Prosperous soul in the making

[Deleted User]

Happy New Year SH x

MovingForwards

You achieved a lot in 2019, got answers for queries about DD, DS is off to uni and has his plans, you have your plans for the future and retirement (just don't forget your you time).

May 2020 be even better than the one we are about to leave x

savingholmes

jwil wrote: »

Thank you, that's really useful

I get the arguments about the mortgage vs pensions, but for me I think it's about security. Whatever happens we'd have a roof over our heads. I can't get away from that angle. That's really helpful to think about tax too, I wouldn't even have considered that.

I'm mostly focussing on debts at the moment, but do try and keep in mind pensions etc. I haven't spent much time on it. I've got a DB one, but DH's provision needs to be thought through and considered more. It's one thing I keep meaning to do.

We are still debating pension versus mortgage. I like the idea that the money will give us an income if we put it into pension - and that we would get 20% tax relief on it. At today's interest rate of 1.7% for us - we pay £206.49 for our mortgage a month. Having said that on the pretty much the same interest only mortgage in 2006 we paid £750pcm. So I have to be mindful that interest rate rises could screw things up in future. We've knocked £6K off our mortgage total in that time on top of the £50K deposit we put down. However house prices dropped around 2008 by about £20K and then rose so we have now gained about £50K in equity above our original investment.

Showing how small amounts add up - we are currently overpaying £102.51 pcm - which over the 11 years 8 months before the mortgage is due will knock off just over £13K. If we just paid off £50 more pcm that would drop it around another £7K+. (i've not allowed for any impacts of interest reductions so far). DH and I will continue to discuss over the next year - whether to put more to it than that once we are CC free this time next year. We also hope that at some point our dependent related costs will drop and free up more money which we could then put towards the mortgage.

I am still awaiting my regrade appeal - if that came through - we would have extra money to throw at it. There is also talk of a possible interest rate drop - our mortgage is 0.95% above base rate so that would help us.

ohshithowdidthathappen wrote: »

Those plans sound fab, although I'm not convinced I understand them completely. I find pension stuff REALLY confusing, I must admit I'm not sure where OH and I stand with it all. Retiring always seems so far away, it's easy to ignore, but I need to get a grip on my understanding of it as it'll creep up!
Glad you've had a lovely Christmas :-)

Thanks - you too. I got sooooo depressed about 12-18 months ago - and I think it was a combination of our DS being in Oz, DD's needs and the pressure of not having a clear plan for our financial future. Having a plan even if I can't fully activate the income growing stage is definitely helping.

jwil wrote: »

That's really interesting. How do you calculate what is enough to live on? Do you do it on the basis of what everything costs today? That's where I get confused. Say for example we'd need £20k if we were to retire this year, but how does that translate to 20 years time when we don't know how much things will cost?

If the mortgage was paid off and we had no dependent's costs we would need around £31K after tax per year to sustain our current lifestyle. I haven't allowed for any reduction in utilities, fuel etc from not going to work - so I'm hoping that the real number would be less than that. We are hoping to do some travel - so I've left some money in for that and other non-essentials.

savingholmes

enthusiasticsaver wrote: »

We tracked our pensions and long term savings annually and updated a spreadsheet and at the same time tracked expenditure.... It helped us though to get rid of the mortgage as it was our biggest outgoing.

We opted to take our DB pensions early and although they were reduced it meant we could retire at 58. They were staggered so we are living off my DHs pension (the biggest) and his lump sum and one of my smaller pensions to use my tax allowance. Another one of mine pays out in February 2020 and we will use my lump sum to top up our savings. Best to have more than one income stream, stagger it and subsidise with savings/investments.

Thank ES. I have 2 x DB pensions - however in this method I am hoping to leave one untouched until 67 and draw one at 60. DH's current DC pension we are planning to leave until 67 currently. That leave us 4 small pensions which we are planning to transfer into a SIPP each to help mitigate tax. Because DH's current pension is so much smaller - we are likely to build the SIPP up in his name initially for tax reasons as you say. Assuming we are lucky enough to live to 67 and beyond - both of us would be in the lower rate tax bracket.

jwil wrote: »

Thank you, that's really useful

I get the arguments about the mortgage vs pensions, but for me I think it's about security. Whatever happens we'd have a roof over our heads. I can't get away from that angle. That's really helpful to think about tax too, I wouldn't even have considered that.

I'm mostly focussing on debts at the moment, but do try and keep in mind pensions etc. I haven't spent much time on it. I've got a DB one, but DH's provision needs to be thought through and considered more. It's one thing I keep meaning to do.

Definitely look into it JWIL. Remember I am currently planning for what I want to start doing a year from now. I'm reading all I can on it. JL Collins offered the simplest explanation of the stock market for me - you can watch him on you tube or get his book.

savingholmes

Thanks everyone for the replies and good wishes.

Msmoneyspider wrote: »

I have really enjoyed reading your diary and think you have done fantastically well clearing £20k of debt. My heart goes out to you as you support your daughter navigating her teenage years, whilst contending with ASD.

Our son was diagnosed with CAPD at 4 and his teenage years were very traumatic for my husband son and I, not sure how any of us made it through …… but we did and he is now doing very well and seems happy in his own skin, feel sure the same will be true of your DD.

