Getting shot of the mortgage sooner than 2049!

Bluegreen143

Hi everyone! 

So... 2049... yes, that’s the current end date for our mortgage and at that point I’ll be (gulp) 61 and my husband Red will be 64! I DO NOT want us still to be paying a mortgage in our 60s and so I’m starting this diary.

I’ve had a diary over on debt free wannabe for the last 8-9 months and it’s been so much fun writing it, but we are debt free now (mortgage and student loan aside) so now it’s time to focus on saving, investing and mortgage overpayments.

It’s a good time for a fresh start as our circumstances have changed quite a bit already in 2021. 

On New Year’s Day I was a SAHM with zero intention of working for another 2-3 years - I was loving being at home with my two kids (DS5 and DD2), cooking & baking from scratch, trying with limited success to grow veg, learning skills like sewing and knitting etc. 

About ten days later my old manager from my last job, three years ago, called me up totally out of the blue to ask me to apply for a job in her team. After much emotional turmoil I realised this opportunity was too good to pass up - it came with a promotion and the pay is good, I like the work and team, and I’m able to work from home and part time hours (finish at 3 and a Friday off). 

I’m really enjoying being back and of course, even with childcare to pay, it’s still resulted in much more free cash for our family each month - we were only getting by before through very careful budgeting and strict frugality. We do hope to keep this up while using most of the increase in income to save and get ahead with our mortgage.

So a few facts about us, if you haven’t been on my old diary:

• we have two kids, Monkey who’s 5 and Bambi who’s 2
• we have three lovely chickens who help keep our egg bill down (though our chicken feed bill cancels that out!)
• we live in Glasgow
• my husband Red fixes and makes things as a hobby, mainly out of wood but he’s partial to using copper too, and he’s trained in gas & electric too through his work - so we are always doing random projects at home 
• I LOVE to make endless lists and budgets so if you hang around here you will be subjected to a few!

And about our mortgage:

• as of today we owe £112,843.07
• interest rate 1.89% fixed til Feb 2025
• monthly repayment £421
• we bought the house 6 years ago for £155k (yes, we remortgaged the term up to 30 years again in 2019 which doesn’t sound sensible but we were struggling with the payments on one salary) and I think it’s worth roughly £170-175k now.

I’ll do a rough budget below though I use YNAB, which encourages flexible budgets, so it does vary each month as we move money between categories. This two income budget is new to us too so there will no doubt be some changes!

Bluegreen143

So, rough SOA/budget type thing:

DEBTS
Mortgage debt: £112,843.07

No other debts except my student loan which I’m not currently paying & am not going to count!

Savings: 
Help to save accounts: £300 (we put the maximum £50 a month each into our own, they aren’t long opened) 
Stocks & shares LISA: £110 in it currently (DD set up for £50 a month)
We do have workplace pensions with not huge amounts in but we’re in our 30s so hopefully can boost these going forward!

We have one (pretty old) car with no finance on it; Red drives an employer-provided van for work.

Short term savings/sinking funds:
Emergency fund: £340 (aim is to get this to at least £1,000, probably £2k, before starting to overpay the mortgage)
Car bills & repairs/replacement: £259 
Gifts & Christmas: £72.81 (it’s Red’s birthday this weekend so have just raided this)
Holiday: £200 (have a local holiday in a lodge in Scotland booked in the summer, hoping it can go ahead)

Rough monthly budget:

INCOME £3,400-£3,600
Red’s salary: £1,900-£2,100 
My salary: £1,350
Child benefit: £140 every four weeks 

FIXED BILLS £1,577
Mortgage: £421
Childcare: £575 
Life ins: £36
Lifetime ISA: £50
Gas & electric: £115
Internet & TV license: £37
Council tax: £153 
Help to save: £100
Phones: £90

FLEXIBLE SPENDING £690-820
Food: £300-£350
Household/pet: £60-70
Petrol: £60-70
Kids: £20-30 this is pocket money, any bits I buy them like books, would include activities and outings like soft play but we can’t do that anyway so it will increase when activities open again
Me: £50-£60
Red: £200-250 (he vapes and likes a couple of beers in the evening; also often includes project stuff and clothes for him, random bits he buys for the house and doesn’t reclaim from the joint funds; his account is a bit of a black hole!)
Misc: just catches random bits, I don’t tend to budget in this unless I need to

