the long path to mortgage free freedom

moneysavingfamilycomp · 27 June 2019 at 10:08AM

Hello everyone
I've been an mse'r for many years now and it's helped get us through some sticky situations. at the moment we are in a reasonably good place in as much as we dont have debt, although we dont have savings either. so the new plan is to have a plan

I'm hoping writing it down and having peoples suggestions will keep me motivated

so here goes:

step 1 : emergency fund we are starting this at £500 then increasing up to £1,000
step 2 : pay off mortgage as soon as possible currently 21y 3mnth

step 2b: build up emergency fund to cover 6 mnths essential expenses. at the moment this = £6633
we are going to run 2 and 2b consecutively maybe not the best way to do it but oh's job is pretty secure so we have decided we have the luxury of doing this.

so onwards and upwards as they say i'll post a more detailed breakdown soon.:j

LadyGnome · 27 June 2019 at 10:18AM

Welcome and best of luck on your MFW journey.

There is no one right way to do things. So if you want to run 2 and 2b concurrently (i wasn’t sure if you meant this rather than consecutively- spot the lawyer in the room

) then go for it. Psychologically even small OP whilst filling other pots helps you feel like you are making progress.

moneysavingfamilycomp · 27 June 2019 at 11:08AM

i've worked out our new budget it took about 4 hours and i now have detailed printouts and spreadsheets (yes thats the kind of person i am lol)
i'm going to follow the dave ramsey approach of cash envelopes but tweek it slightly so the larger budget amounts are put into accounts ie: christmas, holiday etc.
as i've been following mse for a long time I know theres not much we can change in the budget to gain more money, we are already on the cheapest provider for energy ( cheap energy club member)and I use comparison sites and cashback sites to get the best deals for insurances etc. I have also just rang virgin as we were out of contract and got them to reduce us back to our original new customer deal for another year.
there are some things we might be able to change
1) food bill. last months food bill was £200 for 2 adults and 2 kids and 1 dog I need to try and half this.
2) water. we have a meter and 2 water butts for the garden so hopefully using less will help.
3) energy. we are on the cheapest deal so using less here also.
4) selling what we can
if anyone can point me in the right direction of some challenges that might help I would appreciate it.

the second step is to remortgage however this is going to take a bit of research. currently we are nearly 4 years in to a 5yr fix at 3.15% it was a good deal for our circumstances at the time but we can now get something much cheaper. however we have early repayment charges at 1% of the balance per year and a new mortgage will have set up fees so some maths is needed to work out if we should remortgage this oct (when the early repayment drops to 1%) or wait till next oct when we will be free to leave.
i'm motivated at the moment however its going to be a long journey.

moneysavingfamilycomp · 27 June 2019 at 11:12AM

LadyGnome wrote: »

Welcome and best of luck on your MFW journey.

There is no one right way to do things. So if you want to run 2 and 2b concurrently (i wasn’t sure if you meant this rather than consecutively- spot the lawyer in the room ) then go for it. Psychologically even small OP whilst filling other pots helps you feel like you are making progress.

Thank you ladygnome yes thats what I meant lol

. I'm very impatient so I think the achievement of seeing the mortgage drop will keep me motivated. although i'm aware we need a safety net.

[Deleted User] · 27 June 2019 at 6:53PM

Good luck! I'll be following with interest. Worth shopping around for a good remortgage deal (whether you wait till end of current deal or not. ) You can significantly cut your monthly payments that way and either overpay or alter the length of your mortgage. Wish you well!

Bored · 27 June 2019 at 8:09PM

Good luck on your journey! I also want to save an emergency fund and overpay the mortgage. At the moment I am focusing 100% on the emergency fund but I am very tempted to start with a few small overpayments alongside my savings.

moneysavingfamilycomp · 27 June 2019 at 9:29PM

regarding re mortgage i've had a look at the mortgage calculators and best buys (obviously i'll have to re do it in oct)
at the moment we seem to have 2 options to weigh up
1) 1.49% with £999 fee's which will need to be added in + early re payment charge of £920
2) 1.98% with no fee's apart from £920 early repay.
I can't decide if when we do it it's worth paying fee's which will need to be added to the mortgage in order to get the cheaper rate. at the moment our rate is 3.15% !! so both ways will save us the cost of the early repay charge + more over the first year alone.

i'm not officially starting my budget till monday 1st July as thats when most of my direct debits come out. at that point anything left in the account above the amount of the couple of DD that come out the following week will be taken out so that I can start from a zero point for the month. I'm hoping I can pay off the last £25 that is on the CC over the weekend (i'm waiting for a couple of people to pay me what they owe) then I can close it and we will have zero debt. it was opened as a 0% balance transfer to clear debt. I have another card with no balance on which I will keep open as an emergency back up until we build up the emergency fund. i'll put a little update in the next post of what i've done today.

moneysavingfamilycomp · 27 June 2019 at 9:40PM

thursday 27th
ways I've cut expenses today

1) walk the school run to save on diesel
2) washing dried on line to save using dryer
3) dinner made from freezer stock
4) yellow sticker items bought to go in freezer to stretch food budget
5) just about to check surveys on swagbucks
6) 1p, 2p and 5p out of purse into relevant saving jars.

moneysavingfamilycomp · 28 June 2019 at 3:10PM

friday 28th

1) walked the school run i'm determined this will become the norm as it will save about £20 a month in diesel :eek:
2) all washing dry on line again so no dryer
3) a couple of payments came in so paid off CC

:j WE ARE OFFICIALLY DEBT FREE :j

4) made a couple of small sales from our home business so that will go straight to the emergency fund i'll update it next week.
5) curry in the slow cooker for dinner. had to buy the sauce but had chicken and naan in freezer and rice in cupboard.
6) OH has managed to find an offer for a family cinema ticket for £10 so we are taking the 2 kids to see toy story 4 tonight. i've bought 3 bags of sweets for £1 OH and I will share lol so will work out as a nice cheap treat night.
7) reduced arranged overdraft on my account from £800 to £400. I never use it its only there to cover DD in case of a complete disaster so it will help reduce our available credit.

to do

1) submit meter readings tomorrow so they dont estimate the bill. it has to be done no more than 3 days before the bill date so hope i've timed it right.
2) ring CC and cancel to reduce our available credit more before we look into re mortgage.