Time to start my race to zero

remote_control

Thanks for your reply. That all makes sense re the cash. We have very minimal cash savings at the moment and our money on 0% is from home improvements. I think I will continue to pay it off and then once we remortgage I will build it back up again similar to what you've been doing. I've been thinking of it for a while but I see a lot less stoozing than when I first joined the boards.

Probably for her second birthday I would start thinking of a balance bike, scooter etc. We have bought some of these from new and got relatives to chip in as a joint present. Also if there are any items that will last their childhood years e.g. garden games, sports equipment, play houses/tents etc. Mine are 9 and 7 now and still use these type of things they got as toddlers. Similarly some toys like wooden railway, duplo which are quite expensive and last their whole childhood.
I am also stingy and ask for consumables like bibs, tableware, bags etc.
Inevitably though they get bought really nice versions of these presents and often things that are much more 'girly' than I would buy them so they tend to be happy. 
I just find it hard (and so do they) to think of things they want for birthdays and Christmas. My mean method (but hopefully acceptable on these forums) means that we need to buy them very little throughout the year. But as I said before they do a lot of clubs and we like to go on holiday so they still cost us a lot of money!

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95

I really felt like I'd only been away from updating this for a few months, but realised on logging back in how long it had been.  I now have a proper little toddler, and a very happy one despite being unable to talk, so reading back on my previous posts was quite amusing!

Things have continued to be really unpredictable for us - unfortunately my daughter's health has continued to be problematic, although nothing panic-inducing, just upsetting in the moment and time consuming to get resolved.  And between my wife and I, we've been trying to focus on our jobs a little more after so much disruption.

Thankfully our incomes have more or less held firm, and we've been able to make some overpayments and then remortgage with a 5% fix.

My dilemma now is really on the cash front - generally we've held a solid buffer, safe in the knowledge that we were earning as much in interest as we were paying out on the mortgage - now of course that's quite different.  Even if I can get 5% in a savings account, I'll have to pay tax on it, meaning that Premium Bonds are the best option but at ~4% they're still being outpaced by the mortgage.  So we may end up making some more overpayments this year, although we're of course limited to 10% of the borrowing.  At the end of the day even I think even if keeping an extra £10k on hand gives me some peace of mind, at a 1% differential between PBs and the mortgage that's only £100 per year - which is good value for peace of mind.

I've been on a bit of a spending cut campaign this year, although we were fairly frugal to start with so there wasn't tonnes to cut.  In lieu of presents we wouldn't use, we asked for an air fryer and have cut down massively on our use of the oven, plus I've got rid of a couple of old electrical appliances that I liked but were just too power hungry to justify.  There are a couple of new things I'd like, particularly a phone, but I'm just delaying on those for as long as I can bear it since it feels like the features that I'd like (wireless charging for one) just pushes me into the "premium" market and puts me off buying.

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95
Sep 23	254		69	46		277		372		95

This was one of those fun months where market wobbles were enough to mean that the salaries coming in made no difference to the overall position.

On the plus side, thanks to various regular savings accounts and the like I'm now expecting to earn almost 7% pre-tax on my savings, and around 5% after tax (some premium bonds in the mix to mitigate the tax), which reduces the pressure to make further overpayments.

My current feeling is that I'll hold off, since I can always make a lump overpayment later in the year if I ever want to.  Right now, it would just take away flexibility for a very small difference in interest payments, so I'm happy to wait.  Nonetheless, it is horrible seeing how little an impact the payments make on the mortgage balance!

I think I've done as much as I can on the spending cuts for now, so I'm going to take a bit of a breather on that for now.  Overall, I think I'm probably at a point where I've optimised as much as possible, and I'm a little more wary than I've been in the past about going too overboard on trying to continually improve things.  I know from past experience it can start to get a bit frustrating when you're debating cutting £2 per month out of a budget for something!

The other, more looming question, is whether we consider selling up at some point and trying to cut the mortgage / increase the house size by going somewhere cheaper, but I think that is at least a couple of years away.

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95
Sep 23	254		69	46		277		372		95
Oct 24	328		92	46		374		368		-6

I've been away for longer than I'd thought again! Things have been very jumpy with work, and welcomed a second child to the family in May - between the pregnancy and re-adapting to life I've had very little free time.

