FinancialBliss: My mortgage free journey…

rca779

FB,

I am sure I've already mentioned this in a previous post, but I am also a .NET web developer. Work mainly on ASP.NET 2.0, AJAX, JavaScript and I am just starting with Web Parts.

What interests me is that I believe you are a freelance contractor. This is something I have always wanted to do, but due to having two young Sons and a wife that doesn't work, I have never had the bottle to give up a nice secure permanent job. My current role as a development team leader is good, I get just over £40k a year, but I know I could earn so much more going freelance.

How did you make that step? Have you always been freelance? any tips for a permie who wants to make that huge leap?

JonnyBravo

financialbliss wrote: »

Bradford and Bingley. While we’re still on shares, they took a massive nose dive this week. Got 524 shares. I’m wondering if they’ve also had problems raising capital to lend out as mortgages too? They have recently issued a profits warning.

Yep, B&B and Alliance and Leicester are the other two most exposed. Personally I'd sell, but I'd have sold NR at anything, thinking nationalisation was a cert.... but then who knows... you may get £2 or the like for them.

I guess it depends on your view but the "easy come, easy go", "it wasnt my money as i didnt pay for the shares" attitude does you a dis-service. Youre obviously money savvy and you really did have £12k of NR shares at one point.
You still have £890 worth of B&B (9.21am), if you decide to try and ride it out, fine, but don't let the attittude above dictate possibly losing what could still be the lions share of a months mortgage payment on your quest.

And don't forget that point I made on the ISA's.... especially as April will be here before you know it!!!;)

financialbliss

rca779 wrote: »

FB,
How did you make that step? Have you always been freelance? any tips for a permie who wants to make that huge leap?

@rca779

I’m sorry to disappoint, but I’m a permanent employee, not a contractor. Perhaps you’re confusing me with Dithering Dad?

Anyway, your situation sounds very similar to mine. I’m the only earner, my wife stays at home and looks after the two little’uns – currently 3 and 1.

As I’m going to post a SOA (eventually), I may as well disclose that I earn less than you @ ~ 36k with a pay rise due in April. As I work in local government, that’s not too bad a salary. A typical 2% local government rise in April should take this up to around 36.5k.

I’ve never disclosed location, but I’m in northern England, so especially with regard to property prices, I’m potentially going to do better than, say, someone in London / greater London on the same salary.

I totally understand where you’re coming from with regard to possibly being able to do better.

I’m sure, like myself, you’re more than competent in your job – it’s not that you’d not be able to hold your own as a contractor, it’s taking that initial leap of faith in yourself and your ability to secure viable short / medium term positions at contractor rates to realise a salary far in excess of your permanent rate, offset against longer hours and potentially working away from home.

In 1998, I jumped employer and at the same time got a fair increase in salary. Was only ever intending this as a stop-gap post, except I was promoted, we got married and kids came along, which like you say, puts a downer on the contractor idea.

A few years ago, I’d never dreamt I’d even have kids. One Saturday morning, well actually it was 8th March 2003 (one of those life changing dates / events that you fail to forget), we just sat down and discussed if we wanted kids or not.

I do love my job. I effectively muck around with computers and get paid for it! I’ve a flexi scheme, final salary pension scheme, supportive management etc. But one of the best things I have going for my job is that I get to see my kids every evening. This is an absolute luxury I'd hate to give up.:D

Just to finish off on this subject, it’s not all rosy in contractor land. A good friend of mine – another software developer got an internal memo from BT advising they were looking for voluntary redundancies. As a permanent employee, he was quite well paid, but BT also had contractors doing the same work, but getting paid 2 or 2.5 times more than him. So in May 2007 he took the voluntary redundancy, took a 2 month career break in America, with a view to re-starting with BT as a contractor, but for various reasons this didn’t happen.

He was out of work until January this year – now working as a permanent employee again, but not with BT.

Hope you can draw something useful out of that and apologies for not being able to answer your questions.

Any IT contractors out there wanting to pay their mortgage off and can chip in their 2p of advice?

FB.

rca779

I'm staggered by the fact that although you are earning less than me and yet you can afford to pay £1,250 a month towards your mortgage!!

I struggle to make ends meet each month, with the occasional £100 being put into savings.

OK I live in North Hampshire, but my mortgage is only £57k with 12 years left. This gives me monthly payments of about £550/month.

I guess one of the big differences is the age of your kids. My boys are 7 & 9 and they cost me a fortune! I can roughly break down their expenses as follows:

· school dinners @ £2 each a day - £20/week, £80/month
· Swimming lessons - £60 each per term
· Trampoline lessons for 7 year old - £60 a term
· Tenor horn music lessons for 9 year old - £60 a term
· Hockey lessons for 9 year old - £60 term
· Football - £95 each a year, £190/year or £16 month
· Cubs - Don't know the actual cost, but believe this is pretty cheap

This is before we pay for school uniforms, sporting clothes & equipment!

