34 months countdown - MF before 40!

MFdreamer

Hi all 👋

I’m a long time user of MSE forums but have set up a new user ID for my MFW journey. I’ve been a lurker on this board for a long time as I love reading all the diaries! Such great inspiration!

To hold myself to account, I want to start documenting my journey!

So I’ve had a tough few years to be honest. Found out my husband was having an affair with a twenty year old bimbo when our daughter was 6 months old. Pretty much crushed me to be honest. Very long story short but we are now divorced and own our own separate homes. I’m therefore the proud solo owner of my mortgage. I work in fashion so Covid has really worried me as there have been lots of redundancies and being the only household adult, I would have no back up income if I lost my job! I therefore decided now is the time to really push on and become MF!

Fortunately my financial position is pretty good (thanks to my grandparents who left me an inheritance, my high salary and generous guilt maintenance from my ex). It currently looks as follows:

- Net monthly income: £4,950
- Mortgage gross balance: £85,000
- Mortgage offset account balance: £43,000

My goal is to be mortgage free before I’m 40 which gives me 34 months to pay off £42,000.

My current mortgage payment is £600 a month and I am only being charged £75 a month interest due to the high savings balance in my mortgage offset saver account. I am aiming to overpay £1,000 a month into my offset account which should hopefully mean my offset balance will exceed my mortgage balance by my 40th birthday!

My biggest challenge is managing my spending (clothes being a major problem given where I work!) so I have set up YNAB and am aiming to have 150 NSDs in 2021! Any other tips for controlling spending will be gratefully received!

Will post a full monthly budget in the next few days!

😄

longway2go

Hi, just wanted to wish you luck with your plan, I'm sorry you went through a rough time. You really seem to have your everything up together. In relation to your shopping habit maybe think/work out how much you spend monthly atm and then see if you can chop it in half next month so that you can still have a treat and see how you feel at the end of the month when you have stuck to your budget.  I have a monz0 account and find it really helpful as you can use pots to allocate money so you could maybe do this for your personal spends. 

MFdreamer

longway2go said:

Hi, just wanted to wish you luck with your plan, I'm sorry you went through a rough time. You really seem to have your everything up together. In relation to your shopping habit maybe think/work out how much you spend monthly atm and then see if you can chop it in half next month so that you can still have a treat and see how you feel at the end of the month when you have stuck to your budget.  I have a monz0 account and find it really helpful as you can use pots to allocate money so you could maybe do this for your personal spends. 

Thank you! I was utterly broken hearted to be honest as I married for life and family is so important to me. However my ex didn’t change his behaviour and continued to lie and cheat so I had no choice but to accept defeat or have a full on mental health breakdown (I was close). We’ve been divorced for 18 months now and I now know it was the right thing however hard it was at the time. I’ve only got my stuff together now because I refused to let him see me fail without him (as I think he and many others thought I would).

Thank you for the spending ideas. I am definitely going to do that with the budget for December and also investigate Monzo. At the moment I have 2 current accounts, 1 instant savings and 1 offset saver so I use these to separate money as needed which does help me not to touch bill money.

caeler

Good luck on your mortgage free journey! My mortgage started a few years ago under similar circumstances and I find this is a great place to keep focused. I’m also aiming to be mortgage free by my 40th birthday! 

MFdreamer

  caeler said:

Good luck on your mortgage free journey! My mortgage started a few years ago under similar circumstances and I find this is a great place to keep focused. I’m also aiming to be mortgage free by my 40th birthday! 

Thank you! I find it's hard being single as you have no-one to talk about these things with, or to help keep you accountable. I am hoping to use this diary to hold myself to account

MFdreamer

 Posting my December budget here to ensure that I stick to it as much as possible!! Will compare my budget to actuals in early January

• Mortgage overpayment - £1,150
• Regular mortgage payment - £600
• Childcare - £440
• TV license - £15
• Council tax - £123
• Electric and gas - £110
• Water - £50
• Sky, Netflix (TV and internet) - £90
• Groceries - £400
• Christmas alcohol - £100
• Mobile phone - £20
• Insurances (car, home, pets) - £95
• Sofa payment (interest free credit) - £60
• Car payment (not interest free credit) - £345
• Clothing (my weakness) - £100
• Gifts (most of my Christmas shopping is done) - £100
• Charitable donations - £400
• Random Amazon purchases - £100
• Holiday payment - £60
• Ad hoc items needed for daughter - £100
• Daughter pocket money - £20
• Music subscription - £13
• Fun money - £300
• Items I've forgotten to budget for - £159
• TOTAL - £4,950 matched to my monthly income a la YNAB

I am pretty happy with this as my first monthly budget as I think there is no excuse for me not sticking to it (if anything it's generous - I know I am so lucky to have such a good job) and it will help me to start to shave money off areas in future months. Whilst I want to clear my mortgage, I do have a very intense and high pressure full time job so I want to ensure that I receive the benefit of the stress of this by being able to do nice things with my daughter and treat my friends and family. On that note, I don't actually drink very much so my £100 Christmas alcohol is to ensure I can have a bottle of Baileys and Posh Gin to share with my parents (my single person bubble) over the festive period.