It was quite a shock though to run the numbers today and see that we could technically pay off the mortgage.  When I started this thread planning my "race to zero" I expected it to take a lot longer, because the mortgage has always felt like such an insurmountable number.

If it wasn't obvious, I won't actually be doing it though.  I value those ISA allowances and potential growth too highly, but I think I will now be pivoting more towards decreasing the balance.  That's for a couple of reasons - firstly to give us the best chance of securing the best deal in a couple of years when our current mortgage expires (up until now we've only been able to get offers from the biggest providers due to the risk profile) and secondly to hedge against the risk of our income dropping and not being able to remortgage due to affordability.

I'm also thinking that interest rates on my savings accounts will drop further, and then the benefit of moving cash into the mortgage becomes more attractive.  Thankfully I've been able to push all the credit out to 2026, so nothing to worry about on that front for a while.

It feels like we will be staying in this area now, with the children settled and not having the mental energy to consider uprooting.  On top of that, we have no credible idea of where we would go, considering proximity to family and friends who are such a help to us.

Spending is still under reasonable control, though we are considering going on holiday this year - crazy thought!

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95
Sep 23	254		69	46		277		372		95
Oct 24	328		92	46		374		368		-6
Feb 25	390		100	62		428		357		-71

So after all this time, I have finally started to make overpayments on the mortgage.  I made one lump payment last month, and am allowed to pay off around £25k more in the next few months.

I managed to take on a bit more 0% credit card debt, so that has given me a decent cash float to make that overpayment without having to disturb any high rate or fixed term savings.

Current priorities then are

1) Completely fill both of our ISAs before April (around £3k)
2) Pay £25k into the mortgage before June
3) Plan my ISA contributions for the next tax year (I think I'll aim to max them out, but gradually)
4) Max out the mortgage overpayment for the next payment year at some point
5) Put maybe £3k each into taxable investment accounts
6) Decide which order to do 3-5 in

I am looking forward to simplifying my savings arrangements - I've benefited hugely from all of the regular savers etc, but the hassle involved in managing them all is getting really old so it will be nice shuffling all of that towards the mortgage instead.

One funny thing is that I've put a decent chunk of the cash into Premium Bonds, which are paying roughly 3.5% depending on your perspective on probability.  Clearly, that's less than 5% on the mortgage.  Until now I'd justified hanging onto the cash to give us flexibility, but now that I'm planning to use some of it on the mortgage that illogical part of my brain is saying "but you might win £1m".

It's fine, I will have no problem swapping them out when the time is right, but it does make me laugh when I can see my own brain starting to make those weird leaps to justify bad decisions.

The main thing though is that the overall strategy is still working out, and hopefully in a few months it will look and feel a bit cleaner once I've paid down the mortgage a bit more.

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95
Sep 23	254		69	46		277		372		95
Oct 24	328		92	46		374		368		-6
Feb 25	390		100	62		428		357		-71
Apr 25	365		101	75		391		340		-51

Managed to squeeze another £5k to put into the mortgage, leaving me another £7k to find in the coming weeks.

When the new tax year ticks over, I will close a few savings accounts to free up £4k, and then I have a few maturing in May that should do the trick if I haven't found another £3k by then.

In terms of my priorities:

1) Completely fill both of our ISAs before April (around £3k) - DONE
2) Pay £25k £7k into the mortgage before June - PARTIAL
3) Plan my ISA contributions for the next tax year - TBC
4) Max out the mortgage overpayment for the next payment year at some point - TBC
5) Put maybe £3k each into taxable investment accounts - TBC
6) Decide which order to do 3-5 in - TBC

I have already cashed in a few savings accounts where the rates weren't worthwhile, still have another 10 or so to shut down over the coming months.  And I think I've maxed out on 0% credit now.  I'm not planning to take out any more since I'll need to pay it down before the mortgage comes up for renegotiation in 2026.

The elephant in the room is that investments have taken a big hit over the last month, so I'm overall in a worse position than a couple of months ago, but the mortgage is still dropping and the investments are very much a long term proposition.  It's not a big deal, but it does illustrate the potential downsides of taking the approach that I am.

