Moneymagic's mortgage and money ramblings

moneymagic

I have been a lurker on these forums for many, many years now and have always toyed with starting my own diary but continuously put it off. So now that we are approaching the finale of 2018 and with a whole range of goals for the next few years I thought “sod it, no time like the present!”

This diary has a few purposes

1. Accountability (if it is written down for the world to see then I must do it)
2. Get other people’s ideas and opinions (all welcome – even if you disagree with my plans and strategies, it’s great to hear a different viewpoint)
3. Maybe help or inspire others towards their financial goals

So here is a little background – in my house there is just me (29) and OH (31). 2018 was quite a spendy year for us. We got married early on this year, had the honeymoon of a lifetime this summer and bought our very first house in September.

I am aware this is MFW but being MF early is just one of my “big three” financial goals, the other two being savings/investments and pensions. I plan to attack all three areas over the next few years, so hopefully you all don’t mind if this diary goes a little off track.


I typed out a first post in Word and it was eye-watering long!!! So to keep it interesting, I will break it up into much more manageable and easily digested chunks.

MM

moneymagic

Our current joint takehome is approx. £2800 per month. There has been talk for a few months of redundancies in OH work and a few weeks ago quite a few people were laid off. OH wasn’t made redundant but has been forced into a similar role on a part time basis. This is obviously not ideal with quite a drop in pay which is reflected in our current takehome value. He will be heavily job seeking in the new year so hopefully we will get a boost over the next few months. I am due a payrise in January although it will likely be just 2/3%. I believe that there will be a few promotional opportunities over the course of the next year, so fingers crossed I will be considered for one of these posts.

In terms of outgoings, one of our biggest expenses is running our cars. I work in the middle of nowhere and OH also does a fair bit of mileage so we can easily get through £70/80 per week on petrol alone. OH is planning on applying for jobs much closer to home so that he can walk/bus to work. Unfortunately, this is not an option for me, but going down to one car would save us quite a bit of cash.

I am quite on top of bills and groceries – I monitor our electric and gas usages and make sure we are getting the best deal. We spend around £30 per week on groceries for the two of us and I am quite happy with that – I don’t think I could do much better without a substantial drop in the quality of food we eat (I’m a big foodie and love cooking so this is a no-no for me). I am a big fan of yellow stickers and I pass several supermarkets on the way home from work at prime reductions time so I call in quite frequently to keep the freezer stocked!

A big outgoing for us is entertainment and holidays – a large chunk of our wages goes on meals out, trips down the pub and travelling. I always say life is for living and you can go too extreme with money saving so I don’t mind so much – I am always on the look-out for deals and promotions and make sure that we are getting as much use out of this money as possible.

moneymagic

We bought our house in September 2018 for £210,000. We took out a mortgage for £175,000 over 35 (gulp!!:eek:) years, fixed for 5 years at 2.09%. The 35 year thing scares the cr*p out of me but I have no intention of paying a mortgage for this length of time. We decided to take it out over such a long period so that the minimum payment is low, if we ever have a reduced income/ maternity leave etc then we are not struggling with high mortgage repayments. We can repay 10% per year without penalty and it is likely we will reduce the term when we come to remortgage.

The balance today currently stands at £174,144.52

Our house didn’t need any major work, but definitely was a bit unloved when we moved in. We have ripped up all the (disgusting) floral carpets, took off some delightful woodchip wallpaper and redecorated the whole house. We will probably replace the bathroom in the next year or two, its perfectly fine for now, but not really our taste. We would love a detached house with a bigger garden and a garage, but prices for that in the area we are in (and love) would be a minimum of 350K. This would be a dream in the next 7-10 years but if it doesn’t happen, we are perfectly happy where we are. We deliberately bought in a great area and it’s a good size house so there’s no danger of outgrowing and there are lots of good schools within walking distance and excellent transport links. I think we got our house for a decent price too, I’ve seen houses on the same street sell for more over the past year or two – the only difference would be that they were freshly decorated and lots of people can’t look past the woodchip :rotfl:

moneymagic

We currently have £13,008.47 across an assortment of regular savers and high interest current accounts. We had always planned to keep at least 10K in cash before we started overpaying our mortgage but we ended up spending quite a bit on furniture, carpets etc when we were moving in. Rather than completely deplete our savings, we used 0% credit cards and our combined balances are £7109.81. So in terms of savings, I like to refer to these as net savings (i.e. savings-debt) which totals at £5898.66. I am chipping away at the credit cards and will probably chuck chunks of cash at these as regular savers mature and they will be paid off/balance transferred before the interest-free period is up.

