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Aiming for Mortgage Free!



  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    One strategy I used was if a category is too big split it up. 

    Some are obviously single payments so not possible but others tend to include multiple categories so can be split, look for needs and wants necessarily and discretionary.

    Food can be low budget needs and want/discretionary higher, as a choice for nice meals.

    One to watch is regular/habitual spending.
    I have a takeaway story, weekly habit fixed extra holiday paid for. 

  • rugbymadfamily
    Thanks for all the tips and advise. Lots to think about over the weekend!

    Did some more batch cooking from some yellow ticket meat so thats money spent now, but less to spend in next few weeks. The homemade protein energy balls have gone down a treat and much tastier than shop bought! 

    Am finalising the decorating of our dining room this weekend (just need 2 new photo frames and some fabric so that I can make final few bits of soft furnishings, but have my go-to shops for those so relatively low cost and I get enjoyment from making my own - win-win!). Then lots of rugby to watch :-) 
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
  • Coffeekup
    Coffeekup Posts: 661 Forumite
    First Anniversary First Post Name Dropper Combo Breaker
    edited 12 September 2020 at 8:15AM
    I wish you well with this, posting here you must have money budgeting sense, and want to hone your skills. Some good advice posted on here as usual. For me personally with my money learning lesson's over the years, (redundancies, stupid budget planning, wasting money on non essential stuff and the unforseen) looking at £4500 out going a month I would be more cautious with what's left. 
    You guys have a great income along with an eye watering mortgage, with money outgoings in pots like fun money and entertainment most could only dream of. If not budgeted for correctly you'll only look back and wonder what it's been spent on and maybe wish you had more to show for it. Here is where I would trim some fat and speed up goals.

    Opening up account pots I.e. one for the car out goings where u allocate say £240 a month to pay for everything to do with the car. fuel, insurance, mot, breakdowns, cover, wear and tear repairs and taxes, which after number of years will have say £6000 in it, to buy a new car depending on how much your current car owes you over that time. Effectively living within your means and less likely needed another car loan again. Avoiding paying more interest where possible is key.
    Adjusting amounts to fun/holiday and entertainment, adding more to holiday could be used as spending money.
    Fun and essential money I would again put in an account to use and if there is any left in it after 4 months use it for home improvements, or add to savings or make an overpayment.

    With what's going on currently having £1300 spare a month I would put this straight to savings. If your both unable to work you'd have a cushion or longer if you're partner was only working. In year 3 I would adjust the payments to say 60/40 split to savings/overpayments on the loan. Year 4 and 5 I would adjust the split again for savings/mortgage overpayments ideally falling into a new LTV bracket with the remortgage. 3 safe years and you've set yourselves a up for a more comfortable, less worrying financial future who is less likely to need to the use of another line of credit.

    If I was looking to cut back I would look at pet insurance, food and sky package and gym.

    Maybe help your friends save a bit of cash by not going out so much and having them round for dinner, and they bring the booze? Saving you guys cash by not going out too. You have a nice house with a nice garden have people round to enjoy it.
  • rugbymadfamily
     Thanks for stopping by. Its strange but until I came on here, the mortgage didn't seem that high, but that's London living for you I guess. Definitely like the idea of a car "pot", we normally just pay the tax and insurance in the month they are due but that then means that particular month is pretty tight. Would make more sense to build up a fund as we go and then have money for repairs etc if needed as well. Will get that into the budget for this month. I just wish "traditional" banks had things like Monzo etc where you can have multiple "pots" for one current account. It's definitely harder to track when its all in one account, but thats where I need to use my spreadsheets better!

    The spare is currently going straight to savings (minimal savings currently, as in last few years have paid £50k for house (deposit + stamp duty + legal fees), paid for wedding and honeymoon (albeit honeymoon got cancelled - still awaiting a refund!). Now trying to build the emergency fund up to £7k and then hit the OPs harder (probably try save half and OP half is my current thought). Half saved will be for decorating the house / holidays / etc.

    Main cut back aim at the moment is food as we are well overspending here, was up at £500 in lockdown but this month should be coming in around £300 and that includes a £30 spend this week on topping up cleaning supplies, which doesn't happen often. Pre lockdown it was under £250, so aiming for that again. Pet amount includes insurance, monthly vet payments (for monthly flea and worming / twice annual check ups / jabs) as well as food / litter etc....we have no children currently so the kittens are definitely spoilt with the best food etc, will see if we can wean them down to the next level, that's something I did with my own shopping, moving everything down one brand. Except nutella. Nothing tastes like real nutella! Gym is something we cut back about a year ago (we were at David Lloyd and it was nearly £200 per month, now at one of the 24 hour chains so much cheaper and we do both use it 2-4 times a week so get good value out of it). TV package includes internet and sports channels - thats a non-negotiable for my husband given the amount of sport we watch....but I was able to reduce the number of channels recently which did cut it back a bit! Every little helps. The other area has to be the entertainment. Thats the next focus point in coming months.
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
  • QueenJess
    QueenJess Posts: 3,723 Forumite
    First Anniversary First Post Name Dropper
    Sounds like you've got it all under control.  I do my monthly budget each year (and then tweak in the year if needed) based on categories like Car insurance/tax, Entertainment, Council tax etc.  I budget for everything, including holidays and all the once a year costs in there and then divide the total by 12.  I then just track it all on a spreadsheet in the year to see what I have in each of the virtual pots and hope the total ties back to the bank account.  I do keep a small float in the account too as the cash coming out of the account can be higher than coming in if your annual bills come in at the start rather than the end of the year.  I don't want to accidentally go overdrawn.