Hmmmmm, think I might have just answered my own question above.

We also run 2 cars, although these are both fully paid for, we still budget for about £800/year for each of the cars - Tax, Insurance, MOT and a service. However my Wife's car is going to cost the best part of £750 in extra servicing over the next 2/3 months as it needs extra work carried out.

I have the opportunity to take a company car in April, but to be honest I don't think I can justify the cost of the tax. I only drive about 8 miles each way to work and even a fairly average Ford Focus would cost me over £1,000 a year in car tax. The alternative is to take the cash which is £4,500 / year before tax (about £225/month after tax). So as much as I would love to have a nice shiny new car, with trouble free motoring for the next 4 years, I think I will have to take the cash.

I am so enjoying reading your diary and it really does inspire me to be mortgage free ASAP, but to be honest while my boys are still young enough to enjoy any extra money is spent on them and holidays. As you point out in your post above, I also get to see my kids every evening and weekend and wouldn’t swap that for anything! In no time at all they will both be teenagers and probably won’t want to know my wife & I then! That is probably when I will think about contracting/changing jobs and working at being MFI3.

Good luck in your challenge and I will be with you all the way!

setmefree2

Hi

Kids cost a fortune don't they - and they don't get any cheaper:eek: I currently pay £25 per hour, once a week, for my eldests' (14) guitar lesson. However, I have now managed to get both my kids playing for football teams that cost me next to nothing:D.....

....school dinners cost a fortune (both at High School)....costing me about £5 per day...however, kids love them and look fwd to lunch.....

People tell me it only gets worse as well - especially if they go off to Uni:eek:

rca779

So how do you guys find the extra money to over-pay your mortgages?

I do everything the MSE advise with the only possible exception of my energy supplier, but I am tied in with British Gas for the next 2/3 years on a fixed price deal - not sure how competitive this is, but I suspect it's probably about OK.

setmefree2

Hi

I have BGs price protection 2012. Whenever I've checked it's been seen as a good deal. I think it's 22% lower than BG's current prices.

For us it's been things like
- not replacing our car with a new flash one (we have an X reg scenic).
- Cut about £100 to £200 off shopping bill per month
- For Mr & Mrs SMF2 -stopped buying new clothes. Only buy when need replacing.
- Buy kids clothes in Outlet village when visiting up North (Cheshire Oaks - it's Fab)
- Slashed cost of insurance on house and contents
- Cut right back on Take Aways & eating out
-TBH I'm less generous with charities now than I used to be (not sure if this is a good thing:o) we still do a monthly GAYE donation to Oxfam and I give all books, etc to charity shops.
-don't buy make up I'm not going to use
-don't replace TVs, stereos etc in less they are broke .....walk passed that lovely HD TV!:rotfl:


-and I never ever think "oh it's just a £1" anymore....

...and I've kept a spending diary in excel for 5 years

Well, you did ask:D

SMF2

rca779

Nice to know the BG fix price is a good deal. I though it would have to be when I first saw it.

We've done all the above - I have a V reg mondeo and OH has an 02 Pug 307 estate.

The only thing we haven't done is to cut the monthly food shopping bill -it is normally around £100/week for a family of 4 but I know Mrs 779 is VERY frugal with the shopping so I doubt it could be cut back much more.

I have even started selling some of my old books on Amazon to make some extra dosh with mixed results so far. First few I sold were old IT books for about £20 each. Easy I thought, so I have sourced a whole load of books but you have to be SO careful with postage costs. One of the books I sold over the weekend I messed up badly and only made 13p! Another one I have to post today could even end up costing me money! Still it's a learning curve and I have already addressed all the other books I have put up for sale so that I don't lose out again.

setmefree2

It'll all be worth it in the end:D we hope:p

LouiseJ

rca779 wrote: »

So how do you guys find the extra money to over-pay your mortgages?

I do everything the MSE advise with the only possible exception of my energy supplier, but I am tied in with British Gas for the next 2/3 years on a fixed price deal - not sure how competitive this is, but I suspect it's probably about OK.

You could post a SOA for us to have a look at and see where we could help you save.
Its all about balance though, I know I could pay more off my mortgage if I cut back even further but I have 2 teenage boys and we love our family holidays. They are also very good at selling unwanted toys, books and games on Ebay and pay for any new things themselves. My eldest son is very MS and decided himself that he only wanted a guitar lesson every fortnight to save money he practices every week and is doing very well.

We are lucky to have older kids in the family and friends circle and I regularly receive bags of quite often unworn clothes which they wear without concern, infact they quite like rummaging through to find what they like.

They have never felt unloved or hard done by and I am sure that the lessons they are learning now will hold them in good stead throughout their lives. I was in my late 20's before I learned anything to do with MS and lived from week to week getting further and further into debt, and scarily not caring! I want to pass on my new found knowledge to my children.