I toyed with my first S&S ISA this year too (big year for me!:rotfl:) the value currently stands at £1200 currently all invested in VLS80. I have a DD of £75 going in presently but hoping to increase contributions over the next year.

Pensions is another thing we need to look at more in 2019. We both started very late to the game (suckers for extended periods of third level education ). I currently contribute 7% + 5% employer and OH contributes 10% + 3% employer. Our pots are quite small for our age so we will be looking at ramping up payments and looking into LISA/SIPP for retirement also.

Sorry I bombarded you all with so much information – I am currently playing with spreadsheets (I do love a spreadsheet!) and making my 2019 plans so when I have finalized these I will add another post. If anyone managed to get to the end of these ramblings, then congrats!!:beer:

bexster1975

Hello and welcome

It sounds like an interesting journey. Many congratulations on a very big year this year.

I will follow with interest

Bexster

beanielou

Happy shiny new diary

brizzlegirl

Best of luck

Nichelette

Happy new diary! I will be following your progress with interest as your situation is quite similar to ours

gallygirl

Wow, what a year for you!


You are right to see the mortgage as only one area to cover. Pensions are so tax efficient and S&S Isa's are tax free at the other end so good to cover all bases. I think I would fund all three to be honest, but concentrate on the latter two. Then all the extra moneys you get (cash back, money off vouchers etc) can go off the mortgage. You can pay 62p off the mortgage but not so feasible to pay 62p into a pension!

moneymagic

Hello all

After some number crunching and serious spreadsheeting I have come up with my 2019 targets.

Target 1
I feel this should be relatively achievable but given we don't know if/when OH job situation improves (or something goes wrong in the house, which it always does) this may be still quite ambitious. This target focusses heavily on savings at this stage, I feel I would like to be in a much more comfortable place before I start throwing lumps at the mortgage

Cash savings: Increase to 10K net, currently sitting at £5898.66 which would require savings of £4101.34.
Investments: Continue my £75 per month DD to S&S ISA
Mortgage: My spreadsheet suggests that normal payments would have me finish 2019 with a mortgage balance of £170,702.34. I'm hoping to end 2019 under 170K which is an overpayment if approx £56 per month. Pretty much just a token gesture but I will feel much more comfortable with a bigger cushion behind me.


Target 2
This is my much, much more ambitious target! Probably not going to get anywhere close to this, but why not set the bar high?

Cash savings: Increase to 12K net, requiring savings of £6101.34
Investments: Average £100 per month to S&S ISA
Mortgage: Average £100 per month overpayment which would leave a estimated 2019 ending balance of just under 169.5K




Target 1 would require savings/overpayments of £472.78 per month

Target 2 would require savings/overpayments of £708.45 per month

Thanks everyone who has read/commented so far :-)

I intend to update as frequently as possible!

MM xx

moneymagic

First banking day of the month! DD of £75 to my S&S ISA gone out, various standing orders moving my cash savings to various regular savers and mortgage payment has come out and interest has been applied.

Balance now stands at £173,865.73 (managed to pay a whole 1K off the mortgage in 4 months!!:rotfl:)

Not a whole lot I can achieve until payday near the end of the month - tend to transfer a chunk into savings on that day and any additional payments will be shaving money off day-to-day spends, so will probably be adhoc payments here and there. Grocery spends have been low this week and I have a very full freezer so will hopefully be able to add maybe 20ish to the pot at the weekend depending on the top-up shops. Mainly will just need some fresh stuff (fruit/veg/milk etc). No word on the value of the pay rise yet, have been assured it will be in effect from this month but I'm not holding out for huge sums.