OhIJustLostMyShoe

Tried to sell a few bits this month to gather some extra cash, but mostly a fail.  I think I've made a total of £30 so far

Most of it will likely end up being given away or donated to charity shops because we're seeing more scammers than anything else - already got rid of a couple of big pieces of furniture via free giveaway groups. 

I suppose a positive way of looking at it is that I've tended to buy cheaper alternatives and hang onto things for as long as I can, so I can't complain about struggling to generate cash when I'm finally ready to let go.

I've cashed in the last of the savings accounts that I'm able to now, so just £3k left to get into the mortgage.

Had a day trip out with my eldest, she wanted to go to the shops so we wandered around a few supermarkets and bought one thing from each.  Total spend of about £6 and she's really happy, so chalk that up as a success!

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95
Sep 23	254		69	46		277		372		95
Oct 24	328		92	46		374		368		-6
Feb 25	390		100	62		428		357		-71
Apr 25	365		101	75		391		340		-51
Jun 25	382		86	72		396		332		-64

Finally made the last mortgage payment of this overpayment year.  It has been a real squeeze to do it, which is weird because I've felt like I need to watch every penny - but entirely created by me trying to accelerate the process.  For the ISA, I decided to start with a lump sum of £5k when the markets had dropped a bit and then drip feed the rest through the rest of the tax year.

Although the markets have recovered, my investments haven't - and I think that's due to the dollar dropping.  £1 was worth about $1.23 in Feb and now $1.35, so that scrubs almost 10% off the value in GBP.

It's certainly something to think about if you were relying entirely on investments to cover the mortgage - you've not just got market swings to consider but also currency fluctuations.

Remaining goals then are to max out the mortgage overpayment for the next payment year.  For this one I'll have to wait and see what figure comes back from the lender, I'm honestly not sure I'll achieve it.  But I'm also conscious that it's up for renewal next summer so in a sense it doesn't matter too much. I can repay as much as I like at that point.  Hopefully some good deals available by the time it comes around!

OhIJustLostMyShoe

Month	Investments	Cash	Credit		Net assets	Mortgage	Overall debt	
Mar 20	90		43	27		106		414		308
Apr 20	92		44	36		100		414		314
May 20	99		48	36		111		415		304
Jun 20	107		64	45		126		416		290
Apr 21	172		62	53		182		408		226
May 21	180		56	46		190		408		218
Jun 21	171		65	54		182		407		225
Aug 23	256		65	43		278		373		95
Sep 23	254		69	46		277		372		95
Oct 24	328		92	46		374		368		-6
Feb 25	390		100	62		428		357		-71
Apr 25	365		101	75		391		340		-51
Jun 25	382		86	72		396		332		-64
Aug 25	411		90	71		430		331		-99

Finally the investments have recovered back to February levels.  I know these things are fleeting and it could easily drop far worse and for far longer, but still... it is nice to see.

I've been presented with the option to pay another 10% off the mortgage for the new year, and the current plan is to do exactly that.

I am expecting to free up about £6-7k from maturing savings accounts by October, and I have arranged to cash in another £5k this month.

I think I just need to bite the bullet and do it faster.  Technically I could suck £20k out today from savings and still have enough to pay off the credit when it comes due next year.  Not only that, some of that debt is more than a year away from needing to be paid and I can probably either stretch it out a bit longer anyway.

So what's stopping me from just getting on with it right now?  I think it's more psychology than anything else.  After all, what happens if I cash in the Premium Bond that might win on September's draw!

There's no point paying 5% on the mortgage in the (unlikely) hope I can achieve the 3.6% advertised for Premium Bonds, but it still feels premature to go all-in on the mortgage and the beginning of the overpayment year.

Still, it's somehow more comfortable taking my time and pacing things a bit.  I'll have to stew on that over the next couple of weeks.

Summer holidays are going to be an interesting one.  We've both had to take a chunk of time off work, since we found some clubs but they are only for short periods.  I'm looking at that from the positive side though, that we are getting to spend some quality time together and have some fun.

As much as I want to pay off the mortgage, it's not worth it if we can't enjoy ourselves along the way!