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PinknSparkly's Mortgage Wannabe savings dairy

edited 30 November -1 at 1:00AM in How much have you saved?
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  • savingwannabesavingwannabe Forumite
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    Well done on the vouchers for nice meals. I didn't even know you could get paid for reading emails I hope you enjoy the money. Fab. Every bit helps.
    Trying to be frugal 18/31Jan; 15/29 Feb 26/31 March 23/30 April 18/31 May 20/300 Jun NSDs.
    Saving change in money box.
  • pinknsparklypinknsparkly Forumite
    496 posts
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    I've not visited MSE for a while so am checking in. I've just seen a post on the mortgage free wannabe forum (I LOVE that forum, I can't wait to be at the point of exchanging my savings for a gigantic mortgage and be needing to pay it off - it sounds very masochistic written out in black and white!) that got me thinking. The poster was asking about whether or not she should overpay her mortgage, or if there was a better way to achieve her plans of selling up and moving out of london in 5-10 years time. It got me to pondering whether my view on houses and house buying is somewhat different to that of other peoples.....

    I've always taken the view that I have to pay for a roof over my head, whether it's for rent or a mortgage. Therefore, if the total amount spent on buying a house (fees, stamp duty etc) plus the total amount paid in mortgage INTEREST over the minimum amount of time for which you intend to stay in the property plus estimated total costs of NECESSARY repairs to the property minus the total amount of any income you get from taking in a lodger/renting out a driveway etc etc is less than the total amount spent on renting an equivalent property for the same period of time then buying is a no brainer.

    Then on top of that, the repayment part of the monthly mortgage payment is essentially you paying into a savings account (albeit, one akin to a 5 year fixed term bond that you can't access).

    The longer you stay in the property the cheaper the monthly cost will (probably) be, since the interest will be lower and the total amount spent on purchasing the property is averaged over more months. But you will also have more repairs to make! On the flip side, if you are renting then you have to pay out well over £1000 each time (in my experience) you move house simply to be allowed to move in so if you move frequently, that would probably cancel out the cost of any repairs needed for a property you owned.

    I realised that I've never banked on house prices rising, simply that long term buying works out cheaper (and more secure) than renting. I do however, also ignore the risk of house prices decreasing since I would only consider buying a property in which I'd be willing to wait out any price crash if necessary. Any price increase would simply be a nice bonus!

    Running some numbers through the MSE mortgage calculators, even an interest rate of over 5.5% we'd still be financially better off buying a house for five years than renting. On top of that, we currently have a lodger who wants to continue living with us long term who pays us £500/month. Assuming we didn't increase it at all, we would remain financially better off buying than renting on an interest rate of over 7.5%
    MFW2020 challenge #99: £2,367.60 / £3,600
    MFiT-T5 (Jan 2019 - Jan 2022) challenge #99: £13,363.81 / £30,000
    Initial MF date (18th Dec 2018): Jan 2054 Current MF date: Sep 2051 :D
    Last updated: 31/05/2020
  • savingwannabesavingwannabe Forumite
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    Hello, good to see you posting. Smart thinking. I agree with your analysis but it will feel harder sometimes as the grass always seems greener on the other side. For example, when a pipe bursts and you have to pay to sort it.

    I don't regret buying my house and feel v fortunate sometimes though I do feel it's a bit of a millstone but then I remember it's for life.
    Trying to be frugal 18/31Jan; 15/29 Feb 26/31 March 23/30 April 18/31 May 20/300 Jun NSDs.
    Saving change in money box.
  • pinknsparklypinknsparkly Forumite
    496 posts
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    Hi everyone! So the end is FINALLY in sight for my PhD, and I will be submitting my thesis in the next week or so alongside starting paid employment again on Monday 5th February :):):):)

    Once my thesis is in, I intend to start being a lot more aggressive with my savings plans, and to try increasing my income as much as possible (currently I'm considering a number of things including stoozing, matched betting and opening a few bank accounts for the welcome offers). I want to start investing for our long term future so my plan is that any additional money I make on the side will be invested. I'm interested in investing in dividend paying stocks and low cost tracker funds but I need to do a lot more research into that first! And the additional money I make from my actual job will go directly into saving for a house deposit (and going to America in the summer for a wedding and festival, woop woop - it'll be our first holiday ANYWHERE in over two years. I guess it counts as our honeymoon as this coming Tuesday will be our first wedding anniversary!). I need to sit down and do a proper working out of where we are at in terms of savings, as we've had to use some of our savings recently to get us through the period of me being unemployed (i.e. studenting!). But onwards and upwards!
    MFW2020 challenge #99: £2,367.60 / £3,600
    MFiT-T5 (Jan 2019 - Jan 2022) challenge #99: £13,363.81 / £30,000
    Initial MF date (18th Dec 2018): Jan 2054 Current MF date: Sep 2051 :D
    Last updated: 31/05/2020
  • edited 29 January 2018 at 9:49AM
    savingwannabesavingwannabe Forumite
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    edited 29 January 2018 at 9:49AM
    Hurrah for nearly end of thesis and for getting a job. Marvellous news.

    Oh yes Sinking Funds are those expenses Dave Ramsey says we can plan for eg. Christmas, insurance, holidays, medical fees. If we save in advance for these they will not catch us out when they eventually occur and we can continue to save or pay off debt without problems.

