Marginal Gains

After a lot of lurking I thought I should start my own diary. I am about to start a new job with 20% pay rise and a 5 year contract. So this diary is about how I can improve our financial situation over this time - so if my contract isn’t renewed I can afford to take a lower paying (and less stressful job). I have a lovely DH, one DS and one DD. Our money is fully merged and DH just leaves me to it.

I was up for redundancy about 3 years ago so made quite a few changes to our finances then. Most of these were ‘marginal gains’ and cutting out ‘wants’ but they added up. We now save about £750 in cash a month and aim to overpay £500 too (but don’t always manage to do this). One not so marginal gain was my daughter turning 3 and getting her free hours which saves us about £500/month.

Three years ago we were just breaking even each month so it’s been a big change and really don’t enjoy our life much less; although sometimes cutting out expensive excursions and holidays for the children is tough. If we can find a suitable state school for DS then I am tempted to blow some of the education fund on family holidays; while the kids are young enough to enjoy it.

Pre-kids we always OP’d and saved but this fell by the wayside once we had to juggle the mortgage with kids (especially child-care costs) and two full-time demanding jobs. It’s still a juggling act between time and money.

We are saving money in cash, as our eldest has special needs and we think it likely we will need to pay for his secondary education. So this education pot is our top priority.

We just managed to get our mortgage sub 200K (we started at 250K in May 2015) and have overpaid just over £17000 to date. We are due to remortgage next May so I will be looking for a good deal in the autumn.

We both have the same DB pension scheme which we currently can access from 55. However the scheme is designed for retirement at state retirement age and accessing it early seriously decreases the payable pension.

We started working relatively late (we both were students until age 27) so we also now contribute additional AVCs 12% this goes into an ethical investment fund (fund fees paid by employer). With our compulsory and employers contributions this brings our total pension contributions to 40.3%. I plan to up our AVCs to around 15% once our pension provider decides the compulsory contribution to the DB will be for 2020. I hope we can retire or even better go part-time aged 60 but this is still along way off.

We plan to gift our pension lump sums to our children, so our AVCs are also long-term saving for them. We were very fortunate to be gifted/inherited money during our 20’s and early 30’s, which we used for our house deposit so it’s very important for us to pay this forward.

My 5-year goals are...

To reduce the mortgage to ~£130000.

Maintain an EF £50,000 (this is our quitting work/redundancy fund and is essential for my MH). Before starting on our career paths we were advised by a older colleague to save this fund up. We will never have job security and our roles are extremely specialised - 5 years is the maximum length of contract I will ever be awarded. DH has a more secure role but only as long as he maintains his productivity.

Increase our combined AVC pot to £100,000.

Find a secondary school that meets DS needs and pay for it if needed.

Enjoy family life.

Get my work contract renewed.

Here I go.

Current mortgage 199,700
EF 50,000 (running away from work fund)
Education savings (17K in our name 13K in sons)
AVC pots (~22k combined)
12 years of DB pension years


  • Hello and good luck - that is a very healthy EF - you have far more will power than me! Good luck with the new job too
    MFW #69 Mortgage remaining Jan 2021 £221,644; Jan OP £1000;
  • longway2go
    longway2go Posts: 1,006
    First Post Name Dropper First Anniversary
    Hi, just wanted to pop on and say good luck ��
    Mortgage Aug 2019 161,000 :eek::eek::eek:Nov 2019 156,500:T Jan 2020 153,122:T, Apr 2020 149,500, Apr2021 139, 675, Oct 2021 136,823, Dec 2021 136,120🙂EF 0/12,000 (0%)😕 (5062.44 was ERC), Jan 2023 128,650. Our Mortgage is never going to be as high as it is today. :jOnwards and downwards to a better life for our family. :jJust keep swimming
  • Thank you for the good wishes. I have found everyone’s diaries so useful and inspiring. I hope my one will keep us on track. Working at home so best crack on.
  • savingholmes
    savingholmes Posts: 26,851
    Name Dropper First Anniversary Photogenic First Post
    Good luck on your journey. You sound like you are really motivated and on track.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26% (lower post move compensated by EF)
    2) Mortgage neutral by June 2030 AVC £7,613/£127,466 AVC target 5.97%
    3) FI Age 60 annual income target £12,500/30,000 41.66%
    Achievements: CC free since April 22. 1 year EF from Jan 24 & dedicated pot for home improvements
  • On Tuesday I processed and froze a batch of free pears from our lovely neighbor and did pre-school/school run by foot and bus, which is more cost effective.

