The Piano Diary

glass_half_full

 Dear diary and all,

 I like this time of year, there is a kind of lull between Christmas and the New Year where nothing much happens. I planned to have this week off so that I could recharge the batteries. I’m finding that now I have had a few days off work I am regaining a bit of perspective. This December has been more spendy than planned. I think it being a five week month was part of that. In addition, we have loosened the purse strings and OH has spoiled DS a bit. We have spent a bit more on subscriptions for TV and stuff, to some extent I am relaxed about that since we aren’t spending on big ticket things like weekends away due to lockdown. Thus I think that some extra home entertainment is ok. We went out for a meal on Christmas Day. We really enjoyed that and not having anything to clear up was a real treat. The spends for December are nearly done and I will be able to reset the budget for the New Year. This week I aim to do a bit or reorganising and decluttering in the house, I find it really therapeutic.

My financial goals for 2021 are not really any different from 2020, just staying focused and more of the same. Overall plan to pay £2000 per month off the mortgage and maintain the increased pension payments. This is very possible, but I need to get my MSE head back on and tighten the budget mindset a bit. Nothing drastic, but just staying focused on the goal.

One other bit of news, it looks like we may be getting a rescue dog! We have been trying ever since DS came home back in June/July but no luck until now as there has been a lot of interest. But we had a call with the rescue centre yesterday and its looking very promising so we are very excited, should know for sure in the next few days.

South_coast

Ooh, fingers crossed for the dog!

savingholmes

Hope you get the dog you want. We have a gorgeous dog we got from a puppy and a rescue cat. They bring a lot of joy into your lives (and interrupt almost every video call of course).

glass_half_full

South_coast said:

Ooh, fingers crossed for the dog!

savingholmes said:

Hope you get the dog you want. We have a gorgeous dog we got from a puppy and a rescue cat. They bring a lot of joy into your lives (and interrupt almost every video call of course).

Thanks both ! He is a Jack Russell, has to go to the vet to have everything checked out and then we have a call with them later this week. Then they will visit us with him so we can meet him.

glass_half_full

Dear diary and all,

I have done a little YNAB spend analysis for 2020 vs 2019. It looks like overall spend was down (unsurprisingly) by around £5500 and this went to the mortgage. It brings home to me the impact of the big ticket items like cars and holidays and the benefit when these are reduced. There are a couple of areas which surprised me. Groceries are really high, but then most of this year we have been buying all our food for 3 people, breakfast, lunch and dinner with reduced eating out. DS has been living with us since June so I guess an increase was to be expected. The broadband and TV hasn’t come down by as much as it should since we have taken out some TV subscriptions, but again this maybe is to be expected with lockdown etc. I guess there are areas for improvement as ever.

2020 Spend Review

I analysed my spending in 2019 so here is a comparison for 2020

2019 Mortgage - £13,000 (balance outstanding around £64,000).

2020 Mortgage £18,760. (+£5,760) Balance outstanding £46,500.

2019 Car loan - £10,000 (balance still outstanding around £7,000)

2020 £7,000 paid off car loan.

2019 Gas and electricity £1,800

2020 £1,615 (-£185) switched provider

2019 Supporting DS at Uni - £1,900

2020 - £2,116 (+£216)       

2019 Dental - £1,700 had a lot of work done

2020 - £452 (-£1250)

2019 Broadband, TV and phone £1600

2020 - £1,419 (-£181) switched provider

2019 Groceries - £6,945 - £578 per month

2020 - £8,772!  (+£1,827)- £731 per month. Increased I think due to DS being with us plus less eating out.

2019 – Eating out - £1800 - £150 per month 

2020 - £1,345 (-£455)

2019 – Holidays - £5,000

2020 - £903 (-£4100) Much reduced due to virus.

2019 – Petrol - £1,000

2020 - £610. (-£390).

2019 – pet related - £1,000

2020 - £0 (-£1,000)

Summary

Increased spend £2,043

Decreased spend £7,561

Net difference £5,518. Most of this difference has gone to the Mortgage.

