debit now set up to come out monthly to the tune of £500, so that the interest can come down each month - as I realise quarterly isn't actually going to prove as efficient….. AND I will make lump sum overpayments as and when I'm able to from my sweeps from other accounts and unexpected bonuses:

• £12 earned through my new 1-2-3 account credited yesterday (account fee already deducted)
• Listed a sofa and coffee table on Schpock today, rather than simply being lazy and dumping at the tip / giving away for free
• Hubby now onboard with the OP mission and currently going through all of the kids rooms / our stuff and seeing what else we could list for sale to contribute to OP's each month
• Hubby also now seeing if he can find ways to scrape from multiple accounts, and contributing to the OP pot

Glad to have him onboard with my mission, now I've been through all of the revised numbers with him! Hopefully between us we can get there!!!! :beer:

That's all from Maison McTaggus this evening - hope you folks are all well!

McTaggus

So, my plan had been to dedicate whatever I had left at the end of the month into topping up the OP's but month 1 of trying to do this properly, and I have realised what a difficult balancing act that can be…. particularly when you strip ageing wallpaper from a wall only to discover that the plaster underneath is in an appalling state - which is probably why the last owners decided to hang paper in the first place. Instead, it's a balancing act now between what I can make as regular OP's (now being paid by monthly direct debit to make sure it gets paid), what I need to put into the house, and what could be left over and used for future OP's.

Reviewed my mortgage statements too today, the interest debited against the account monthly is horrific reading, but I do realise there are two sides to what I need to achieve and that I need to tackle them in a balanced manner - making the OP's, but also re-investing in the house to help build value also. I've decided I'm going to take the call on a monthly basis, depending on what is left and what's needed to be done to the house - after all, we bought this place because it needed a lot of work to make it fabulous again, and we still have that goal for the future.

So, month 1, my left over cash (after the OP) went into getting a large part of the garden re-planted given it had gotten well out of any semblance of control before we moved in. I have also re-landscaped (I say "I" - hubby and I) a dead corner of the garden to create a small zen japanese style garden near the pond in the back, complete with symbolic stream It was a fun creative outlet - even if it did cost more than I had planned. Month 2, I think, will likely mean that any spare cash at the end of the month will need to go to re-plastering the hallway and front room as I'm pretty certain the plaster in those rooms is as bad as the plaster hidden in the dining room…. I'm not even going to begin to tackle the bedrooms in the older half of the house yet, kids bedrooms and our bedroom room will need to wait I think….though the two bedrooms in the newer half of the house shouldn't need so much work (I hope!)

McTaggus

Our house was built in the 1870's and started out its life as a lovely little Victorian cottage next to an attached workshop. The workshop was bought and converted into two separate smaller houses by a developer some 20 years ago, when the last remaining member of the family who had owned it since it was built died. The previous owners of the cottage bought one of the two attached properties, before the developer got too far with the conversion, and re-attached it to the cottage - knocking through in a couple of places to extend the existing house. So, we have an older half of our house, and a much newer side.

The good news is that the newer side of the house needs much less in the way of renovation, as the developer had laid all the ground work, however the older side of the house is filled with decorative history! The first mission was the dining room which, on stripping back several layers of wall paper, presented us with plaster that we had no choice but to rip out and start again with. The kitchen, thankfully as it was a later extension, proved less of an issue and was simply a repaint job (though I'm still debating whether its worth ripping out the tiles and getting it retiled, or just waiting a couple of years until I can get the kitchen done).

Having been distracted by the garden in recent weeks, we turned our focus back to the house this week - starting, not by choice, with my eldest step-son's room. I say not by choice, he decided to get started on removing the wall paper in his room one evening to help expedite the redecoration process. It's not a problem, in that the room only gets used by him normally, but it does mean we have found yet another room that looks like the plaster has popped - and which is covered in a weird turquoise rubbery film of paint…. I was hoping perhaps we would be lucky and it would be sound, but it looks like it's going to have to be stripped and started again from scratch. However, it's not a priority room for focus, given we need to relay floors throughout the whole of the downstairs of the house, and there's no point us doing that until we have redecorated. So, for now, his room will be put on hold - though he can continue stripping it when he's here as it's only half done so far…

Last night I took the plunge and started peeling the outer covering wall paper from the hallway - even with the lining paper, I have to say it looks SOOOOOOO much better Then, it was onto the steaming to remove the five layers of lining paper - just to find out that underneath that was a layer of the original vinyl wall covering, which had been painted over with white paint. It's such a shame the last owners painted it - would have loved to have been able to see clearly what it would have looked like and tried to figure out the age of it! It's a !!!!!! to get off though, but I'm not afraid of a bit of hard work! On the plus side, I was over the moon to find out the plaster underneath is sound - like, completely sound, not even crumbling. It was such a relief I actually danced in the hallway

So, here's to hoping that the hallway will cost lest to renovate than I was worried it would, and that we can get it sorted faster than we were worried would be possible.

