Thirty something dreaming of not paying mortgage

kaycastle

Thank you south coast, you are right 
I dont think I quite realise how strange spending on holidays would seem. We are going on 2 holidays abroad this year...first time in years as wanted to treat ourselves. Haven't been too extravagant but I'm paying in parts interest free as didnt want to use savings. Those payments are 600 a month. So my outgoings feel so scary.

I started using a budgeting app though and its really helpful. I love looking at it it does make me think more. Although not quite sure how much better feb spend is going to be compared to jan. At least I wont have to move money out of savings as I'll be paid for a full working month. We shall see....

kaycastle

Its been a strange couple of months  
I've been struggling with posting as I'm not sure how I feel about using extra money to pay off the mortgage now. 
This time has made me feel like I should have been spending more of my money on doing things I enjoy and going on more adventures to different places.
It makes me feel like living in the moment is an extremely important mentality. It also makes me realise that even though I do have a lot of hobbys and things I like to do, work does fill a lot of time which I wouldn't know what to do with right now. 
I've been lucky as I can work from home and have no commuting costs so its been great on my monies.

But it does also equally make me think I hate that the mortgage is there to even make us worry. We'd need a lot less savings and income if we didn't have an almost £900 mortage every month. There would be more freedom. 

Clearly need to find a balance but not sure what that is  


Losing money on holidays:
I now have no idea whether our holiday will now be officially cancelled in a couple of weeks so likely will lose that money, its sad as we really haven't gone away for years. I hope our holiday in early September is okay. I seem to have got over the money loss  better than I thought I would but it still hurts!!
I have at least been saving lots of money as still working but no train cost and of course all food is prepared at home to help counterract the loss.

Baileys_Babe

How long do you have left on your mortgage term @kaycastle?

kaycastle

@Baileys_Babe
Just under 25 years and locked in for 5

Baileys_Babe

Is there any way your household can decrease the outgoings and up the income and use the extra to fund either the mortgage overpayments or to fund more leisure and pleasure activities?

Have you considered a lodger?

kaycastle

Hiya @Baileys_Babe
I've never considered a lodger - our home isn't huge and although I like the idea of the money, I don't think either of us would enjoy it at all. I think its a great idea for people who are up for it. 
I think a review of outgoings and also deciding how to split funds is definitely needed.

Baileys_Babe

We don't fancy having a lodger either but I thought it might be worth a mention. A couple of my friends have regular part-time lodgers often medical professionals or actors. Which seems like a good compromise.

We are currently reviewing our outgoings. When OH's work return to the office he is planning to talk to the management about increasing the hours he works from home. He normally only works 1/2 day a week from home, we would like it to be more like 1 week a month (or more). He has demonstrated he is more than capable to do his work, manage a team, negotiate with some very important organisations gaining great rewards for the company. We calculate each week in the office costs us £175+!! fewer weeks in the office more money in our account   We will just have to wait and see how accommodating they are willing to be.

South_coast

Have you thought about whether the OP's you have made so far could be used to reduce your monthly payment? This may not work for you as it might have been recalculated when you re-mortgaged, but when I contacted my bank the other week I was told that if they recalculated mine it would bring the payments down by over £100 a month because of the extra payments I've made so far and the term still remaining. Just wondering if this might be a compromise for you in terms of needing less money every month and freeing some up for fun stuff. It would mean you ate into your OP allowance faster if you decided to voluntarily keep the payments at the same level, but might be worth considering? 

kaycastle

Hiya @Baileys_Babe
Your friends are super lucky with their lodgers I feel like if it was a friend or a really interesting thing I'd be up for it but I don't think we'd get that lucky around here. 

Ooh I wish you lots of luck there - I'd be intrigued to hear how it goes with your OH's office. I'm in a similar situation - I'm sure I've saved well over £1000 from not commuting or having the occasional lunch at work. There have been emails around at work that suggest they will be much more flexile and have seen the light a bit so fingerscrossed. Its saved me 3-4 hours commuting time each day which is so lovely as well. 

@South_coast
 That sounds intruiging, I don't think its necessary for myself though. And we had our remortgage last year and I haven't done any overpayments with this one.
I've hopped on the big computer to give a bit more information - as I don't think I need to find more money its more I need to work out what I'm going to do with it and what I'm comfortable spending on more holidays/outings. We really haven't holiday-ed that much and I just don't know how much is ridiculous and how much is normal...sounds silly saying that outloud. 

So here is a quick update on my income and outgoings currently:
Current savings: £10,650
Current mortgage: £206,000
Monthly income from work: £3099
My half of bills including mortgage: £604
The bills include Gas, electricity, water, mobile phones, internet, Netflix 
Food budget: £150 a month (usually comes in just under this)
I have 3 more installments of £270 for a holiday in September that *might* get to go on. And also about a £1300 refund coming back for a holiday that was supposed to be going on next week but not now. 
I started using an app this year to budget carefully for different areas of life but the only spending I've been doing during lockdown outside of bills is food really. 
So after the bills, food and current commitments I have £2074 left each month
I currently always put away £650 in savings each month so still have £1424.87 to work out what to do with each month. I know I'm very fortunate to have a well paid job so want to do right for the future and still have fun today. 
One of the things I did with the first 2 years of mortgage is I had a standing order set up for overpaying by £300 every month. I think I need to set that up again with this one so that its just like a normal bill. That would instantly make the mortgage £159k at the end of the 5 years instead of £175k. That's down to £1124.87 each month extra to work out what to do with.

My current account has about £2000 sitting in it and I'm about to get paid again in a week, and all bills are already done so I'm doing very very good financially out of lockdown. I'm really motivated to make lunches and do bigger food shops rather than top ups once out of lockdown. 

So my to-do list/goals are:
- Set up that £300 standing order to overpay tomorrow so that I know I'm getting somewhere and I count that as a bill
- Keep a £4200 emergency fund pot. 
- Decide a holiday/outings amount pot or savings amount each year. I was thinking a pot of £5000 each year would go a very long way but is that too extravagant? What does everyone think?? I've never spent that kind of money, its exciting and scary. That would only need to be £416 a month put away which is just over half of what I do anyway from that £650. I also already techically have the first year's holiday fund in current savings...
- So that leaves £233 a month from my normal savings and still the £1124.87 extra. If I say took the overpayments from £300 to £1000 each month, that would take my mortgage down from £206k to £121k in 5 years!!! wahhhh that is exciting. Should I go for it?? 
- There is some renovation work to save for on the house and I do want to save for some patio or decking in the garden for nice bbq area but most of its just going to be hard graft weeding for a while, and I plan for OH to pay a lot of that from what they save. As I'm the higher earner I tend to pay for the holiday accomodation/package etc. and then OH pays for the spending money which still works out quite evenly in most cases as he still doesn't like any uneven-ness with things. 

Baileys_Babe

Wow, that is some commute time if you can make a saving on that it will have so many benefits.

Getting the mortgage down to £121k in 5 years would be awesome and I can see the appeal.  Do you have an emergency fund? Is it large enough? How many months would it cover you for? 

My parents holiday budget is significantly larger and we could only dream of having anything like yours. Your budget looks like it is not unrealistic. 

Have you made a wish list of places you would both like to visit? What about day trips? Theatre shows? Exhibitions?