What do I do with leftover money

chelseablue

Not sure if this the right section but it is technically about saving.


In February we moved into a house, said house needs every room redecorating plus new flooring upstairs, furniture in every room (you get the idea!)


Now then, I've done a list of everything and estimated costs and roughly we need to spend £10,000 getting it all done (this is for EVERYTHING)


On a very good month there is about £1,200 left over, worst case is £900 left over.


My original plan was each month to use:


£400 on work in the house
£400 mortgage overpayment
£400 to my savings account


Of course doing it this way my house would take about 3 years to do.


But today I thought hang on why don't I chuck everything spare on doing up the house then it'll all be done in about a year then I can enjoy my house and start the saving and overpaying


What would you do? Or is there another way I haven't thought of?


Sorry for the long post!

AndyT678

I'd probably use 0% purchase credit cards to do the house now then save enough to pay them off before the promo rate ends.

You need to be disciplined if you're going down that road though!

chelseablue

Thank you, I already have 2 credit cards, I have available credit of about £12,000 but they are not 0%


So I would rather not do anything on credit

Dan83

i don't understand why people over pay mortgage's, if you wanted to pay it off and be mortgage free sooner, why not take it over a shorter period?

My 1st idea is the same as above, put as much as possible on 0% interest or get a cash back credit card. I always pay with credit card for expensive items because of the extra insurence the credit card gives. I know you have said you don't want to use credit cards, but they are easy to get so it is defo worth thinking about.

I'd be more tempted to send the money getting the house to a standard you are happy with before starting to save, and I'd save before I overpaid.

darkidoe

What's the mortgage interest and savings interest? I don't think redoing decorating/furnishing the house is much of a choice as you need to make it a place suitable to live. If this is the only major cost in life at the moment, I would get it out of the way asap. 0% credit as mentioned is a decent plan if your disciplined.

Apodemus

If it is possible to spread the cost and the work over three years, then it is not a case that "everything needs doing", it's a case of you would like everything to be done. That puts you in a very different position - if you simply didn't have the spare cash you would live with it as it is. So, I would go for the save some and spend slowly strategy. The other way there is a risk that when you finish this round of improvements, new ways of spending the spare cash on yet more "must have" improvements will arise and you never will catch up on the savings. You may be made of sterner stuff and stick more rigorously to the original plan, but temptation is a powerful thing!

bigfreddiel

Do you really need to spend £10k on the house? Is this a renovation project? Once the £10k is spent you'll want a new kitchen and bathroom, another £15k! Then you'll want a new car, another £15!

Where does it all end, answer, it doesn't, but just think carefully about what you want, that may save you loads. Don't rush into anything, you have many years to make the house into one of your dreams, rush it and it could end up a nightmare.

Cheers fj

darkidoe

bigfreddiel wrote: »

Do you really need to spend £10k on the house? Is this a renovation project? Once the £10k is spent you'll want a new kitchen and bathroom, another £15k! Then you'll want a new car, another £15!

Where does it all end, answer, it doesn't, but just think carefully about what you want, that may save you loads. Don't rush into anything, you have many years to make the house into one of your dreams, rush it and it could end up a nightmare.

Cheers fj

Sell me a car for £15. I would buy it!:beer:

theoretica

Dan83 wrote: »

i don't understand why people over pay mortgage's, if you wanted to pay it off and be mortgage free sooner, why not take it over a shorter period?

It is often a matter of flexibility - you need to make the fixed payment, you can overpay or not. If you took it over a shorter period there wouldn't usually be the option to pay less.

Also, you might not get the shorter term if the mortgage company thinks the payments are or might be unaffordable.

markwilkinson

I think a compromise is a wise move here but it depends on your ultimate goals. For me, I'm 46 years old and this house will probably be our last. There's no need or desire to go bigger and better. This place needs a bit of updating, but it's perfectly liveable in. We did have new Windows put in and a new kitchen, and decorated ourselves. The upstairs bathroom needs replacing as its a fetching shade of chocolate brown, but it it works. To my mind, it doesn't need to be fully sorted right now. The ultimate goal is to have it fully sorted by retirement in case we feel the need to sell in favour of a bungalow. So money is split between cash savings, investments, mortgage overpayments and foreign holidays.

Hope that helps!

eskbanker

markwilkinson wrote: »

We did have new Windows put in

PC upgrade too?