Future Proofing my life: Deposit saving then MFW journey in under 13 years

LadyWithAPlan

@KajiKita we are all so adulting   But 16 times OPs is a fabulous grown up thing to do for you  and a terrible thing for the  bank who has now lost for ever the interest on those OPs. Are you tracking what interest would be over the life vs what it is.

A large part of the joy of finally owning will be a real not virtual OP spreadsheet kicking off - I will be tracking interest saved... sad possibly...motivating yes!

@savingholmes indeed we are where we are cos of our  choices and circumstances- where we will be in the future also heavily depends on our decisions moving forward / although fate does like to test us sometimes 

Fabulous news
Just heard the overseas side hustle thing I was wondering about doing (and paid a fee for possible inclusion yesterday ) I am doing next summer.  However I am v excited - it was a bit of a big win of opportunity for me and will advertise my side hustle. some outlay (flights/accom and a fee) but I will earn some/all  of the cost back and aim to actually make money .. Sorry for vagueness
 I did it a few years ago and have been thinking of putting a fire under my derriere to get my previous pre covid career back on track and this is v exciting - in one of the coolest cities in the world that I love. There were only a few International spots and I got one .. they sort out the visa paperwork etc as well for me so I can work there and get paid etc.
I really only get big stuff done when I have a big external goal so I am excited as this is a great motivating exciting target
This means I have a £400 odd payment for next month but not an issue and will start the saving pot for that..

This is not the same side hustle as the possible March stuff but if they both work out I may well be able to combine them both in the summer


Spending - on my waitrose voucher  £7.90 and found Chermoula again!
I bought in a failed attempt for cashback - quido or tcb a £10 john lewis voucher - for some reason I didn get the cashback so I have been carrying for 2 months a £10 voucher which I used in Waitr*s today so I spent but actual cash didnt leave

I did see some Chermoula paste £2.50 in waitrose as the £4.99 50g of spice arrived via amazon.. I may keep both or give the powder as a Xmas gift
Also bought tabasco and DF red spread 
£1.50 crisps 

 £160.18/£150  grocery    + £17.14/100bulk 

Voluntary spending  £1317.35 
Xmas gift - family - Bought a robot vacuum mop from Amazon £150 - norm £229 - not sure why this is so cheap - new as well. Mine was under £100 and is still working well 2 .5 years later  - family member going half so /


Coffee out - £2.80
I saw a friend for a  outdoor cafe catch up this morning - she bought the hot drinks first and then I bought some water £2.80  - so lovely to sit outside in  glorious sunshine this morning (even took my jacket off) overlooking the boats.
She is due to give birth  v soon  so I was giving her some gifts a friend had given for me from the States. She looks gorgeous and I am so happy given they tried for a while that all is well and her next stage of life is happening..

Flat buying - positive thoughts
I popped into a high end furniture/light shop today and ogled the light fittings for future... It will be wonderful to decorate for permanency when I buy. I do already own all my furniture and white goods and lamps plus can paint as I wish so my flat looks v my taste but owning will mean the chandelier I bought will go up and a more permanent placement of the art ..
However I know how much I travel and reading Piano's diary and a few others I know for MFW and pension I need to not get too big a mortgage ... but somewhere safe, I love and want to stay in for a decade..

Didnt go out this eve - saved £60 minimum
I have already busted my entertainment budget this month - as I did last month so as my friend is ill rather than asking other fabulous friends to go  - I have decided to stay in ...

LadyWithAPlan

Those who use YNAB I have a few queries please
 
I had discounted YNAB as I do have my own excels and run saving pots/sinking funds.  I use accting software for my business so not sure I want yet another software to have to reconcile for personal and saving  etc. However Piano diary  is making me think again on YNAB  for tracking my overspends (I am saving for house deposit and nearly there so its easy to overspend more and save less as I have no real immediate visual  consequences which ynab might force on me...

