Small Steps Out Of Massive Debt!

GeorgianaCavendish

I remember having to buy everything from scratch when we moved into our old place, and having no idea how much certain things *should* cost either. Hopefully this time we won't need as much, or at least will be a bit more clued in to MSE ways  

astrocytic_kitten

Sorry Georgiana, I didn’t mean to be patronising, it’s been so many years since I last moved house that your diary is helping me remember all this stuff for myself. That £50 went on the credit card and was the start of my most recently cleared debt mountain so i really need to keep a grip on it this time and be more MSE!

GeorgianaCavendish

Oh not at all! I didn't think you were being patronising! It was a good post, it reminded me of all those odd little things that we hadn't even thought we would need but ended up filling up a shopping trolley with on our first proper food shop - it's good to have a reminder of it this time around  

GeorgianaCavendish

Opened a stocks & shares retirement LISA today using the MSE link to get a year with no fees on Nutmeg. The minimum deposit was £100 which I've temporarily raided from my Christmas savings, I'll try to recoup that money over the rest of the year by putting a bit extra in each month. I could have waited until payday this month but to be honest I just wanted to get it sorted and then forget about it. Like I mentioned before, I'm not completely sure how the LISA is going to play into my financial plans but I wanted to at least have the option there. 

I suppose my priorities are : 

1. House repairs (minimising any additional borrowing) 
(1b. Repaying any borrowing needed)
2. Mortgage overpayments (reducing the whopping 30 year term and maximising LTV by the end of the initial 5 year fix)
3. Pension contributions (I'm paying 7%, my company is paying 10%, and my plan has been to increase my contributions by 1% if/when I get a pay rise) 
4. Decoration on house 
5. Extension / kitchen refurb - this is down the line, say 5-7 years, but within the plans 

I guess I can think about how the LISA would fit into those plans. I've got 10.5 years left to make contributions to it, and 20.5 years before I can withdraw from it. My company pension is accessible in (25.5 years), I'm not planning to retire before then but would like to be mortgage-free, and have the option to do part-time work. The mortgage is on a 30 year term (eek!). We can make overpayments up to 10% a year on the mortgage and I highly doubt we will get anywhere near that figure, so it seems that once we are through the first round of repairs/renovations on the house then the best use of any spare money to : (a) increase pension contributions sensibly (b) overpay mortgage / (b:2) save for refurb, and then (c) add to LISA.
I need to talk to DH about his pension (as he's self-employed) and it might make more sense for him to use a LISA to supplement his retirement savings but my company pension is pretty good so it makes sense for me to increase contributions there rather than add to the LISA.

This is a lot of waffle, but trying to sort my head out a bit so that I can concentrate on what needs to be done rather than get distracted by what I think I "should" be doing. 

EssexHebridean

Good idea to start planning. One thing you could do to make an early assault on the mortgage while you settle on what you want to do is to find out if you can simply round the contractual monthly payment up to the nearest £10. That’s a great way of getting started, then any other OP’s can be made as manual lumps. 

GeorgianaCavendish

EssexHebridean said:

Good idea to start planning. One thing you could do to make an early assault on the mortgage while you settle on what you want to do is to find out if you can simply round the contractual monthly payment up to the nearest £10. That’s a great way of getting started, then any other OP’s can be made as manual lumps. 

That’s a good idea! 

GeorgianaCavendish

April 2022 Round Up 

Savings
Start-Up Savings - 100%
Roof Repairs - 84.22%

Extra Income 
Prolific Academic - £58.80
Ipsos I-Say - £20.00 (Amazon vouchers)
TopCashBack - £7.67
Storewards - £20.00
Focus Groups - £79.00
Premium Bonds - £25.00
Interest on savings - £1.64

No Spend Days 
20 / 15 in Apr
Target for May = 16 NSD 

Decluttering Campaign 
22/365 items decluttered (to be updated ... did a lot of decluttering but I need to tot up the figures)

GeorgianaCavendish

The big news this month - we’ve completed! 

Really pleased to have got there with no hitches but also feeling a bit overwhelmed at the size of our project list. The roofers start next week so that will be one thing underway and we can get other people in to quote. I’ll post more about the house stuff as we get working on it. 

I had a good month for extra income, helped along by a focus group and a couple of well paying Prolific surveys in the last few days. 

The NI rise means I’m about £50 a month down, I had thought this would be cancelled out by my tax code change but sadly not the case. I will see what happens in July when the personal threshold rise takes effect. 

I sorted out the Nutmeg LISA and swapped all my stamps (stamps swapping was v easy!). My job for this month is to check and then call HMRC to claim the higher rate tax relief on my pension contributions. I don’t know if this will be backdated? 

Now that the mortgage has gone through, we’ve opened a joint account and I’ve also opened a starling account (laying the groundwork for doing an account switch for the incentive payment). I’m just switching some direct debits over to the starling account so that they can go with the switch. 

Not much else to report for this month, but will have lots as time goes on! I’m thinking about starting a MFW diary but I might wait until we are on an even keel with the refurb work to the house. 

WinterWarrior

Congratulations on your lovely new house 🏡. I wish you lots and lots of good luck and happiness in it xx 

vampirotoothus

Hi you will probably need to complete a self assessment to get your pension contribution tax reclaimed, but you can backdate this as well. Also if you are doing one, don't forget to claim for any professional subscriptions if you pay. Good luck on the houses renovations V x