Mortgage Meanderings

edinburgher

It's all relative AFR - it's not what you spend, it's what you don't!

A_Frayed_Knot

edinburgher wrote: »

It's all relative AFR - it's not what you spend, it's what you don't!

True - Don't spend - overpay !!!

WhencanIretire?

Hello everyone!

Thanks for the warm welcome, congratulations and the interesting points being made.

@AFK - one more payment until MF! Wowzers, that's a great Christmas present to yourself!

@Edinburgher - I know!! I'm trying to make the most of all the little things you take for granted when you're child-free i.e. sitting down; peace and quiet; keeping the house relatively in order.

@Bexster - as you say...the plan is to increase income; decrease spending; and try to avoid lifestyle creep in order to get to a more sustainable lifestyle. My official retirement age (as it stands) will be 68, but there's already talk of putting this up to 70. My parents are getting to this age and, although generally healthy, things are slowly starting to go wrong - cataracts; heart issues; pre-diabetes - I wouldn't want to be trying to cope with all that, as well as still having to work full-time

To answer a few questions/ points that were made:

Have only recently made it to £30k, started this job in June. From last October to May I on about £24k but more like £27k with overtime. Prior to this I was at Uni in London for 3 years, averaging about £1100 a month (made up of a bursary and part-time wages), with rent and bills coming to about £700. So I'm feeling pretty rich at the minute! Vague plan at the minute is to save up a load of money, and then look for a property that could bring a profit - i.e. a fixer-upper; a corner plot that could be built on and both properties sold off for profit. We're in a city where you can still get these sort of places for £120-£160k, though not in the area we currently live in.

My idea of retirement is working a few days at a month for a regular income with a (few) passive income streams and side hustles to keep me going. I rented out my flat for a few years, which to be brutally honest was ridiculously easy money. Mostly as nothing ever went wrong, but did have a guilt complex alongside it, so will have to think about what my passive income streams will be. I've no real plans with what I'd do with my time once I get to this point, just enjoy relaxing and not having the stress of being a full-time employee. Travelled a fair bit in my 20s so only have a few more countries on my must-visit list. I love the idea of eventually buying a bit of land/forest out in the country and having some kind of holiday cottage/food and drink business.

As I work long shifts (13hrs paid) over a relatively short work week (35hrs/week), my full time work schedule is 11 days a month, so I should have time to work on side hustles to increase my income. I used to have a whole host of these side hustles (selling second-hand clothes as vintage; a market stall; renting out parking spots etc.) which earned me another £10k-ish a year. I need to get back on to these! They all tailed off when I started uni in 2014, as I was too busy alongside my course and job. Now I've got my qualification there's more things I can do on the side - agency work, providing training etc., which are paid at a decent rate. This extra income can then be invested/saved, as well as spare money from my income from my job. I've got ideas, just need to get on with it all...

As AFK says the mortgage payment to income ratio should really work in our favour. I live on less than half my income. After my share of bills, food, petrol and socialising I put £250 into a sinking fund, £300 to an S&S ISA and an Index linked tracker and at the minute, save around £600 into my baby fund. That's at about £2200 at the minute, and three more paydays until mat. leave so should be at £4000-ish (spending dependent). Hate shopping though, so not sure what I'll be spending it on. Might just add it to my general retirement/over-payment fund

Right, that was quite an essay. Hello if you're still reading! Am going to see if I can work out how to follow everyone's diaries and see about posting an SOA.

Happy Sunday all!

WhencanIretire?

Right, here's my SOA (shows my half of the bills, as bf and I have separate accounts). Some of the figures might not quite add up - I've edited it a bit to make it more realistic to what I actually spend. I've changed my budgets around recently so still settling in with that. We're also in that phase when you move house where the bills are still a bit up in the air - both water and council tax should go down in April. Should be about £100/month, this will go to overpaying!

Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details:
Monthly income after tax................ 1850
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1850

Monthly Expense Details
Mortgage................................ 233
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 30 - Around £700/year but not due until July 2019
Council tax............................. 80
Electricity............................. 13.25
Gas..................................... 13.25
Oil..................................... 0
Water rates............................. 27.5
Telephone (land line)................... 0
Mobile phone............................ 9
TV Licence.............................. 6
Satellite/Cable TV...................... 0
Netflix .........................................4
Internet Services....................... 12.5
Groceries etc. ......................... 100 - Budget used to be £35/fortnight but have recently increased this. Probably won't spend all of this - anything left over transferred to Baby Fund, for now.
Clothing................................ 40
Petrol/diesel........................... 70 - Never spend this much, anything left at end of month gets transferred to Baby Fund
Road tax................................ 0 see car fund - I put £120 aside monthly to pay for annual car expenses, and maintenance
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 - need to get this sorted - have been getting quotes this afternoon. Should be about £100/year, taking cashback into consideration.
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts, make up and toiletries......... 20
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Vanguard Index Funds.................... 200
Nutmeg S&S ISA.......................... 100
Car Fund ............................... 120
Professional fees....................... 10
Union fees ............................. 16.4
Total monthly expenses.................. 1270.6


Assets
Cash.................................... 21500
House value (Gross)..................... 152000
Shares and bonds........................ 6000
Car(s).................................. 500
Other assets............................ 0
Total Assets............................ 180000


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 110000...(465.7)....1.99
Total secured & HP debts...... 110000....-.........-

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


Monthly Budget Summary
Total monthly income.................... 1,850
Expenses (including HP & secured debts)..... 1270
Available for debt repayments........... 600
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 600

Personal Balance Sheet Summary
Total assets (things you own)........... 180,000
Total HP & Secured debt................. -110,000
Total Unsecured debt.................... -0
Net Assets.............................. 70,000

jenni_fer

Congratulations! and good luck!

