Single Mum of Two doing it by myself!!

pollyanna24

I have decided to join the ranks!

My mortgage journey has been quite long winded, going from owning a house with my ex, my brother buying him out and then finally me buying my brother out in 2016.

I have always been committed to overpaying, but I think my initial mission is to get the monthly payment down rather than get rid of the mortgage(s) as that is too scary to think about.

I have had a few diaries on here, but as my situation has changed and I do not expect people to plough though the old stuff, though I would start a new one.

I have two mortgages (the 2nd one taken on to buy my brother out), but am only attacking the first one which is on a tracker (2% above BR) as I have the option of taking back any overpayments as it is an old mortgage.

My background is that I am still single with two little pink sproglettes and whilst I am on this journey, I still want to enjoy my life with my little girls who will not be little for much longer!

I have a system of where any free money (money that I was not expecting or that I save on travel into London if I have a day off for example) goes into a pot and I use this to put £500 on the mortgage when I can (along with any money I haven't spent from my wages!). £500 is the amount that triggers a letter coming back saying £2 ish has been knocked off the monthly payment. Annoyingly, rate rises seem to put me back where I started, but this is better than the monthly payment going up!

This is where I am from when I owned the house by myself to now:-

....................Outstanding....OPs..............Payment
19 Feb 2016...£200,044.89......................£800.50
End of 2016...£189,007.33...£11,037.56...£757.78
End of 2017...£180,235.03...£4,000.00.....£753.46
End of 2018...£173,998.03...£1,500.00.....£749.28

I am on target for another £500 in April, and then hopefully will make another four overpayments throughout the year. I have it in my head to pay off £10,000 a year which will make me MF when I am approximately 54, 18 years from now! Still sounds ages, but better than 65!

pollyanna24

Just been reading through another diary (I'll find out whose in a minute) and now I'm scared that I am throwing everything at the mortgage and not worrying enough about my pension.

I think I will have to continue as I am at the moment until my mortgage is down to a comfortable (in my head) monthly payment and then I can concentrate on putting more in my pension.

I do pay into pensions (a private one that I set up and my boss pays a tiny amount into and a work one that was set up when my boss had to enrol me in one last year), but looking at how much is is likely to give me in retirement (32 years time), it is pitiful even though it feels like I am putting quite a bit!

pollyanna24

It was Pinkypig's diary.

My SOA:-

Mortgage 1 - £364.42
Mortgage 2 - £384.86
Childminding - £300 (mum, hoping to renegotiate for lower figure as times go on)
Groceries - £200
Travel - £194.13 (this varies, but this is average
Personal Spends - £150
Private Pension - £116.98
Council Tax - £106 (over 12 months, 25% discount)
Girls - £100
Gas/Electricity - £84
Petrol - £50
Breakfast Club - £48 (again this varies, but this is average, but to be fair, my dad pays it most of the time and I put the money in my free money pot)
Water - £37.82
Tax Credits Debt 1 - £22.65 (from when still with ex)
Work Pension - £20.72 (varies as I get paid different amounts per month)
Sky - £19.20 (getting rid of when contract up)
Broadband and Line Rental - £16.49
TV Licence - £12.37
Mobile Phone - £11
Savings for Nephew - £10
Netflix - £5.99
Fridge Insurance - £4.79
Oven Insurance - £4.74
Tax Credits Debt 2 - £4.00
iCloud - 0.79

Other things that I do not put in a separate point, but because I have done my spreadsheets for the whole year, they are accounted for and if it does not cost as much as I had anticipated, I put it in free money!

Car Insurance - £350
Car Service - £200
Car Road Tax - £135
House and Contents Insurance - £120
MOT - £58
Breakdown - £50
Garden Waste Collection - £40

This generally leaves me with between -£200 and up to £300 (depending on how much I have been paid and if I have a big bill like car insurance to cover and things like birthday comes out of my personal spends budget.

bexster1975

Hello and welcome

But now you've done it, mentioned the P word!!