My electric bill is quite high because I have a fully electric car which I currently charge at home (and this explains why no petrol budgeted). Annoyingly I am not receiving the benefit of my electric car as I am WFH so can't use my free workplace chargers (which was the main reason I bought an electric car to make my 30 mile commute free!).

The holiday payment is for a UK caravan holiday with my daughter next summer and this is the last payment.

My daughter only gets her pocket money if she is good and helps around the house/goes to bed nicely so I don't always pay the full £20!

Random Amazon purchases tend to be bits and bobs like vitamins, printer paper, books etc. I know I should cut it down but I wanted to see how I get on with the £100 first.

I'm going to try not to buy any clothes this month but have given myself a budget so that I don't feel restricted. It's soooo hard working around lots of lovely clothes but I am WFH and not really going anywhere so need to remember this when I get the urge to buy! 

DayDreamerandGeneralWaster

Good luck, it sounds achievable. 

On a separate note l haven't heard the word bimbo in years 😂 blast from the past!

caeler

I often feel lucky about my job and income but make sure you remind yourself it isn’t all luck and I’m sure you work exceptionally hard and have specialist skills! Great budget and I have to agree, plenty of places to shave but it all depends on the balance you are trying to get to. Balance is definitely important but in the short term I’ve gone all a bit extreme! 

MFdreamer

DayDreamerandGeneralWaster said:

Good luck, it sounds achievable. 

On a separate note l haven't heard the word bimbo in years 😂 blast from the past!

Haha thanks!! There are many words that I have for her but that’s the only one I can say out loud. I’m totally over it now but I can’t understand why any woman would have a relationship with a married man with a newborn baby. I know it takes two and he is absolutely as much to blame as her but I would never ever do that to another woman.

MFdreamer

caeler said:

I often feel lucky about my job and income but make sure you remind yourself it isn’t all luck and I’m sure you work exceptionally hard and have specialist skills! Great budget and I have to agree, plenty of places to shave but it all depends on the balance you are trying to get to. Balance is definitely important but in the short term I’ve gone all a bit extreme! 

Thank you. Yes my role is very specialist and ironically my salary is actually quite a bit below the benchmark for comparable roles in other businesses but I took it because I’m a bit of a fan girl for the business I now work for and have been for years. I have had to work very hard to get to where I am but do find it hard to accept sometimes as I don’t really feel like I deserve that much money each month. Total imposter syndrome here!!

I think there are lots of areas to shave off my budget but I wanted to see how Month 1 goes before committing anything in writing lol. I can get disheartened easily so didn’t want missing my first month budget to put me off the journey!

Thanks for commenting 😀

mark55man

Hi there think I'll come along for the journey - sounds like an achievable and worthwhile target.  I have more mortgage but a similar timescale.  My financial challenge is too much family, but I'm sorry you had such a hard time earlier.  Generally though what doesn't break you does make you stronger and you seem to have come through with flying colours (plus a little guilt money never hurts however much the alternative would have been your choice)

My MFW challenge (which I have just started talking about on my 5 year debt free diary - only a few months to go to my DF date) is to bring my end date in from 2027 to 2024 (stretch target 2023).  This is complicated, as I can't literally overpay as I am on a 7 year fix and have limited OP options - so I am going to create a matching investment pot which will be my "Mortgage Neutral" fund or  kind of like your offset.  At the point my mortgage is paid off then retirement comes into play for me, and I know you are decades away it does creep up quickly

Playing with spreadsheets indicates that over the 3-4 year time period, assuming different (but realistic) growth rates makes very little difference to the MFW timescale (maybe 1 month), so I will be quite cautious with that fund and had I been allowed to, may well have decided to just follow the OP course.  I think I mention that as you do get some (including myself sometimes) advising that overly focussing on early mortgage repayment is not optimum - but over such a short timescale, I would just go for it and then worry about other financial aspects later

anyway good luck and keep posting