Any thoughts on this appreciated as I just watched a 30 min video on how to use the credit card & set up videos side which was good/clear

Questions ...
Can ynab connect to uk banks for data pulling?
What about my business expenses  when they intertwine  as obviously I do have a choice on some of that as I have my own company. Are they easy to add in say a bus expense category as its all my cash - cant get my head around that...
Taxes can they be added in easily as I am se /ltd co?
do you have to reconcile like a bank?

Sistergold said:

Weldone @LadyWithAPlan with the decluttering, you have really inspired me to “pickup where I left” on my decluttering journey. I have been on it for a while now it has been slow but sure. 

You are doing well with keeping track of your money and your savings are going well. Minimalism, well I like thinking of that and hope to earn the minimalist title by the time I retire! I have managed to minimise my shopping for sure. 

Tx SisterGold - I have this evening popped my toaster on the local community whats app to see if anyone wants it.. I think I will track the daily/monthly count ..
The daily searching for stuff has me looking at my wardrobe which I avoid.. It feels like time to get that moving as well.
so done 1/25 things today so now running around before bed to do it  

KajiKita

@LadyWithAPlan, thanks for the encouragement 😊
No, I haven’t tracked how much OPs would save me in interest over the remaining term as I get into a total muddle about how to work it out / set up the formula in my spreadsheet ….. 😢

KK

PennysIntoPounds

Congrats on the side hustle opportunity win!

Merlin's_Beard

YNAB - yes, it can connect to UK banks fairly easily.

I don't work for myself but I have a  "to be reimbursed" category on my work expenses. I'm guessing you have entirely separate personal and business accounts though so it might be easier to just run two budgets - one personal, one  business (this is entirely possible on YNAB) - and the business one you can always have a tax category where you  set aside a certain percent for taxes?

Yes, you need to reconcile. So easy to miss things if you don't.

The reddit ynab is easily searchable and full of good advice though, so it's worth a google search through there for specifics.

I've always found the credit card thing intuitive - you pay for whatever, it takes the money out the relevant pot, the money is sequestered in the credit card account until you pay off the bill - so it forces you to never buy things you don't have the money for now (ie no "next month's paycheck is covering this"). There are a lot of internet things saying it's  confusing but I think that's mainly people who came from previous versions of YNAB where it worked differently.

LadyWithAPlan

KajiKita said:

@LadyWithAPlan, thanks for the encouragement 😊
No, I haven’t tracked how much OPs would save me in interest over the remaining term as I get into a total muddle about how to work it out / set up the formula in my spreadsheet ….. 😢

KK

3 possible solutions if you want - or other readers may be interested 

1) I guess the easiest way instead could be to track daily interest you pay and it going down .. so a different measure but still a trackable easy number

 In case you not cleat on this - taking current balance of your principal and  multiply by your current interest rate example so £100k principal x 4% rate for example  = £4000 a year interest - divided by 365 = £10.958 per day 

You could then take your balance at the next period and see what it has dropped to -as I assume your bank gives you a breakdown of the next payment due and what interest on that is?  so if your normal standard payment will pay  £500 off principal that month as well as interest
then  no ops principal £99500 x 0.04 =£3980 interest per year so now £10.904 per day interest 
if you had OP over the month say £200 then principal will be £99300 left 
x 0.04 = £3972 so £10.88 per day do you can see here - so you are Saving 2 pence per day 
£10.904 v £10.88 = 2.04 pence a day you saved with £200 op 

Plus each OP means your next standard balance pays off more principal as £200 less is  owed .

2) OR 2 other possible simple approx solutions if you can be bothered - which for me I think would be motivating so might be good for you

do you have a spreadsheet with mortgage and interest calcs  running out to the end? There was one on here (by loco blade I believe ) which allowed you to add current principal and allowed you to add ops both regular and one offs if not by your bank and it recalculates interest and end of term after each op - 
you would have to assume your current ir and then whatever rate at end of mortgage fix so it won’t be perfect 

- so you could look at todays balance and total interest due to the end of your mortgage if no OPs in the master spreadsheet and  also to the end of this pay cycle 

then after you have done your Ops at the end of each month slide down in the master spreadsheet the principal to what you owe after OPs now vs principal if no Ops and see what the interest difference is as you will have skipped a few steps

3) Or plug the numbers into a op calculator using your bank’s statement after each standard payment then compare to next month with vs without OPs which come direct off principal - those calcs will tell you full interest due before and after your op that month and you can just track that as a number 

apologies for this long answer it’s probably clear as mud - you probably do know the above - but it was my Sunday morning maths thought which I do love .. 
I guess this means I am more nerdy than I know and ynab probably will be fun for me 

Does anyone have the link to hand for that loco blade mortgage op calculator ? 