WhencanIretire?

Thanks jenni_fer!

I keep a spending diary on the notes in my phone, and tend to do a little review halfway through the month to see how I'm doing. Have had friends visiting from Australia this week, so am a little behind this month.

So from the 1-15th:

- I had 10 No Spend Days: I aim for 15 a month so this is good. I don't include any fixed bills that go out, just discretionary spending.
- I spent: £30 on fuel; £56 on groceries; £24 on socialising; and £105 from my 'Gifts' sinking fund category - £215 in total. Without the Xmas pressies £105 doubling my spent, I think this is OK. We've spent more on food than usual this month. Only been moved in for 10 days so got some stuff for the freezer/store cupboards.

The second fortnight of the month will be more expensive ('tis the season tho, I guess). As I said, had friends to stay this week - so went for a few drinks/meals, as well as a Christmas lantern festival. We've got two more sets of guests before the month is up. Also got talked into a 4D scan by my boyfriend which was £80 from the baby fund. Normal service will resume in January, and I'll go back to my Scroogey ways!

After posting on Sunday I decided to round down my various saving accounts to the nearest £100 (£50 for one as it was in the £90s), and transfer this money over to the mortgage. I also got £13.20 cashback so rounded this up to £15, and took £18 of rounded-down money (I round down my current accounts to the nearest pound and send to savings) and sent that over as well. This all added up to £170, so this month I've made £184.15 of over-payments! According to the over payment calculator, this has saved me £119 in interest over the course of the mortgage - take that HSBC!

Hope everyone is well,

Liz

A_Frayed_Knot

[FONT=&quot]"After posting on Sunday I decided to round down my various saving accounts to the nearest £100 (£50 for one as it was in the £90s), and transfer this money over to the mortgage. I also got £13.20 cashback so rounded this up to £15, and took £18 of rounded-down money (I round down my current accounts to the nearest pound and send to savings) and sent that over as well. This all added up to £170, so this month I've made £184.15 of over-payments! According to the over payment calculator, this has saved me £119 in interest over the course of the mortgage - take that HSBC! "[/FONT][FONT=&quot]
[/FONT]
[FONT=&quot]Music to my ears - well a fantastic read, anyway [/FONT]:T just shows you !!! all these knotty knots, works wonders :j keep going with that every month and you will be well on your way

WhencanIretire?

Firstly, Merry Christmas and a Happy New Year, to one and all!

Thanks AFK - it certainly all adds up, paid off a credit card and overdraft earlier than planned a few years ago using this method. Just seen your signature - MF, how exciting!

As predicted, the second half of the month was more spendy than the first half -
Food: £65 - £25 of this was on reduced stuff for the freezer on Xmas eve, my annual tradition
Gifts: £74
Social: £61
Baby: £80
Still managed to have another 10 No Spend Days, so 20 in total this month. Have reduced my food budget to £65 for January, as have overspent in December by £35. We have tonnes of food in freezer, so this will be just for fresh stuff.

On boxing day, I sent over the spare money left over from my petrol account (£25) and another £15 that bf owed me for a gift for his Mum. I'd already taken it out of my gift fund so it was accounted for. So £40 to HSBC.

I got paid on Friday (£1856.70). My budget assumes I'll get paid £1850 and my bills; standing orders for petrol, food, and socialising etc.; and direct debits to S&S ISA comes to £1270. I had more in my baby fund than I thought, so topped this up by £350 to make it a round number. Also, I've two weeks of annual leave in January so will only be at work 6 days - petrol costs about £3 return, so I reduced my fuel budget to £40. I sent the extra £30 that would normally be used for petrol and the spare from my wages over to HSBC - a grand total of £310. (Now I've written this down the maths doesn't seem to make sense - I'll see later in the month if I've messed something up!)

So total over-payments for December have amounted to £534.15 - according the mortgage calculator, this will save £329 in interest and a month off the term...not bloody bad considering I wasn't going to try and over pay at all this month! Can see I'm going to get obsessed with it.

Mortgage payment should go out and interest added on tomorrow/maybe weds - will be interesting to see if anything changes due to overpayments...

Cheers all, Liz

WhencanIretire?

Happy New Year all!

Mortgage balance on the 2nd Jan stood at £108899.42, after payment of £465.77 taken off and interest of £185.19 added on.

Made a few over-payments so far:
1/1/19 £13 - cashed in a bag of coppers in the coinstar machine in Asda and spent it in the reduced section. Money from food account transferred over.
2/1/19 - £86.23 - regular over-payment by standing order.
2/1/19 £5.19 - to make it a round number
4/1/19 £100 - sold some tickets for a gig we now can't go to, already accounted for so sent this over too.

This all comes to £204.42, and balance now stands at £108,695. Going to set myself a mini challenge to get the balance down to £108,500 by my next pay day at the end of January. A few companies owe me money (Ikea, Virgin) and going to look at switching a couple of banks accounts to make this happen.

Cheers, Liz