    Yesterday was quite spendy, as I was rushing around town attending meetings and just grabbed food as I needed it. Whoops. Must try harder.

    Today I picked up free juice at train station and free coffee at wa@trose. Also bought basics bubble bath to use as shower gel and hand soap as it’s 1/3 the price.

    On the financial front had to put DH extra pension contributions up to 18%, as he has been earning too much from his second job, is due a pay rise and thus is at risk of going over the child benefit threshold. I will have to keep a close eye on this, as he detests having to do a self-assessment and any other form of administration. He actually couldn’t tell me his salary for his main job yesterday! Not even a rough idea.

    It’s much better all round if his extra income goes to boost his pension but annoying extra contributions have to come from first job so it’s quite a juggling act to make sure it’s properly accounted, especially as he has absolutely no idea what’s going on. Aware we are very lucky to have this “problem”.

    Retirement has been at the forefront of my mind this week as a senior colleague died this week having not yet retired. It makes me so aware if we don’t put extra into our pensions, this might well happen to us.

    Hopefully I will be still on track to top up education fund for DS at month end but might not be able to make an OP.
  • Busy_Mee1
    Busy_Mee1 Posts: 1,015 Forumite
    Hello and welcome. Another one here who has an OH who takes no interest in the finance. It works quite well actually..I get to do all sorts...apply for accounts in his name to get rewards and switch's etc :rotfl:
    I keep threatening to run off with all the money but he knows after 36 years I can't be bothered with training a new OH up :rotfl: :rotfl:
  • Thanks BusyMee. Your diary has really inspired me and I have copied lots of your ideas. Bank switches have been particularly lucrative. Thank you very much. Hope you have a great day.

  • Went for a cheap meal with colleagues then to birthday party on Friday evening ; only spent £13 but felt very tired on Saturday as I am not used to late nights.

    We spent Saturday preparing for a family party; we did Sunday lunch for 16 people eek. Saturday was a huge chores fest; I cleaned the oven, which was long over-due, we tided the garden and swept patio and mowed the lawns. DH did the hedges, I changed all the beds, washed and dried 4 lots of washing. Including one load of “dry clean only’ stuff for work which I washed on delicate cycle with some wool washing soap. It worked really well.

    I shop online for food to save time and avoid impulse purchases. The supermarket sent me a £8 discount voucher (probably to tempt me to renew my delivery pass) so I offset some of the extra costs for the party with that but it’s still a pricey week grocery wise. Especially as I didn’t order everything we needed. (I
    had planned to update the order on Friday but got home after the cut-off time), so DH had to do a top up shop. He bought quite a bit of random stuff. So I will need to be creative to use it all up.

    Also on Saturday, DH took a bag of stuff to charity shop. He took the kids with him and they came back with a bag of new toys! They spent DS Thooth fairy cash, DD was given a sub by DH. So much for decluttering.

    Sunday I cleaned the bathroom; then made roast chicken with the usual veg and apple and pear crumble (with the fruits I have been saving from our neighbors) for the family. Everyone brought something so now we have a lovely bunch of flowers, lots of yummy crisps and a restocked beer and wine store.

    We ate all the puds but there was lots of meat and veg left over. While everyone was chatting in the garden, I made stock from the chicken bones etc. Turned a bit into spicy chicken noodle soup for tea, the rest I blended with the left over boiled veg to make soup. It’s not the best but will do for week day lunches when I am working at home.

    Not much going on money wise; looked into selling a few books on MusicMagiePie but the rate they offered was really low.

    DH found a bag of DS old clothes in loft. DD and I sorted through them on Saturday, she is now fully kitted out for winter. Luckily she loves wearing her brothers old clothes.

    Free coffee this morning, but bought supermarket sandwich for lunch. No other spends.
  • Wow, that sounds like a mammoth effort all round! Well done :)
    Choose kind:)
  • It sounds like you're off to a fantastic start.

    I'm also on fix term contracts so like you we have a good emergency fund for the unexpected. I didn't start paying into my pension until I was 27 but so far I've not really looked into AVCs but it's on my radar for once my DD qualifies for her free 30hrs at nursery and we have more money to play with.

    I'll be reading your diary with interest. Good luck for your journey.
    Mortgage-free wannabe #66 £105/4000
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