Aiming for Mortgage Free!

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  • South_coast
    South_coast Posts: 4,960 Forumite
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    Now you've got your OP target for 2020, would it make sense to snowball absolutely everything to your EF target so you hit it faster and have that comfort, then you can switch to going all-in on the mortgage? 
    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!!!
  • rugbymadfamily
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    Now you've got your OP target for 2020, would it make sense to snowball absolutely everything to your EF target so you hit it faster and have that comfort, then you can switch to going all-in on the mortgage? 
    That is what I am torn between! I am enjoying seeing the mortgage go down (however minimally lol!). But think that getting the EF to 3 months expenses would help my stress levels (husbands job is fine and mine was with first lock down, but a bit worried that another one would put mine more at risk). Been re-running the calculations over the weekend and given my holiday in Dec has been cancelled, I can funnel that money into the EF and reach the balance with my payday at the end of Jan and then can get cracking through the OPs from Feb. 

    Think will continue to put any MB profits into the OPs as then it feels like progress (however small!) is still being made. Got my annual mortgage statement through last week and the daily interest is £23.50.....just the DAILY INTEREST! I mean, thats pretty mental. But is what it is, thats the price of London. So trying to follow some good advice from reading the debt-free wannabe diaries and just break it down into 1%'s. With focus on EF for next few months, have re-done calcs for next year and we can comfortably make just over 2% in OPs (c.£7.6k), but I want to hit 3% which is £10.6k....so some money to be found from somewhere! Planned OPs do not include any bonuses or husbands second income, as neither of those are certain or reliable! But that would hopefully fund the £3k difference. If not, will have to come up with some other ideas (I am good at doing but terrible at ideas!), but both of those will be known amounts by March so gives me the remaining 9 months of the year to get the rest together if needed!
    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: 3,705 Forumite
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    That's a good way of doing it and then even if you are putting tiny amounts in the mortgage you still feel like you are making progress towards your goals.  I've regularly done the same thing in the past  :)

    Definitely sort out the EF as you really never do know.  I've had to use a fair bit of my PILON/redundancy to get me to my final EF amount.  I really should have increased it before now, but at least I wasn't too far away that it couldn't be fixed in a redundancy period.  I think I used it a couple of years ago to get my OPs to the max and get us in a better mortgage bracket and never quite topped it back up again. Naughty me  >:)
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  • rugbymadfamily
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    Been finalising the budget for Nov and Dec (now a few things are firmed up like Dec holiday being cancelled) in the last few days. I've been reading a lot of the debt-free wannabe diaries (some of the people in there are doing some seriously impressive work at smashing through the debt levels) and obviously other peoples diaries on here and think I need to change how I do my budgets. Basically, my monthly budget has income less all fixed expenditure (mortgage / savings / utilities etc). And then the rest I tend to budget on a per week basis, so if I know we have a birthday event (lol not many of them this year), then I budget more for that weekend, but if we buy random things like vitamins or house stuff, it just sits in the weekend spend. Having spent this month (payday is 24th for me) tracking all monthly spends, I just really don't think that is the best way to do it.

    Reading other peoples diaries, the idea of "pots" is a very new concept to me. I did set one up this month for future car expenses. I've never bothered doing this before, we have always been lucky enough to have enough disposable income that we just pay the car insurance in full in the month it is incurred and then tighten our belts that month on the other flex spends like take aways / entertainment. Same with Christmas, its all paid for from Decembers pay, then just have to be careful on other spends that month. But wouldn't it make far more sense to spread those costs throughout the year and then no specific month is "tight" as we have the insurance saved and Christmas money etc?! I'm sure anyone reading this will be thinking, well year obviously, but its just not a concept I have ever thought about before. Always just budgeted for things in the month they fall and get to zero in the joint account by the end of the month.

    So, plan for Nov and Dec is to continue to fully track my spends and then I will have a better idea of rough monthly figures (as will have 3 months of data) to start setting up my pots from Jan 2021. I don't think I will use YNAB or anything like that to do it, I think I can do it all very easily via Excel. Just have to then get used to the bank balance being a figure not meaning that the money is available for immediate spend as it actually has a "pot" and a job it is allocated to for future spends. Will talk it through with DH as everything goes through our joint account (bar our own fun money), although to be honest, he pays very little attention other than asking about spending from it (we have a rule that more than £30 must be discussed - just so the budget doesn't get upset from random spends). Sure he won't have a problem - be more just making sure that him seeing the balance in the joint account doesn't mean its there for spending lol.
    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 ✅
     
  • rugbymadfamily
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    Ok that got longer than expected just typing out thought processes :)
    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: 3,705 Forumite
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    Ok that got longer than expected just typing out thought processes :)
    Ha ha!  That is exactly how I do it.  I use trusty excel and budget everything and split it across a full year.  Otherwise the end of the year would be very stressful for me as lots of yearly things are all due at the same time.

    Just try not to use too many categories as it can be confusing!
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  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    This is where tools come in really handy for projecting forecasting and repeating,  most stuff is predictable so you can look ahead even longer than a year(minimum) to manage cashflow as most years are just repeats of the previous year  with some minor changes.

    MSMOney is probably still the best for this on desktop,  much of the focus of newer tools it app/phone 

    Anything less than a years ahead is not really budgeting, enveloping/piggybanking is not really needed if the cashflow ahead is ok it just works if you stick to the plan for yearly totals.
  • rugbymadfamily
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    Anything less than a years ahead is not really budgeting, enveloping/piggybanking is not really needed if the cashflow ahead is ok it just works if you stick to the plan for yearly totals.
    Yup just got to stick to it, becomes the trickier part! So hoping if I track spends for 3 months in total that will give me an really good idea on what size is needed on average per month. Then I can set up the pots from next year and roll it out for 12+ 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 ✅
     
  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    Most things are fairly predictable(a lot even fixed or going to be close)  once you get the tracking data for the regular stuff.

    Can still start the plan for a full knowing that the totals have to add up to the income, as each one becomes clearer you can adjust the plan if things are out from the initial guess.

    The ones that are not so regular like clothes it is the amount allocated for the year that is needed in the plan. 
  • rugbymadfamily
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    Yes definitely the less regular like clothes / shoes / birthdays which require a bit more thought. Will start on the 2021 plan and then can tweak it based on results for next few months. Sure even once I get started there will be extra tweaks needed here and there. Looking forward to getting it fully under control and then getting those OPs smashed through!
    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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