New way of life

saundyc

Ok so I've been reading alot of diaries and decided it would be an idea to do my own to keep me focused and on track. We have currently remortgaged our house to consolidate debts, dh buying a new car and money towards an extension. This move was to take the burden off our current situation of paying over £1,000 a month towards debt so remortgage is for £80k over 15 years which costs £506 p/m. This house is owned outright and I understand the risk taken by doing this but it was a last resort. We also have a 2nd home which is rented and the mortgage on it is £116k left over 27 years.

So when the debts are paid off using the remortgage money, my aim is instead of putting the £12k towards an extension, I'm going to put £5k into an emergency fund and the rest towards the extension. I've organised all new accounts to put our money into pots for emergency fund, yearly bills, extension, emergency savings and children's expenses.

My dilemma was to either continue with the extension or overpay the remortgage. I'm hoping to do both. Our plans for the extension are passed and we have until Oct 2026 to start the building process. My aim for the extension is £40k. I also aim to pay any unexpected amounts that we receive off the remortgage.

I've also set me and dh up with Lifetime ISAs and a weekly contribution which will run until we're both 50.

I suppose my plan is:
£5k emergency fund
£1k emergency saving repairs etc (annually)
£6k yearly bills
£40k complete extension by 2026
Pay off remortgage earlier than planned. 

I understand that we will have to be cautious with our money and I'm trying to have a safety net there for any unexpected expenses.

Any advice or tips is always appreciated.

twiggy86

Hi! Well done on starting a diary - it definitely helps keep me accountable and more focussed. 

Have you identified where/ why the debts built up? I hated going back through my statements but it was enlightening as I honestly couldn't have told you! 

Also have you made a plan as to how you're going to achieve your goals? One tip I've found is to set mini-goals - e.g. paying off £80k is a big target and could be dis-heartening if you don't set short term goals to help you see the progress along the way.

And my key thing - no debt repayment/ saving is too small! 

Good luck!

saundyc

Hi thank you for your response. I have realised that I never saved and majority of the debt is car loans or finance. So instead of preparing for future expenses, I just relied on loans. In relation to my husband, he's useless with money and unfortunately he just demands a new car / caravan and these are impulse buys instead of actually realising the long term burden. I know this remortgage is a similar thing and this new car but we had a long discussion and we both realise it has to stop. This is our chance to save and be prepared for the future. I have downloaded an app to keep on track with targets. I haven't set up a specific target for the remortgage, it will just be over paid when we have the money to do it. I am still debating whether it will be a better option to just overpay the mortgage and forget about the extension but it's always something I planned to do and it will be mean more space as the kids get older. It's kind of a battle of head over heart and I can't seem to settle on a decision!