FinancialBliss: My mortgage free journey…

financialbliss

Woosh.

Busy here today!;)

Need to be back from lunch @ 2pm, so I'll digest and respond to some of the posts this evening...

FB

rca779

Whee can I see an example SOA so that I can create one myself....Never too proud to ask for help!

LouiseJ

I found this on the DFW thread

Below is a rough template;

Monthly Incomings:

My salary - £1,330.34
Partners salary - £874.32
Benefits - £100

Total - £2,304.66

Monthly Outgoings:

Mortgage/Rent - £700
Council Tax - £89
Gas - £20
Electric - £20.53
TV License - £10.99
Sky £45.99
Phone - £40.79
Food - £300
Car Insurance - £32.53
Petrol - £80
Life Insurance £20

Total: £1,359.83

Make sure you include EVERYTHING you can think of!

Also give us as much detail about your debts as you can especially with the APR’s. If you don’t know them, phone the credit companies up and get them to tell you.

Egg CC – Balance £2,300 (limit £2,500) APR 12.9%

Tesco Loan – Balance £5,000 APR 8.9% Length of term 60 months, 12 months to go

Overdraft - £800 (limit £1,000) APR 20%

The SOA will be the first thing any other user will ask you for and it's essential you get it as accurate as possible!

financialbliss

@rca779 again !

Can I just say that I’ve paid 1,250 towards my mortgage, wait for it… wait for it… I’ll go and check, oh no I don’t need to – just the once – February 2008

I think it was in my aims for 2008, I mentioned this is a make or break year. If I can’t keep to somewhere around the 1,250 mark, then I’ll not hit my target. In January, we only paid 900 towards the mortgage due to Christmas.

One of my failings is that I like to make a good effort of things, so I’ve been putting off a statement of affairs (SOA) until I can bash out a honest and realistic one.

I’m not going to suddenly pull one out of a hat this evening, but to give you an idea of where I pulled the 1,250 from – I’ll do the income, as that’s easy.

Remember that if you want to do a true analysis across the board monthly, then if, say you’re getting child benefit of 120.80 every 4 weeks, then you’re actually getting the equivalent of 120.80 * 13 / 12 = 130.87 per month.

My salary: 2,076.65
Mrs Bliss: 0.00
Child Benefit: 130.87
Child tax credit: 43.53
Total Income: 2,251.05

So, my thinking was that if we could live off 1,000 per month, that leaves 1,250 towards the mortgage.

I’ll add the above income part of my SOA to post #2 as:

• Post #2 talks about money
• It’s at an easily accessible location within my diary
• Should theoretically motivate me to complete our full SOA

Kids.

While #2 can say “money” and I suspect she knows that the coins are money, at 19 months, she’s got zero concept of money, which is currently working well

#1. He’s very good. He knows mam doesn’t work and also that we haven’t got endless pots of money, but he also gets treats and times out. He also likes his holidays and last year and this, we’ve had/going to have two holidays, which has kind of set a trend to follow. He accepts that when we say he can’t have something, that no means no. He was out in the back garden on Sunday when it was only about +4c just digging up the mud and playing.

Think it’s fair to say that they’re not (yet) high maintenance. Looking at our child activities type spending we have:

Swimming (weekly in term time @ 5.00) 190 per year
School meals (daily @ 1.70 per day) 323 per year

I’m assuming a term time of 38 weeks. Breaking that back down monthly is a mere 42.75.

Can I just echo the very good points setmefree2 made. We’re trying to make what we have go further. Eg I’ve a pay-as-you-go mobile and I’ve yet to top this up this year. While I’d love a 40” or 50” hi-def flat screen TV to compliment the PS3, theoretically I could afford this, but I choose to ignore this for luxury for now.

I take a packed lunch and a flask of coffee into work each day rather than pay a fiver or so daily for lunch, coffee, snacks etc. It all adds up.


Thanks for the replies today – I still need to re-read them to see if there’s any other interesting points I’ve missed out but I’m about to turn in the towel this evening.

Thanks,
FB.

financialbliss

As I'd previously mentioned, I've now added the beginnings of a SOA onto the end of post #2 of this diary.

Hopefully, this will push me into doing a complete SOA.

Watch this space, as they say

FB.

rca779

I have been working on my SOA over the past 2 days and it is quite amazing

a) how much we spend
b) how much we SHOULD have spare

I won't bother posting the full details of my SOA up, but my summary is as follows:

Monthly Income: £2935
Monthly Expenses: 2041

So in theory we should have approximately £894 free each month!!

Wow, I should be rich!!

So I guess my next step is too try and understand where this £894 goes each month. In doing my expense figures I didn't take into account birthday's, odd day's out and the very occasional clothes shopping we do but even these can't add up to more than about £100/£150 a month - Very strange!

We have reasonable amounts of savings - £70/month go into ISA's. One of these I believe has about £8k in it but I don't know the value of the other. I have a stocks and shares ISA that is worth ~£2.5k.
We have ~£2k in a Nationwide E-Save account.

As I said above we would appear to be reasonably well off, so quite why my Wife & I argue about money each month when we appear to be skint I don't know?