I agree you need to put cash away for a pension. I also agree that if you are not happy with what you are currently putting away, starting as early as possible is a very good idea. That is where by passion for pensions ends. In terms of cold hard cash, investing your OP instead if OPing is a much more sound investment. Absolutely. I have a pension. But since the last round of changes I personally opted out. The thing is, with things as they stand there is no way of knowing when you or I ( I'm 6 years older than you) will ever be able to see a pension. The rules change all the time. Even a personal pension ( private or employer) can change when you can withdraw funds. Early redemption will invariably result in penalties. Once you draw it, how long will you be able to enjoy it? The ONS quoted the average age in the UK that people considered themselves in reasonable health until was 73. At this point, with retirement at 68 for us ( that will be 70 before we get there) that's an average of 5 years. Now I'm not saying don't save/invest. Quite frankly, the U.K. Pensions system rather resembles a ponzi scheme to me. The money you put safely in your pension isn't safe, but paid out to current pensioners. The hope is that subsequent generations will work, contribute then pay our pensions ( frankly, I'm not holding my breath on that one). So, what to do? Well, personally I decided to ensure I had my own investment vehicle set up. It loses the 20% tax free part as I've paid tax, but then as mine is currently in a S&S ISA fir the most part, it won't be taxed AFTER thirty years of compounding. Your pension of course is taxed. Also, if I have a serious life event, my money isn't locked away until at least 55 ( again based on today's rules). You can over time look at reaching FI. If you can calculated your necessary spends, then invest until you have about 25 times that, FI is likely yours! I appreciate that is a little trickier than it sounds.

I'm afraid I agree with the psychological advantage of paying down/off a mortgage. It is your biggest bill, and once you clear it, relative freedom is yours, should you choose to accept it.

No doubt pensionistas will rubbish my comments, and I will enjoy reading them should they do so. They are perfectly at liberty to go their way, and I shall go mine!

Just a point of view

Bexster

bexster1975

Hello again

Water looks quite high, are you metered?
I'm afraid I wouldn't contemplate fridge or oven insurance.
Gas and electric also might be worth a look unless you are on a fixed deal with contract breaking charges.
None of the rest looks outrageous. Car insurance isn't cheap, but depends where you live and what you drive.

I'd agree, and I have zero pension knowledge re: payment vs receipt but it's really unlikely £140 ish a month will buy you any type of lifestyle in retirement. I believe the auto enrolment system meant pretty much everyone was auto enrolled in a scheme that pays in next to nothing. That rate will rise in April which I expect will be a nasty shock to a large number of people, many then deciding to opt out ( largely out of necessity I might say).


I don't have the answer re: mortgage vs pension. Nothing is certain in life, you just gave to pay your money and take your chances.

Bexster

pollyanna24

Thanks Bexster, much appreciated.

I guess the starting point is that I am at least thinking about it, and 4 years ago at the grand old age of 32, I decided to actually do something about a pension.

I do have quite a bit of equity in my house and there is always the lure of moving outside the M25 when I am made redundant (my job isn't for the foreseeable, although I've been here 14 years, but my boss is 61). I don't want to work in London again, but at the same time, am reluctant to leave a perfectly good job!

Moving further afield would probably mean less money, but also less mortgage. Ah, I don't know, pay off mortgage and then sell up and buy a cheaper house and chuck the rest in a pension pot.

Sorry kids if you were expecting an inheritance of me!!

pollyanna24

bexster1975 wrote: »

Hello again

Water looks quite high, are you metered?
I'm afraid I wouldn't contemplate fridge or oven insurance.
Gas and electric also might be worth a look unless you are on a fixed deal with contract breaking charges.
None of the rest looks outrageous. Car insurance isn't cheap, but depends where you live and what you drive.

I'd agree, and I have zero pension knowledge re: payment vs receipt but it's really unlikely £140 ish a month will buy you any type of lifestyle in retirement. I believe the auto enrolment system meant pretty much everyone was auto enrolled in a scheme that pays in next to nothing. That rate will rise in April which I expect will be a nasty shock to a large number of people, many then deciding to opt out ( largely out of necessity I might say).


I don't have the answer re: mortgage vs pension. Nothing is certain in life, you just gave to pay your money and take your chances.

Bexster

Water is not metered, that is just what they demanded I pay, haha.

My fridge is old and I can bet the minute I stop paying the £4, it will break down.

Oven is quite new, but when I bought it, they did say insurance would cover cleaning it once a year. Haven't actually done this yet thought.

Gas and leccie I thought was quite reasonable for a 3bed terrace, could be wrong though. Locked in till October.

Car is an old Punto and I live in South Herts, just inside the border of M25. Just got though its MOT. Phew for another year!

bexster1975

Ha ha ha! The generation behind us seem screwed left right and centre, so no inheritance for them will not be too shocking I imagine!

Sorry I can't be more helpful from a decision making point of view. I developed a serious permenant disability four years ago which changed how I look at this type of thing. Once you are mortgage free, by whatever means, you can if you choose keep your outgoings quite low once travel to work, childcare etc can be removed from the equation.

Bexster

bexster1975

I pay £30 fir gas and electric. 1 less bedroom but no kids which might make a difference. May be worth investigating a water meter.

Bexster

chelseablue

Definitely investigate a water meter.

I live in a 3 bed house and we pay £17 a month for water on a meter

pollyanna24

Sounds good re the water meter. How do I go about getting one? Just ring up the water board.

What if it turns out to be more money? Arrrggh!