Love your crafting. Art has been my saviour and creative outlet....Keep up the great work.

My MH is definitely better when I do crafting of some kind. ASD is definitely challenging. Good to hear things with your DS have settled down now - we have had a fair amount of trauma too. Thanks for reading and replying.

Busy_Mee1 wrote: »

Great plans SH and amazing what a bit of focus can do. You will probably iterate your plans as you move closer to retirement. We did. We started saving to offset against the mortgage, and now Mr Mee has retired and we are nearly mortgage neutral we have switched our efforts to paying down the mortgage.

Hope you have a very Happy and Healthy 2020

Thanks BusyMee - I will come and find you on your diary again. I would like the mortgage to be gone - however we are willing to downsize if needed or even for a house in the right location which is one of the reasons it doesn't over worry me at the moment. Also our mortgage is portable so we should be able to take it to the next place. This is the longest I have lived anywhere in my whole life. I would be surprised if we are still living here in 5 years never mind 10+. Our current mortgage is due around DH's 61st birthday.

MovingForwards wrote: »

You achieved a lot in 2019, got answers for queries about DD, DS is off to uni and has his plans, you have your plans for the future and retirement (just don't forget your you time).

May 2020 be even better than the one we are about to leave x

Thanks MF. We have made great progress this year - however in some ways that was the redirection of energy away from the uncontrollable. We have behind the scenes had a traumatic year for a number of reasons and will be very glad to leave it behind.

savingholmes

:hello:It's always lovely to come back to loads of replies. Lurkers feel free to delurk or read as you wish. Well yesterday I had a very busy day. I painted behind the three new towel radiators. Luckily I had kept the paint colour the same in all three rooms so that was simple enough. In the main bathroom I topped up the paint on the walls in general as it seemed a bit uneven. I asked DH to mask the ceiling for me and then sorted out the edges that have been driving me mad since I slapped paint up there over a year ago when I got the floor done! It looks so much better now.

I've been intending to finish off glossing in the downstair's w/c and did the doors before I went to bed last night - still need to do the skirting boards and finish it off. I also need to do the same in the bathroom and ensuite upstairs as when the old flooring was ripped out and the new flooring laid - it left about 1cm of newly exposed skirting board - and I never went back and finished it. That's my plan for this week - to sort those kind of things out.

We also took pooch out for a walk. I got a low cost fitness watch for xmas and did 2,900 steps the first two days and closer to 4,800 yesterday. I am hoping it will motivate me to do more walking.

I also nipped to the shop and came back with a new zip up!!! quilt cover (a deer in the forest scene) for our bedroom. It matches the accent wall beautifully and ties the room together with a forest and lake picture already on the wall. It cost a lot even with 20% off however I took £78 of stuff back that someone had bought for us but weren't the right sizes or colours so don't feel too guilty. I got a new mirror for xmas that I want DH to hang - plus one for DD. Yesterday I realised that the downstairs w/c didn't have a lampshade so bought a nice crystal looking one for £8. Although it would be better not to be spending money, I tend to decorate when I'm feeling better MH wise so for me it's a sign that I have hope for the future again and that made me feel happier still.

Happy New Year all

Chrystal

Wishing you everything you wish yourself for the New Year..... and the house plans sound great

doingitanyway

You've been busy.
Spending on surroundings is a good thing as you gain benefits all year long.
Happy New Year

savingholmes

Thanks Crystal and DIA - wishing you all the best for you and yours - and the same for my other readers.

I have set myself some challenges which cover the first quarter of the year:

Health and wellbeing
* I aim to lose 14lb by 31/320 and DH aims to do the same
* I plan to build up to averaging 6000 steps per day - and then hopefully build it up further in the summer closer to 10000 steps. Hopefully this will include lots of walks with pooch and the family
* I plan to undertake craft activities at least once per month
* Write 8000 words of one of my books each month
* Arrange to see friends at least once per month
* Low cost alternatives to eating based date nights for me and DH - at least 1 x per month, preferably twice

Low spend January
* I want to spend £50 or less on food between now and my payday on the 15th. Our freezers are full - so that is just for fresh food.
* I want to pend £50 or less on fuel between now and payday. DH just filled up and mine is just under half full. I might have to put in half a tank.
* I want to avoid takeaways or eating out in Jan and see if I can reduce our spend the rest of the year too. I currently allow £150 for days out and eating out- ideally want to drop it back to £50 and throw that money at debt now - and in future the mortgage. I feel in the last few months I took my foot off the intensity meter
* I want to reduce my reliance on junk food to SW recommended limits for my weight which would be more like 400-500 calories per day. instead of the over 1000 calories I currently have

Debt reduction goals
* Plan to pay off £5605 by the end of March payday period

Home improvements by the end of March
* Finish off gloss work in each bathroom ideally by 5/1 or worst case by 31/1/20
* Repaint kitchen and utility in February (already have 1 tub of paint although likely to need more)
* Finish glossing our bedroom (4 wardrobe doors!) and skirting (I think I already did the outer door and the ensuite door
* Finish painting walls in our bedroom (tiny section left )

Honeysucklelou2

Interesting set of goals. I really like your 8,000 words of writing a month. Happy New Year and wishing you every success and happiness in achieving your challenges.