Eating the Frog

Hi all,

I've lurked on and off for many years and seen some great successes and think now is a good time to write down my thoughts and let you all hold me to account.

So a bit about me, there is me (35) oh (40) son (4) and daughter (1) in our little family. While childcare is expensive I don't find the day to day living costs of children expensive though I think I will when they are bigger.

We bought our house for £197k in 2011 with a £179k mortgage. In that time I have made some big overpayments and reduced it to £103k now, so not bad for 7 years.

2 years ago I went from being employed on a good wage to being self employed so really took a hit money wise while the business built up and had my second child, but I have had a good few months recently and seem to be back on track.

The elephant in the room is my pension. When I was working I paid the minimum so only have small pots. I would like to retire when I'm 60 so I need to put a lot in the pot to make that happen. Mortgage-free is also something I aspire to.

So my aims for the next few years are:
1) build up a £200k pension pot
2) pay off my £103k mortgage

I have some big numbers to hit! I'm usually good with the house finances but since going self employed they have gotten a little messy and need some attention over the next few weeks.

Thanks for reading....
My Targets
Pension - £600/£200k
Mortgage - £150/£103k
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Replies

  • TropicallyTropically Forumite
    427 Posts
    Fifth Anniversary 100 Posts Name Dropper
    ✭✭
    Welcome! Good luck to you in your journey. You could post an SOA if you wanted ideas on where you could change your spending. Are you all set up with all the self-employed perks and benefits?
    Mortgage started at £318,000 in June 2016. Original MF - 2041 :eek:
    2nd Property Mortgage at £275,000. Mortgage free: 2049 :eek:
    Total OPs: £29529
  • I know I need to do a SOA but it's a complicated one!

    I only take a small wage -I'm a limited company so receive my earnings in bulk dividends. So my salary is not as standard as static as others, but I'm also hoping to use the bulk money to pay off pension and mortgage rather than day to day living costs.

    I think I take advantage of self-employment? An accountant does my books and at year end gives me a little bonus from her accountancy magic. I'm not sure what else I can do on that front as I am technically an employee, I just own the company.
    My Targets
    Pension - £600/£200k
    Mortgage - £150/£103k
  • BetterthaneverBetterthanever Forumite
    584 Posts
    500 Posts Third Anniversary Combo Breaker
    ✭✭
    Sounds like your head is in the right place to hit your goals. I look forward to following your progress.
  • So I finally did it - a rough cut of my SOA.
    But it's not entirely correct - I could earn more than this in a year - I will just take it in dividends or pay it straight into my pension fund.

    My partner earns more than this - this is the amount he pays into the house pot, he's quite generous with his leftovers for our social life and holidays.

    Changes I have already made are remortgaging to reduce the % from 4.99% variable to 1.89% fixed rate reducing our payments from £635 to £465 a month.

    Also I have signed up for tax free childcare so I will get a 20% top up from the government reducing this payment in the future.

    Gas and electricity are combined.

    Phone and internet are free with my partners work.

    Mobile rate is high but is fixed for another year while I pay off the phone.

    Grocery could come down, I would need to focus on this. I already shop in Aldi and buy meat from my local butchers in bulk and freeze. I cook most things from scratch but we get through lots of fresh fruit like strawberries and grapes each week. I won't cut back on giving my kids the good stuff to eat!

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 2
    Number of children in household......... 2
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1200
    Partners monthly income after tax....... 1250
    Benefits................................ 150
    Other income............................ 0
    Total monthly income.................... 2600


    Monthly Expense Details

    Mortgage................................ 461
    Secured/HP loan repayments.............. 0
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 160
    Electricity............................. 89
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 69
    Telephone (land line)................... 0
    Mobile phone............................ 38
    TV Licence.............................. 12.5
    Satellite/Cable TV...................... 0
    Internet Services....................... 0
    Groceries etc. ......................... 400
    Clothing................................ 50
    Petrol/diesel........................... 100
    Road tax................................ 10
    Car Insurance........................... 20
    Car maintenance (including MOT)......... 10
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 750
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 100
    Contents insurance...................... 100
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 50
    Haircuts................................ 10
    Entertainment........................... 100
    Holiday................................. 0
    Emergency fund.......................... 0
    (Unnamed monthly expense)............... 0
    Total monthly expenses.................. 2529.5



    Assets

    Cash.................................... 10000
    House value (Gross)..................... 210000
    Shares and bonds........................ 10000
    Car(s).................................. 12000
    Other assets............................ 0
    Total Assets............................ 242000



    Secured & HP Debts

    Description....................Debt......Monthly...APR
    Mortgage...................... 103000...(461)......1.89
    Total secured & HP debts...... 103000....-.........-


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



    Monthly Budget Summary

    Total monthly income.................... 2,600
    Expenses (including HP & secured debts). 2,529.5
    Available for debt repayments........... 70.5
    Monthly UNsecured debt repayments....... 0
    Amount left after debt repayments....... 70.5