    I do actually have a couple of bank accounts to keep some of the categories separate to make it a bit easier.  The difference between my income and the budget automatically gets swept into my savings account each month through a direct debit at the start of the month.

    As I've done it this way for years, I'm getting better at budgeting and when I come to the next year's budget I can see where I've overspent etc and amend as necessary.  The only trick is I have to remember to increase some of the categories by a generic 5% estimate for those bills which keep increasing (council tax I'm looking at you...).
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  • South_coast
    I'm similar, in that I have a separate "pot" (savings account) for everything and split it out (I'm with Santander and they've let me set up loads of savings accounts and give each one a name and re-order them on the list of accounts any time I like) - might be worth seeing if you can do similar with your bank? Money comes in to the current account and I leave just enough to pay the direct debits, then shunt the allocated budgets into either the petrol, groceries or personal pots, and everything else into either savings or OP's. Then I can log in and see at a glance how much is still in a particular pot any time I like - no spreadsheet required! - and I can shuffle between pots as well if I need to. Of course, the trade-off is that the accounts have dismal interest so they don't earn anything, but as interest everywhere is dismal anyway it's worth it for my peace of mind and not having to constantly work out how much I've still got left for what and whether or not I'm on track 😀
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • Hazelnutty
    I don't have separate accounts (just one e-savings account linked to my current account) but I keep a spreadsheet of the different pots within that account (about 12 at last count!) The advantage is you can add/remove/change pots without messing with actual accounts but I guess it's a case of working out what the best system is for you. Once you have in place, it should run pretty smoothly and you can schedule in an annual review to sort out any issues/make changes if you need.
    Choose kind:)
  • rugbymadfamily
    Thanks @South_coast and @Hazelnutty, both having separate accounts or tracking on spreadsheet are good options. Like the idea of being able to see what is in an individual account whilst I am out on online banking, but HSBC seem a bit funny about setting up lots of accounts. So am going to try keeping my spreadsheet more detailed for a few months and see how that goes with tracking different pots, I do love a spreadsheet so think I should be able to stay on top of it! If not, may look into getting Monzo or something just to try keep the pots separate.

    Have spent the last few days rolling my cash flow forecast spreadsheet out to Dec 2021 and doing some playing with the numbers in the OP calculator....thats a hard one as each time I just think ohhh if only I could over pay by £x per month, mortgage would be gone in no time. £x being a crazy amount which is well over what we could pay lol. But its fun to do!

    Did first collection of TooGoodToGo (thanks @FtbDreaming for recommending it!), got from an Indian restaurant near us that we have used before and had it for our take away treat, £4 and too much food for just the too of us, much better than the usual £30 that we spend on a takeaway!! Felt like a treat but an absolute bargin and meant we tried curries we wouldn't normally order ourselves!
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
  • Coffeekup
    I do love a spreadsheet.

    Have spent the last few days rolling my cash flow forecast spreadsheet out to Dec 2021 and doing some playing with the numbers in the OP calculator....thats a hard one as each time I just think ohhh if only I could over pay by £x per month, mortgage would be gone in no time. £x being a crazy amount which is well over what we could pay lol. But its fun to do!

    I think most do on here... As you learn more you can do more with them. I've done a couple of pie graphs on certain ones, to see what the biggest outgoings are, it can be eye opening.

    I tend to do the following years in October and I'll do 5 year goals/estimates. I've recently done an 8 year one (as I've had some time at home) as the fixed rate finishes then, hoping to have enough in savings to clear the balance when that come round.

    Problem is mine can get so laggy 2-3 years of colouring cells for payments made, and inserting comments. I have to create a new ones and I'll copy everything across from previous 3 months of the old sheets into a new sheets to reduce the lag 😁

    Try playing with the overpayment calculator if rates were higher, estimating what you'll owe at the end of your current contract. I don't like to look at the interest I'll pay on the new loan so is incentive to hit it now.
    Overpaying 10% of my current balance for me is hard. But a 3 year's of overpayments it'll be easier to hit 10% of the balance which will give me more £££ to put to savings.
  • rugbymadfamily
    8 years is pretty impressive! I've got the detailed month by month done until Dec 2021, then have estimated the OPs through to the end of the current mortgage (Jul 23) for now, planned OPs get my LTV to 72% (provided house prices don't drop!). Hoping should then get a good deal (as purchased on 90%), if I can get to below 70% be an even better deal...2% doesn't sound like much but it is over £7k given the size of the mortgage!  Haha, I too love colouring cells and adding comments - definitely makes it run slow and I hate deleting old sheets as I love to see how things have changed!

    Yeah I'll have another look as the incentive to reduce interest is definitely a good one. I'm trying to be good with the spreadsheet and just stick with the OPs I know we can make, if I am then lucky enough to get a bonus at work that will knock more off, but if I don't get a bonus it won't set me back from the planned goals if that makes sense?!
    Current mortgage (1 Jun 2022): £289,501 - originally £351,999 got to love London sized mortgages!
    OP Goal 2022 = 3.75% in OPs: £6,975 / £13,200
    Emergency Fund Target: 3 months saved ✅
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