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The Piano Diary

edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
264 replies 21.8K views
glass_half_fullglass_half_full Forumite
492 Posts
Fifth Anniversary 100 Posts Name Dropper Debt-free and Proud!
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edited 30 November -1 at 1:00AM in Mortgage-Free Wannabe
Good morning diary and all,

I recently became debt free after 31 months of debtbusting over on Debt Free Wannabe, following the advice and diaries on this site. Here is my previous diary

My debt free diary

I have found keeping a diary really helpful in staying focused and also therapeutic being able to think things through and clarify my thoughts. I want to start a new diary here to signify the start of the next phase of the journey and a change in purpose and goals.
My household consists of me, my OH, we have been married for 22 years and DS who is 20 and has just finished his first year at University and last but not least the cat who 8 years old, spoilt and pampered! I work at a University in a teaching role and for hobbies do mountain biking, reading and I am learning the piano. The title of the diary is about my goal to ultimately spend less time working and more time on hobbies and interests, including the piano!

My overall goal is to reach financial freedom and be able to semi- retire/retire and pursue my own interests. I may continue to work, but it will be because I want to not because I have to. To achieve this I need to pay off the mortgage and save enough into pension and savings to allow this to happen.

Financial Goals
The mortgage currently stands at £80,000 and is up for renewal in October. My aim is to take out a mortgage with a term of 8 years (by which time I will be 60) but aim to repay it in 5 years with overpayments.
In terms of the pension, I currently make contributions of 12% but I am increasing this to 18% in a month or so when a pay rise comes through. I have a small number of DB pensions from previous employers and £140,000 in two DC pensions. In terms of savings, we have nothing other than a small emergency fund but the aim is to build these up now we are debt free. I would like to have savings of £5,000 to £10,000 as a rainy day fund. I need to save up for a replacement car over the next 12 months as the current car is 14 years old and is getting to the end of its life.

Personal Goals
I have found during the last several months that the money goals are really just a means to an end. For me I want to reach the point in the next 5-8 years where I can step back from the day to day and spend more time on projects I want to pursue just because I want to do them. I would love to have the time for example to write a book, to travel, to do various sports and activities. I also want my OH to have the same options and be able to step back from the work side of things.

SOA
I have done an SOA below to help me take stock of where we are. The three adults are myself, OH and DS who is at Uni but lives with us when not there. There should be around £1500 per month available to achieve the financial goals listed above.
Look forward to sharing the journey with you.

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details

Monthly income after tax................ 2585
Partners monthly income after tax....... 1989
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 4574


Monthly Expense Details

Mortgage................................ 642
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 247
Electricity............................. 112
Gas..................................... 0
Oil..................................... 0
Water rates............................. 33
Telephone (land line)................... 0
Mobile phone............................ 27
TV Licence.............................. 12
Satellite/Cable TV...................... 0
Internet Services....................... 112
Groceries etc. ......................... 500
Clothing................................ 100
Petrol/diesel........................... 235
Road tax................................ 27
Car Insurance........................... 65
Car maintenance (including MOT)......... 50
Car parking............................. 0
Other travel............................ 65
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 38.15
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 16
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 50
Entertainment........................... 50
Holiday................................. 100
Emergency fund.......................... 0
Newspaper............................... 9
Hobbies................................. 82
Spotify................................. 10
Dry cleaning............................ 13
Societies............................... 15
Union................................... 42
Allowance DS............................ 100
Cash.................................... 200
Cleaner................................. 100
Total monthly expenses.................. 3072.15



Assets

Cash.................................... 500
House value (Gross)..................... 350000
Shares and bonds........................ 0
Car(s).................................. 1500
Other assets............................ 0
Total Assets............................ 352000



Secured & HP Debts

Description....................Debt......Monthly...APR
Mortgage...................... 80000....(642)......3
Total secured & HP debts...... 80000.....-.........-


Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-



Monthly Budget Summary

Total monthly income.................... 4,574
Expenses (including HP & secured debts). 3,072.15
Available for debt repayments........... 1,501.85
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 1,501.85


Personal Balance Sheet Summary
Total assets (things you own)........... 352,000
Total HP & Secured debt................. -80,000
Total Unsecured debt.................... -0
Net Assets.............................. 272,000


Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.
Mortgage now - £37,500 I MFW #55 £4,759/£12,000 I Countdown 19 payments left
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Replies

  • beanieloubeanielou Forumite
    76.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
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    Happy shiny new diary :)
    Wishing you well on your journey.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~**
    MFW. Finally mortgage free February 2021****
    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. ***Be the difference.***
  • Busy_Mee1Busy_Mee1 Forumite
    1K Posts
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    Welcome to MFW and well done on getting debt free. I am also on the road to early retirement to will watch with interest how you get on.
  • julicornjulicorn Forumite
    1.4K Posts
    1,000 Posts Third Anniversary Name Dropper Photogenic
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    Happy new diary! Really looking forward to seeing how you get on :)
    Original mortgage: December 2017, £203,495
    MFW start: April 2018, £201,800
    Current: £113,200 (-£21,000 overpayment savings pot)
  • glass_half_fullglass_half_full Forumite
    492 Posts
    Fifth Anniversary 100 Posts Name Dropper Debt-free and Proud!
    ✭✭
    Hi beanielou, Busy Mee and julicorn,