    Personal Balance Sheet Summary
    Total assets (things you own)........... 242,000
    Total HP & Secured debt................. -103,000
    Total Unsecured debt.................... -0
    Net Assets.............................. 139,000


    [i
    My Targets
    Pension - £600/£200k
    Mortgage - £150/£103k
  • lulabelle1lulabelle1 Forumite
    2.7K Posts
    Tenth Anniversary 1,000 Posts Combo Breaker
    ✭✭✭✭
    Hi, might be worth double checking the figures you've input for buildings and contents, 200 per month combined seems high? Is it not 200 per year? so more like £8.50 each per month?
  • Oops you're right - its about £200 a year
    My Targets
    Pension - £600/£200k
    Mortgage - £150/£103k
  • beanieloubeanielou Forumite
    78.4K Posts
    Part of the Furniture 10,000 Posts Mortgage-free Glee! Name Dropper
    ✭✭✭✭✭✭
    So that makes your SOA a lot better :)
    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.***
  • I had a lovely money saving break away with the kids last week. We went to Butlin's for their Christmas week and because it was term time is was only £200 which seems like such a bargain for accommodation and all the entertainment, rides and soft play they have. We went self catering and I took the slow cooker for a couple of meals in and ate out a couple of times too. It was lovely spending time together while the children are so young.

    Anyway back to work this week but it will be a slow one because everyone is winding down from Christmas. I will also send out my invoices at the end of the week and they will be on the low side as December is only a two week month for me as I had a weeks holiday and Christmas week off. Nevermind, the last few months have been plentiful and the business bank account is looking healthy for my future wages.

    The next frog I need to eat is energy. I signed up to Coop about 18 months ago so I will be out of the cheap phase now and need to look again. I also had National Grid call me to fit a smart meter but as the call was unsolicited and they were asking for my personal details I ended it and will call them another day to see it was genuine. I just feel that you can't be too careful with your details these days.

    So my mission this week is to look into smart meters and compare energy suppliers. I guess I will need to go out into the rain today to get the readings.
    My Targets
    Pension - £600/£200k
    Mortgage - £150/£103k
  • enthusiasticsaverenthusiasticsaver Forumite, Board Guide
    12.9K Posts
    Eighth Anniversary 10,000 Posts Name Dropper I've been Money Tipped!
    ✭✭✭✭✭
    You seem to have a pretty good handle on your finances. Paying insurances annually is cheapest so hopefully you do that. Starting a pension is a must really for you at 35. The earlier the start date the better. We retired at 58 simply because we invested in pensions from our 20s. It is not too late but you have some catching up to do. Hopefully your DH has an occupational one.

    What we found was best over the years both with regards to pensions and mortgage overpayments is small regular amounts add up over time and eventually you get to a point where you don't miss them. At the moment you have the weighty cost of childcare but presumably when your DD is 3 she will get the 30 free hours? You are right though in that as they get older having savings for school trips, university, computers etc is a bonus. We aimed to get mortgage free by the time our oldest started uni and I also returned to full time work when they were about 14 and 16 to save up towards the costs for driving lessons, uni and house deposits.
    Early retired in December 2017. Debt counsellor for a High Street bank in a previous life.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages and Endowments, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected]

    Save £12k in 2022 challenge #36 0/£12,000
  • You seem to have a pretty good handle on your finances. Paying insurances annually is cheapest so hopefully you do that. Starting a pension is a must really for you at 35. The earlier the start date the better. We retired at 58 simply because we invested in pensions from our 20s. It is not too late but you have some catching up to do. Hopefully your DH has an occupational one.

    What we found was best over the years both with regards to pensions and mortgage overpayments is small regular amounts add up over time and eventually you get to a point where you don't miss them. At the moment you have the weighty cost of childcare but presumably when your DD is 3 she will get the 30 free hours? You are right though in that as they get older having savings for school trips, university, computers etc is a bonus. We aimed to get mortgage free by the time our oldest started uni and I also returned to full time work when they were about 14 and 16 to save up towards the costs for driving lessons, uni and house deposits.

    I have bits and pieces of pensions lying around but honestly I want one big solid pot and they become a bonus. I am going to try and make a few weighty payments over the next few years, I will prioritise this over a wage increase for me as I'm happy with a fairly simple lifestyle. I know you can put up to £40k in per year and while that may not be achievable, it's what I will have in my sights because if I could in five years my pension pot could be nearly complete! Because I work for myself my earnings potential is unknown, it purely depends on the work available at the time. My oh also has a very good company pension so he will be in a great place when he retires.

    Yes I do annual insurances and always shop around. In fact I keep insurances to a bear minimum because I think they are a quick way to lose cash. I'd rather put it into savings. I have never had phone insurance, but also I have never lost a phone. I figure I have probably saved the amount of about three iPhones worth by not taking out the insurance over the years if you see what I mean?
    My Targets
    Pension - £600/£200k
    Mortgage - £150/£103k
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