Still it's a nice feeling doing this SOA and realising that things aren't all that bad after all. Just need to get a bit more of a grip on the odds & sods spending and I think we might be in a position to start over paying our mortgage and joining the MF in maybe 5 years club.

setmefree2

Hi rca779

I think a spending diary is a really good thing to do. I have been doing one for 5 years and I record every £1 I spend in excel spread sheet.( I do it everyday and then pop in here for a "Chat") It has been truly enlightening as I never:huh: knew where my money went before just that it was gone. So five years ago I was spending £508 per month on food :eek: and now I spend £397:D (Family of 4)....

Good Luck:money:

taka

Its scary when you start to track EXACTLY where ever penny goes! You never think you spend a lot but all those little things add up really quickly!

I've recently opened a separate current account so I now have 2...

Pay goes into account#1 (bills account)
Money to spend for the month gets transferred to account #2 monthly around payday

• Groceries (£4.50/day)
• Spends/Treats (I can blow this on anything if I want to if I want to... £1/day)
• Entertainment/Going out (£3/day)

These 3 mini budgets stay in my current account#2 - I know when I check my balance at the cashpoint/online that this is it for spending and no more! If I have anything left it gets transferred to my loan savings account at the end of the month.

I also transfer over a monthly amount for the following

• Clothes
• Shoes
• Hairdresser
• Birthdays/Mother's/Father's days
• Xmas
• Dentist /Doctor (prescription every 8 weeks)
• Holiday

These mini budgets are moved to the savings account associated with account#2. I can transfer these immediately online to account #2 if I need them. These I'll build up and use as and when I need it throughout the year.

I have all my mini budgets set up in quicken (as savings goals) so it takes me about 5mins on payday to check what to transfer for the month.

I used to just say I've got blah blah to spend for the month (same total amount) but I kept spending the whole amount each month and suffering during the months where I had a dental bill/lots of birthdays etc.

I found breaking my budget down even further has helped me to lower my spending even more as I keep challenging myself to underspend each bit! Its a bit OTT I guess but it works for me!

Many people also recomend a spending diary where you write EVERYTHING you spend down. Even if you don't want to do this long term it can be good to do for a while so you see where your money actually goes! The canteen at work was the biggest shocker for me... all those lunches and random drinks soon add up. I apparently spend more there last year than I paid for my holiday last year including spending money :eek: Scary... particularly as the canteen is not actually very good... just convenient! :eek: It was partly the reason why I've itemised my different budgets more :rotfl: 3 months on and I've saved an extra £300 and have around £400 in the savings account. All money I would have spent before!:j

setmefree2

"I found breaking my budget down even further has helped me to lower my spending even more as I keep challenging myself to underspend each bit!"

I use my data for this too. It gives you something to aim at:money: - a personal target.

I also can now see my monthly spending patterns easily . Jan, Feb, March are all EAZY months....April, May (loads of birthdays) June July August HARD ( Hols) Sept, Oct Nov EAZY and Dec TOUGH.

financialbliss

A quick update this evening...

Posts #1. It hasn’t escaped my attention that I’d reached 10,000 views last Monday for my diary. Been intending to mention this all week, but I see that I’m up to 11,000 views, that’s an increase of a thousand in less than a week.

Posts #2. Following on from that, anyone who visits here regularly will note that I’m a bit of a night owl, with the majority of posts in the evening. Early mornings area bit of a no-no for me, not as I can’t manage to get up, but rather that we’re kept busy with 2 kids. Evenings are when we get some kid-free time.

A perfect example, would be this morning (a Sunday as well). #2 kicked off around 05.00 – we got her settled, but #1 then wandered in at 05.20 determined that he wasn’t going back to sleep and wanted to go downstairs to play.

SOA. With al the chatter about SOAs, I’ve made a good start on our own SOA. Initially we had loads of spare cash free per month, but now that I’m trying to include / break things down properly, it’s looking like we’re a tendency to overspend on a monthly basis. We'll see once it's complete.

Two interesting things have come of this:

• I don’t know all of the spending – I’m going to have to involve mrs bliss and extract some number out of her. This seems an ideal time to break the news that we’ve got an on-line mortgage free diary, but I’m still wondering if she’ll go ape or not?

• Monthly spending - as you may have gathered, I’m trying to reduce the mortgage. In times when there’s money left in the pot at the end of the month, I’d have previously thrown some / all of this towards the mortgage as an overpayment to use up any spare cash. Clearly, if I’m not spending on Christmas or some other non regular monthly event, I should be putting this into savings rather than spending on the mortgage, as the amount I’m actually spending on the mortgage is then more than my budgeted amount. Budget then goes all to pot.

#2. Just bought our daughter a bed, bedside cabinet and wardrobes at the weekend at a cost of 400. She’s coming up 2 to and she’s had the side off her cot for a while so she can climb in and out herself, but we’ve taken the hit and purchased a bed set now in the hope that she’ll adjust to the bed before the holiday in April, so she can use the bed / we then don’t need to take the travel cot, thus more space in the car.

Thanks,
FB.