FUTURE (sinking funds) £620-£670
Gifts: £150
Car: £150 bills like insurance plus money for repairs, also building this up as a replacement fund 
House: £50 insurance plus any random maintenance, we tend to save for redecorating or similar as it’s own fund when needed
Garden: £20-40 but don’t usually put anything in during the winter 
Holiday: £200
Subscriptions: £20 YNAB, Amazon Prime, Disney+ 

Clothing: £20-40 
Health: £10-£20 dentist/optician - haven’t actually funded this yet as it’s a new category 

This leaves around £300-700 to budget for goals depending on income and what else is going on that month eg this month I paid for a Scottish Gaelic course I’ve been doing over zoom so that was £60.

Current goals are:

WISHES & GOALS
- Emergency fund
- Mortgage overpayment 
- Conservatory
- Then we are aiming to pick one small goal at a time - currently it’s a new bed for my son.

Currently we are prioritising the emergency fund until it gets to be a bigger amount but I hope to start making mortgage overpayments soon!

Four_Seasons

Hi, I have enjoyed reading your other diary so very much I hope you dont mind but I have followed you to your shiny new diary.  All the very best in achieving those wishes and goals x

Baileys_Babe

Hi @Bluegreen143 I did wonder if you would start a new diary as your circumstances have changed so much.

Bluegreen143

Oooh thanks for leaving my first comment @Four_Seasons! The more the merrier and do feel free to join in the chat 🙂 I hope everyone who’s been on my old diary finds me again as I’ve found everyone very helpful and encouraging!

Viking_mfw

Hey BG nice to see you here. Shiny new diary!

LeighofMar

Happy MFW diary. It sounds like you will progress quickly. I hear you on the 30 year mortgage. I would be 68 if I took 30 years to pay the mortgage. Hope to be done in 2 years when I'm 45. Let's enjoy being MF while still young enough to benefit from it. 

Bluegreen143

Thanks everyone!

@LeighofMar hear hear! Definitely want to get it paid off much sooner, hopefully before 50 if not before, and want to be in a position I could retire by 60 if I want to (not 68 which is my current state pension age). Also that’s amazing progress on your mortgage!

joedenise

Another who's followed you across from your old diary.  Have bookmarked so I can keep up!

Bluegreen143

So a slight budgeting fail - somehow in doing my fresh start with YNAB this month, I failed to realised that my gas & electricity bill had yet to be paid - for some reason I named the category “gas & electricity - 1st” but it comes out on the 19th! Nowhere else to really take it from so the emergency fund is now at £234.26 and I took back the £7 odd I had started budgeting in March as the beginnings of a buffer 😂 Still, this would be very stressful if I had no savings at all, rather than just a bit of a setback. Red gets paid a week today so will be able to start the budget for March then.

Got the most enormous pile of forms from Bambi’s new nursery to fill in today, yawn. And need to bake Red’s birthday cake for tomorrow and make a card from me/supervise Monkey making one for the kids. 

May try to turn Bambi’s artwork into a card too - I’ve always just given people one card from both of them before but she does love drawing (scribbling) and painting so there is a stack of art sitting there. If they can’t draw yet and have a nice bright scribbly picture/painting I like to cut shapes out of it (eg a heart) and stick the shape onto a card and it’s a good way to make something that looks great even if they are still a baby. 

Car is in for its MOT today so wish me luck- hoping the cost stays within the £270 I have in the car category. Failing that we still have the £240 in the emergency fund too. It did pass with nothing needed last year except a tire change but I’m sure I won’t be so lucky two years in a row! 

Finally, meeting a friend for a walk in our local park today with our children which is nice as I’ve hardly left the house or seen anyone in weeks 😆

Baileys_Babe

Have a lovely time with your friend.

At least you have the money for the gas and electric.