    Thanks for your welcome messages :beer:. Its nice to meet you all! I see you have diaries so I will follow up with your stories. I enjoy following everyone's journeys!
    Mortgage now - £37,500 I MFW #55 £4,759/£12,000 I Countdown 19 payments left
  • glass_half_fullglass_half_full Forumite
    492 Posts
    Fifth Anniversary 100 Posts Name Dropper Debt-free and Proud!
    ✭✭
    Good afternoon all,

    Im thinking about the goal I want to set myself regarding the mortgage. I would welcome comments and advice from fellow MFWs with your experience etc of what works, doesnt work. During my debt busting I ignored the mortgage, it was just ticking away in the background to be paid off at some future date. Now I want to apply the same focus to paying it down as I did the debt.

    The current balance is £79,600 with 13 years to go. This is too long as I will be 64 by then.
    I want to shorten the term. Worst case I want it gone by the time I am 60, so shortening the term to 8/9 years. Best case, I would love it gone in 5 years.

    In terms of affordability. At the moment the mortgage payment is £642. My SOA shows I have £1500 available. However, there are some other considerations. I have other goals, for example over the next 12 months I want to save up for a replacement car, maybe £8K. Then I would like to save up a buffer of, say £10K over time. Finally, after nearly three years of serious belt tightening, I would like just a bit more fat in the budget!

    My current thinking is to remortgage on an 8 year term. This would increase payments to around £950. Affordable and I can then use overpayments to shorten it further if feasible.
    Or should I be more ambitious and shorten the term still further and guarantee it gets paid off sooner. Or is that too risky? My sense is that overpayments have the same effect as shortening the term with less risk.

    My current deal ends at the end of October 2018. My current provider allows you to switch a few months earlier (presumably just with them).
    Mortgage now - £37,500 I MFW #55 £4,759/£12,000 I Countdown 19 payments left
  • Dimps_123Dimps_123 Forumite
    94 Posts
    First Anniversary
    Hello :-) I'm kind of doing it the other way round to you. I've been playing the piano for, wow 34 years - what happened to that time?! But just recently started learning how to debt bust. I'd love to help out if you have any piano questions and I'll keep a look out for any debt busting tips you might have.
    xx
    DIMPS
    Working towards being debt free :rotfl:June 2022
  • glass_half_fullglass_half_full Forumite
    492 Posts
    Fifth Anniversary 100 Posts Name Dropper Debt-free and Proud!
    ✭✭
    Dimps_123 wrote: »
    Hello :-) I'm kind of doing it the other way round to you. I've been playing the piano for, wow 34 years - what happened to that time?! But just recently started learning how to debt bust. I'd love to help out if you have any piano questions and I'll keep a look out for any debt busting tips you might have.
    xx

    Hi Dimps!
    That sounds like an excellent plan, thank you! :beer: I think playing the piano is way more difficult than debt busting. I really enjoy it and it is my escape. I have persevered with it and I have a weekly lesson. We have an upright which belongs to my wife’s parents but they have let us have it since I am now the only one of us who plays, as well as DS who sits there playing improvised jazz which I love to listen to.
    Mortgage now - £37,500 I MFW #55 £4,759/£12,000 I Countdown 19 payments left
  • AlexLKAlexLK Forumite
    6.1K Posts
    Debt-free and Proud!
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    I, too, was attracted to have a look at your diary by the title. I play and teach (a little) piano and violin. :)

    Finances wise, I always admit I'm not really the best person to answer questions as I suppose my position is a bit different to most. However, I would say review your spending and make the £10k buffer a priority. Re. the mortgage, would you be strict enough to make regular overpayments? I think that's something to be considered when thinking about reducing the term.
    2018 totals:
    Savings £11,200
    Mortgage Overpayments £5,500
  • Busy_Mee1Busy_Mee1 Forumite
    1K Posts
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    Much depends on what sort of mortgage deal you currently have, what interest are you paying and does it allow overpayments. Remortgaging sometimes attracts fees which will need to be factored in.

    Shortening your term will mean that you lose flexibility around payments but will have the certainty that the mortgage will be paid earlier. Keeping the same term but overpaying will give you control over how much you pay but requires discipline to ensure that you pay the mortgage off and you will need to check the product to see what overpayments it allows. Some only allow 10% a year.
  • glass_half_fullglass_half_full Forumite
    492 Posts
    Fifth Anniversary 100 Posts Name Dropper Debt-free and Proud!
    ✭✭
    AlexLK wrote: »
    I, too, was attracted to have a look at your diary by the title. I play and teach (a little) piano and violin. :)

    Finances wise, I always admit I'm not really the best person to answer questions as I suppose my position is a bit different to most. However, I would say review your spending and make the £10k buffer a priority. Re. the mortgage, would you be strict enough to make regular overpayments? I think that's something to be considered when thinking about reducing the term.

    Hi AlexLK,
    Thanks for dropping in on my diary:)! And nice to meet another musician! I hope to be posting some more piano related comments in due course once I get past the initial money focused stuff. That is a good point regarding overpayments, I have been thinking about that and have come to some conclusions on that which I am going to put in my post below.
    Mortgage now - £37,500 I MFW #55 £4,759/£12,000 I Countdown 19 payments left
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