Babystep 6

longway2go

Hi Babystepper, 
I am with Tsb and it's very easy to overpay, you can call to make one off payments or change your monthly payment which you can easily reduce the same way. The other option you have is to make a payment from your bank the details are:
Ref Mortgage Account number (16 digits, will be on your letters)
Sort code - 302886
Ac no 00000000
I would just make a small payment at first to test it, the reduction generally shows the next working day.
You can sign up to online banking and get an app. The app does not show transactions but you can see balance instantly. 
Hope that helps

savingholmes

Hi Babystepper if you are still following DR - he recommends a 3-6 month emergency fund before tackling the mortgage. Maybe you could set up a token OP for now so you still feel you are making mortgage progress while building the EF up. Don't forget pension either - he recommends saving 15%. Happy Easter

PositiveBalance

Hi Babystepper,

Given everything that is going on in the world sorting out your emergency fund does seem the best way forward for the moment. While you are working on that you can be figuring out how to make the OPs to the mortgage and what is going on with your retirement situation again?

BabyStepper

Good morning everyone 

longway2go thanks for the info on making overpayments, that's helpful. Sounds really easy and that's what I'll need. 

inod unfortunately our mortgage is fixed rate so no reduction for me, boo! Good idea for others though. 

I found this on my dfw diary, a list of goals for once the debt was gone. It looks like a plan from a different time, I wrote it in September. 

1. Save an emergency fund.
2. Save 2 months wages in my business account. (for stability and to make managing the cash every month easier, I can pay myself on the same day OH gets paid and also cover any months when I take A/L.)
3. Save for a newer car before our starts costing a fortune. (could happen any minute)
4. Save for a new kitchen. (becoming slightly urgent)
5. Have a beach holiday. (it's been AGES! but this feels like a luxury)
6. Contribute to my pension (ooh, totally urgent, maybe the minute the debt is paid off)
7. Increase the food budget to make things more interesting. Currently £200 per month, is £250 too much for 2 people?
8. Increase our monthly spends to...dunno. What do people with no debt spend on fun/clothes/ haircuts /things like that?

This was back when I had £1,400 to use every month, I don't have that now. As things are, numbers 2, 4, 5, 7 and 8 are on hold for the foreseeable future and we're living on the minimum we can. I haven't made a pension payment yet but will get that set up for the end of this month. Less of a goal and more of a 'to do list' task, once it's done, that's it.  

Not sure why I didn't have mortgage overpayment on that list when it was obviously on my mind. Also not sure why I wrote the mortgage is £130k, it's closer to £140k at £139,756.43. Wishful thinking, perhaps? I have online access to my mortgage account which is handy, so I can check it/ obsess over it/ plot and scheme how to pay it off. My long term goal is to reduce the mortgage term by 10 years and overpay the mortgage as well as saving an emergency fund, we're going to do both at once. As always, it's a hybrid Dave vs Martin plan. I need Dave for motivation and Martin is good for figuring out how to pay the least for things and get the best deals. Progress in both areas will be slower but I'm ok with that. 

But back to things that need addressing now, and getting cash together to keep the car on the road. Hope everyone is doing well today.  

 

savingholmes

It's good to review your goals. I think most of us have thrown our goals up in the air and seen where they landed rather than following through as planned. I need to revisit my goals too - I am focusing on weight reduction and food security currently....

enthusiasticsaver

Hi Babystepper
I have just followed you over from the DFW diaries and great news you will be tackling your mortgage too.  We overpaid at various points over the term of our mortgage and did it in two different ways depending on what else we had going on.  An extra standing order to the mortgage account is a suggestion.  We had a limit of 10% of the balance which we could overpay  so we set up the standing order for that for a few years.  The other way was to do a regular saver and then repay it to the mortgage when it matured.  That was because our mortgage provider wanted to keep reducing our monthly payment every time we overpaid whereas we wanted to reduce the term and it involved a restructuring.  I think most mortgage providers have a better system now. 

regularsaver

Hello babystepper, first of all congrats on making the decision to start your MFW journey. As Bexster1975 says above a substantial EF is a good idea. I absolutely understand you want to begin paying off money to your mortgage but have you considered building up your emergency fund first? I am still personally building mine, but what I can tell you is having a steadily growing decent sum of money in the EF has given my peace of mind and stopped me worrying quite so much that should something happen I have money behind me to cover it. 

Good luck with your car and I hope it gets through its test unscathed. Regarding making over payments I would just ring your lender, thats what I did and just discussed all my questions with them, wrote down all the answers so I had them. 

I don't blame you limiting your exposure to the news, I have too been doing this as it does affect my mood also. Next one I shall tune in for is Sunday and Boris's "big announcement"

Best of luck with everything.  

savingholmes

Good luck on your journey. Hope you are okay. 

BabyStepper

I seem to have been awol from my diary for a few weeks. The reason for that is I haven't a clue what the best move is financially just now, with everything that's going on, and I've just been doing nothing. 

I got the car tax, insurance etc sorted out and paid for with cash. Nowhere is open for MOTs and that was automatically postponed, basically kicked down the road until November. It suits me not to have all those outlays at the same time and gave me time to save a car fund of £500.

The EF now stands at £2,100 as any extra cash has just been stockpiled. Bizarrely, my invoices for the small amount of work I have left are being paid within a week rather than me waiting a month and more for the money. I'm not complaining, but this EF figure includes what would have been my end of June wage. The EF is helping me feel safer and more relaxed - hoping to get it up around £3k some time in July. 

I had a chat with OH about how to progress. He's onboard with overpaying the mortgage, on the understanding that when you make overpayments you can then reduce the monthly payment if need be. I'm still anticipating one or both if us possibly losing our jobs, unlikely but I'd prefer to be as ready as I can be. Maybe I'll get started on that this week and make a tiny overpayment to see what happens.  

Nothing much else to report. It's a very quiet life still, just glad my family and friends are all staying well and hanging in there. Things can only get better, right? 

DancingInTheRain

Good to see you posting again & I'm pleased your invoices have been paid more quickly, takes a bit of pressure off you.
I'm a bit like you in that I've been building savings rather than overpaying (although in my instance this is CC debt rather than mortgage) while life is still uncertain.
Stay safe x