I rang up my mortgage provider to check the situation regarding the early repayment charges applicable on the mortgage. I am on a fixed rate mortgage, the original term was 7 years, it now has 4 years and 7 months to go. I can overpay by up to 10% per year, above that the ERC applies and will be 3% in January 2021 and then drops to 2% in January 2022. I think it is a measure of how much I want this mortgage gone that I am willing to pay this to see the back of it. In 2020 I have been paying off different OPs each month basically depending on how much money is available at the end of each month. Going forward, I’ve decided to fix the overall monthly payment at £2,000 which includes an OP of £1,090. This is in the budget so I will treat it as the standard payment each month.

I’ve compared paying off the mortgage in 2 years and paying the ERCs and just sticking to paying 10% OPs per year and avoiding ERCs and it will cost me slightly less to pay off in 2 years. This is because the mortgage interest rate is 2.44% whereas the ERC is 3% in year 1 and only 2% in year 2 so the ERCs in total will be less than the interest I would pay. Actually, this is more an emotional decision rather than a purely rational one to be fair.

The nice thing now is that each month will take a big nearly 5% chunk out of the mortgage.

Feels good to commit to the goal in this way.

We will hear more news about our rescue dog on Sunday. I’m not sure if the visit can still happen with the increased lockdown situation.

Happy New Year all!

 

South_coast

I've been paying the ERC's on my mortgage. Like you, when I crunched the numbers it came out cheaper overall - plus, as you say, it psychologically feels so much better to just get it gone!

Interesting to see the comparison in spending, seeing the total and what you've been able to do with the difference makes it really tangible. 

glass_half_full

South_coast said:

I've been paying the ERC's on my mortgage. Like you, when I crunched the numbers it came out cheaper overall - plus, as you say, it psychologically feels so much better to just get it gone!

Interesting to see the comparison in spending, seeing the total and what you've been able to do with the difference makes it really tangible. 

Hi Southcoast, thanks for this. It's good to know someone else is paying the ERCs. I think we are on the same page on this. 
 I was actually a bit surprised by what the spend comparison showed. Its good to look at the bigger picture sometimes, I think i get lost in the detail sometimes!

savingholmes

There's a lot of security in the mortgage being gone. Happy New Year.

glass_half_full

Dear diary and all,

My favourite MSE day of the month is today when my mortgage payment goes out. So a £2,000 payment including a £1,000 overpayment takes the balance down to £44,585. I get to move two marbles across between my jars. Its nice to take a chunk out of the amount remaining. Its motivating, reminds me of when I was getting towards the end of my car loan, I just wanted it gone and channelled all my spare cash and any windfalls towards it. There may be some more savings due or at least cost avoidance as I have my car insurance and my gas and electricity contracts due for renewal in February and March. Any extra money this year will go towards this. I’m not going to set a target but I would like to think I can get it below £20,000. I’m going to seek out some more MSE challenges to get me motivated. The budget is a bit tight since increasing the regular mortgage payment. But this is ok, I know it can take a couple of months for things to settle down.

OH and I are at the end of our first three weeks of work since going back. Very much reminiscent of lockdown one. Work continues at quite a busy pace, just from home. DS’s teaching practice is of course very different. He is supporting his teaching mentor with going in one day a week and remote teaching.

OHs parents have had a vaccine, not sure which one. This is a great relief since their safety had been our main worry over the last months. I hope everyone in the vulnerable category receives their vaccine soon.

Good luck everyone with your moneysaving plans!

caeler

Hi @glass_half_full I've also paid an ERC and will have another one when I pay the mortgage off but in saved interest it definitely works out okay.  Obviously I'd rather not pay an ERC and strangely Nationwide refunded most of the last one due to "loyalty and unused allowance" which was odd as I had used up the 10% I had been allowed to pay for 3 years on the trot.  I did not question it!  PS.  Woop woop on your balance, getting close!