I have one but it’s integrated in a huge spreadsheet - if no one has I could try to export it and hope it’s not corrupted 

South_coast

I think you can punch the numbers into the MSE mortgage overpayment calculator as you go along and it will tell you the interest saving each OP makes (it does assume you remain at the same rate for the duration of the mortgage though, so not 100% accurate).

I never tracked what I saved with each OP, but I did keep a record of every payment I made, including the fees and the standard payments (not right from the start, that was a job for my online statements one dull Sunday afternoon!), and compared that to the repayment schedule the bank gave me when I took it out. As it says in my signature, I repaid just over £72k, which from memory should have been about £140k (not including 2x arrangement fees) if I'd just made the minimum repayments. With a relatively low amount borrowed and fairly respectable interest rates of 2.08% for 2 years and 2.58% for 3 years, I found that quite a staggering difference!

LadyWithAPlan

PennysIntoPounds said:

Congrats on the side hustle opportunity win!

Tx it’s a bit scary as will require effort and focus and a degree of luck vs being lazy and doing nothing .. 
need to pay the balance to book it on full today so a sudden approx £400 and only got £68 left in this pot .. I may have to use my future tech pot savings and a few others vs pulling down emergency savings - as I am waiting on the phone - think best way is to buy a iPhone 14 Pro Max as super fast big battery as a refurbished but I can wait 

LadyWithAPlan

South_coast said:

I think you can punch the numbers into the MSE mortgage overpayment calculator as you go along and it will tell you the interest saving each OP makes (it does assume you remain at the same rate for the duration of the mortgage though, so not 100% accurate).

I never tracked what I saved with each OP, but I did keep a record of every payment I made, including the fees and the standard payments (not right from the start, that was a job for my online statements one dull Sunday afternoon!), and compared that to the repayment schedule the bank gave me when I took it out. As it says in my signature, I repaid just over £72k, which from memory should have been about £140k (not including 2x arrangement fees) if I'd just made the minimum repayments. With a relatively low amount borrowed and fairly respectable interest rates of 2.08% for 2 years and 2.58% for 3 years, I found that quite a staggering difference!

Wow that’s a huge difference £68k ! Especially on such low interest rates
It really hammers home that I need to borrow the least i can whilst buying something I want to live in for the next 5-10 yrs minimum 

Every £100k I borrow is about £5k a year interest and looking at a £275k (£400k prop) vs a £350k mortgage (for a £475k property)  is £1145 vs £1458 per month in interest payments only at start ..
I don’t have my full £125k deposit as yet due to unpaid invoices but given my discretionary voluntary spending is well over £1000 per month I can see where I need to take action - I need to track work expenses that I have choices over as well 

Your  Tracking solution makes sense as at least you know what you actually paid in interest over the lifetime of your mortgage vs what you should have 
- good thoughts for when I get my mortgage - of course that requires me to go outside in the london gloom today to look at flats

I will look at the OP calc - though I love the loco blade one I found on here as it’s v exact and fun to play 

I maybe indeed trial ynab for a year as I want to track all my spending exactly for  an annual review .. the last 2 months ouch … and of course Xmas is looming 
I will not start it til after I have sorted out my tax returns ! So either month of Dec Or for the new year start - I watched a few YT videos by Mike Tree on it as I know it’s all about set up to minimise issues and effort 

BookWorm

Does anyone have the link to hand for that loco blade mortgage op calculator ? 

I have one but it’s integrated in a huge spreadsheet - if no one has I could try to export it and hope it’s not corrupted 

https://forums.moneysavingexpert.com/discussion/1157173/my-excel-mortgage-spreadsheet/p1