Time to take stock

edited 28 July 2017 at 10:56AM in Mortgage-Free Wannabe
3 replies 603 views
spiritlessspiritless Forumite
81 Posts
Tenth Anniversary Combo Breaker
edited 28 July 2017 at 10:56AM in Mortgage-Free Wannabe
We are about to move in to what feels like a new chapter in our adult lives and I thought writing it down might give me focus. I'm afraid I do go on a bit, sorry.

We've been in significant debt for 15 years. At the peak and without counting the mortgage, the figure was around 100k. Quite scary, isn't it? Mainly built up through bad choices, bad depression, more bad choices, living on one income and then some more bad choices. Anyway, the upshot is that we've paid all of the high rate stuff off so have no credit cards or overdrafts. We have, just last month, refinanced the biggest ball and chain we've carried for 10 years - the infamous nram together loan. We took out 30k 10 years ago and when we moved 2 years ago, the interest rate rocketed to 13% as the mortgage and loan delinked. We decided to refinance with HSBC on to a lower interest rate (6.7%) over 96 months rather than 28 years. Payments just increased by £40 a month but the end is in sight. We felt a huge sense of achievement in doing that although I know others may not understand that totally. Only issue is that the loan is front loaded with interest, so no real benefit to rushing to pay it off.

the only other debt (aside from the mortgage) is to repay family. We owe brother £6k and mother £10k still. It's interest free but we want that gone as soon as we can.

So the next phase is to reduce the mortgage. We've got 3 years left on a 5 year fixed. Interest rate is 4.24% with Halifax. Current balance is £235,000 and we pay £1195 a month.

We've got £1000 to throw at remaining debt and mortgage currently a month. We've also got £6000 left over from a bonus. However that £6k needs to be kept aside as there will be another tax bill due at the end of the tax year and as we've never been in a position where my husband has earnt over £100k before we aren't sure how much the bill might be. And in any case, it's the first time we've ever had 'money aside' ever. I quite like to log in to internet banking and just stare at it :rotfl:

So, in short, we've been in a right old pickle of our own making since we met. We've promised each other things will change and they haven't. We've been at the point of losing everything but fought back and finally we feel like we've grown up and become responsible with our hard earnt cash. We won't always get it right going forward and I'm sure some people reading this are rolling their eyes but this journey has taught me so much about myself and honestly, I wouldn't change a thing. Our future has some challenges- I have rheumatoid arthritis which is steadily progressing (my self employed job involves sport so that's not great but I do have the security of a full time admin job too) and my husband doesn't have a pension. He's 40 this year so time to crack on. We also receive £420 every 4 weeks for our son who is disabled. That's due to be reviewed in 2018 and as you just never know with these things, I'd like to have made as much use of that money while we've got it. Not that his disability has improved but you just never know.

So, sorry again for the ramble. My first challenge is to make sure Insurance's are all as low as they can be- my annual summer holiday job :)

Replies

  • MoneyfordreamsMoneyfordreams Forumite
    2.2K Posts
    Sixth Anniversary 1,000 Posts Name Dropper
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    I'm rooting for you... :)
    We've made bad choices too... but although the end is still a good few years away, we can seen it now. :)
    Mortgage restart June 2018 £119950
    Re mortgage August 19 £110470, HSBC 0, Hfx £5800, MBNA £6000
    … Mortgage £96500
  • Frufru23Frufru23 Forumite
    40 Posts
    Hi!

    Just some thoughts that may help....

    Have you thought about posting a statement of affairs, lots of poeple here will help scrutinise and see where you could potentially save some money. It also helps to take stock when you actually see the income and outgoing wrote down in black and white.

    Is your husband self employed? Is that why you need to keep aside the money, for self assessment? If yes, is this something that you budget and save for every month? I'm self employed and squirrel away every month. It's easy with a quick google to roughly calculate what your tax liability is likely to be.

    Best of luck with everything....
  • Busy_Mee1Busy_Mee1 Forumite
    1K Posts
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    No one will be rolling their eyes at you here. Lots of us made poor choices in the past but at least everyone on here is taking positive action to improve their financial position.
    The first step is to understand where every penny you spend goes, so an SOA is a good start. Once you understand how you spend your money, you can start to make choices about what you do with it.

    Wishing you the best of luck, I will read along to see how you get on x
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