    I don't know anything about stocks and shares other than they are a risky I would avoid them until I had more savings? but that is my personal opinion. It's great news about your holiday. Something great to look forward to. Happy Anniversary for Tuesday. Hurrah.
    Trying to be frugal 18/31Jan; 15/29 Feb 26/31 March 23/30 April 18/31 May 20/300 Jun NSDs.
    Saving change in money box.
  • pinknsparklypinknsparkly Forumite
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    Thanks SW, turns out I do have sinking funds already then! I just call each fund by what I've allocated it to (e.g. car maintenance/insurance etc).

    And yes I agree with you completely about stocks and shares being risky, but on the other hand the longer you hold them for the less risky they become as they've got more time to recover from any nose-diving! That's why I'm only intending to put "extra (i.e. made on the side)" money into them to start with until I get a feel for what I want to do with it. In an ideal world I'd love for us to not *have* to work and to be able to retire early (I'm 31 at the moment so this is quite a long way in the future, and any pensions won't kick into until I'm pushing 70!). So I'm viewing this as a way of hopefully working towards this. And if it's not enough to retire early on then we would have the money available for holidays/cost of living in retirement instead. We already have sufficient savings if we needed them in an emergency (they're currently "allocated" to house deposit, but the idea is that we could also use that money in an emergency for a new car or something) so I feel comfortable doing this.

    All the additional money I'll be getting from being employed again (HURRAH!) will all be going into normal savings for a house deposit (plus some for holidays!).

    And thank you for the wishes, I can't believe we've been married a year already :)
    MFW2020 challenge #99: £2,367.60 / £3,600
    MFiT-T5 (Jan 2019 - Jan 2022) challenge #99: £13,363.81 / £30,000
    Initial MF date (18th Dec 2018): Jan 2054 Current MF date: Sep 2051 :D
    Last updated: 31/05/2020
  • atrixaatrixa Forumite
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    In an ideal world I'd love for us to not *have* to work and to be able to retire early (I'm 31 at the moment so this is quite a long way in the future, and any pensions won't kick into until I'm pushing 70!). So I'm viewing this as a way of hopefully working towards this. And if it's not enough to retire early on then we would have the money available for holidays/cost of living in retirement instead.
    Looks like we have similar goals for later life :) If I can be mortgage and rent free well before my retirement age I can hopefully reduce working hours by quite a bit if not retire early. I'd hate to be working full time past 60ish.
    I work in Pensions and I'm currently saving for my first house deposit :T
  • pinknsparklypinknsparkly Forumite
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    atrixa wrote: »
    Looks like we have similar goals for later life :) If I can be mortgage and rent free well before my retirement age I can hopefully reduce working hours by quite a bit if not retire early. I'd hate to be working full time past 60ish.

    Hi Atrixa, it might be a lofty goal but can you imaging HOW AMAZING it would be to achieve it :):)
    MFW2020 challenge #99: £2,367.60 / £3,600
    MFiT-T5 (Jan 2019 - Jan 2022) challenge #99: £13,363.81 / £30,000
    Initial MF date (18th Dec 2018): Jan 2054 Current MF date: Sep 2051 :D
    Last updated: 31/05/2020
  • pinknsparklypinknsparkly Forumite
    496 posts
    Fifth Anniversary 100 Posts Name Dropper
    ✭✭
    Long time, no speakies! I've completed my PhD studies!!! Or at least, had my viva, started a job and got a long list of corrections that I need to make to my thesis in the next 12 months before I can officially call myself Dr PinkNSparkly :) It's rather wonderful to have some actual income again each month, and to be able to buy stuff again! We went clothes shopping last weekend as we'd not bought any clothes in two years and were starting to look rather raggedy around the edges! I discovered the awesomeness of men's slim fit stretch jeans: nice fit on the waist with no need for a belt, far better quality denim than the same price women's jeans and POCKETS. Pockets that go half way down to your knee / cover your bum that can actually fit things in!!! Seriously, it was quite a revelation and I'm not sure I'll be going back to women's jeans :)

    I've just spent the morning reviewing all of our savings as they are scattered around in various different accounts, and our current house deposit stands at 13.2% (up from 11.9% the last time I updated my signature) which has made me a very happy bunny! Pushing it to 15% before buying the house is starting to seem more do-able. I need to wait until my end of April payday to know for sure though, as I don't think my monthly salary will be as generous from then onwards when I have to start paying much more on it!

    Hope everyone else is having a wonderful easter weekend, and you aren't too badly affected by the bad weather (I'm sure I heard that the clocks have gone forward, and it's now officially summertime but must have got my wires crossed!!)
    MFW2020 challenge #99: £2,367.60 / £3,600
    MFiT-T5 (Jan 2019 - Jan 2022) challenge #99: £13,363.81 / £30,000
    Initial MF date (18th Dec 2018): Jan 2054 Current MF date: Sep 2051 :D
    Last updated: 31/05/2020
  • savingwannabesavingwannabe Forumite
    14.9K posts
    Tenth Anniversary 10,000 Posts
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    Well done on viva and new job. I am so pleased for you, it will be challenging working and correcting your thesis but you will do it. Huurah for savings on housey.

    It is so good to have you back. Happy Easter.
    Trying to be frugal 18/31Jan; 15/29 Feb 26/31 March 23/30 April 18/31 May 20/300 Jun NSDs.
    Saving change in money box.
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