Also now need to start looking at the condition of the walls in front room - we call it the Quiet Room because it's so peaceful. It has beautiful bay windows that open out onto a small water feature in the pond in the front garden, and also has a door that leads out into the conservatory. I assume it used to be the sitting room, before the house got knocked through to next door and a huge new lounge space became available. Fingers crossed it's also in reasonable condition… will update later once I've stripped a small section and can see what's behind it!

Our OP cookie jar is almost full too - any coins go in there, no matter the denomination. Once Cookie is full (he's a blue alien thing eating a cookie, doesn't sound cute, but it is) we'll get it counted and take it to the bank to OP against the mortgage Every little helps! Also need to do my Santander sweep soon, and add that to the pot!

Next mortgage statement coming out soon, hoping to start seeing small impacts on bringing us down below the 500K threshold!

McTaggus

I bit the bullet today, and started really analysing my spending. I have a really good salary, I'm extremely lucky that my hard work has gotten me to where I am today, but I hadn't realised quite how much the old adage is true - no matter how much you earn, you always find ways to spend it. And goodness, I have over the last 12 months.

I guess, before we bought the house and committed to being properly back in the UK for the foreseeable future, I still had a feeling of impermanence here - and that's filtered through to everything I have done over the last 12 months and even before that (and everything I have spent). A part of me looks back and thinks "but I earned it, and the right to be frivolous" - and it's not like I was stupid… I saved enough to pay the deposit on the house myself (without contribution from my wonderful husband) and I saved enough to make sure I have my emergency fund in place and limited debt (until I took on this terrifying whopper of a mortgage). But… and here's the huge BUT that is making me feel a little like I've spent 12 months with my head in the merry spending sand… what could I have achieved financially if I HADN'T been frivolous?

Hindsight is a wonderful thing, and honestly I guess there's no point beating myself up over it. It's done, and what's done can't be undone. Moving forward though, I need to change my thinking. There are no guarantees in life, and no guarantees that my income is going to remain where it is forever (if indeed even for the next 12 months with so much uncertainty in the world). The worst thing is that I lose what I have now, and then spend the rest of my life regretting that I didn't put everything I could into ensuring my financial security for the future at a time when I'm actually able to do so.

So yes, taking the time to bite the bullet today has meant I have been thinking deeply about my spending. My disposable income, as I used to think of it, will no longer be considered "what's left after my bills, OP's and savings contributions". Instead, I need to set myself a budget each month as my "spending fund" and allocate the rest to a different account - which can either go to the mortgage or the renovations over time. I'm not going to kid myself, I still would like to be able to treat my husband and I (off to Italy on Monday for my birthday and our anniversary!), but I need to rein it back in and get my head back into the real world - after all, it was only a few years ago that hubby and I used to have less than 200 quid a month left to cover anything outside of household bills. A LOT of hard work got us out of that situation, but it hasn't left me - though I have clearly had a short lapse in my financial sensibility, which I'm now going to put right. Not just for me, but for our own future security.

So, this is my pledge and my commitment. I won't quantify it, because I know I'll still have spendy days, but I will commit that I will take a long hard look at what I spend, where, and why. A new sheet has now been added to my planning work book - log my spend, categorise what it was spent on, and categorise it as a need versus a want. The tally of each over time will reflect my performance on that commitment - and free up more cash to help me towards my financial freedom goals.

Good grief, Ms. McTaggus, why didn't you have this financial freedom epiphany years ago?????

bettyboo71

I have just read your whole thread and want to congratulate you.
I suspect that the size of your mortgage and your monthly income means that you seem to be in a different world from the majority of forumites. However, I do think that the most important thing is that you are having this epiphany before you need to , before something bad happens. You are looking ahead, and planning for the future uncertainties, and you are changing your mindset accordingly. Congratulations and good luck!