Where to focus - mortgage, renovations etc?

shellstar

Hello,

My partner and I bought our first home together last year (we're late 30s, and both had homes of our own before). The mortgage is high, but it's a forever home and we also only put down a 15% deposit so as to keep some cash back for renovations. Although we have a lot in savings, we've found the cost of materials, labour etc. to be through the roof, and it's next to impossible to get anyone to come and give quotes. We both had fixer uppers before, so we aren't novices but we're in Oxfordshire and it's clear Brexit/Covid/War are really driving things sky high. In addition, we've recently found out that we will need fertility treatment if we want a family. We can't go abroad for a lot of reasons, and the UK is expensive. We know we're incredibly lucky financially (and I grew up with nothing and struggled all of my 20s, so I really do know this) rising cost of living coupled with expensive renovations, expensive fertility treatment (and hopefully an expensive child at some point), expensive mortgage, we really need to do make sure we're making every penny work and putting things in the right place for the long-term. I do not take our current position for granted and I know things can always change very quickly. 

So, here is our current SOA. All thoughts welcome. I'll put notes below:

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 

Number of cars owned.................... 2 [I've considered giving up my car, but we live in a rural area and my partner works away during the week, so it would be a real pain]

Monthly Income Details[/b]

Monthly income after tax................ 4610

Partners monthly income after tax....... 2665

Benefits................................ 0

Other income............................ 0

Total monthly income.................... 7275

Monthly Expense Details[/b]

Mortgage................................ 1924 [we've just agreed we'll start paying £120 extra per month towards this. We want to keep mortgage payments 50/50]

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 213.95

Electricity............................. 65.15 [dual duel fixed until Dec. 2023]

Gas..................................... 65.15

Oil..................................... 0

Water rates............................. 23.7 [fixed rates. They won't put in a water meter. I've asked]

Telephone (land line)................... 0

Mobile phone............................ 22 [for both of us]

TV Licence.............................. 13.37

Satellite/Cable TV...................... 89.99 [partner has Sky sports, I have Netflix. He'd rather die than miss any of his rugby]

Internet Services....................... 15

Groceries etc. ......................... 450 [this is high I know. For 2, I try to keep us to £75 per week for everything, inc. booze, but we do have people over for dinner a lot so this is why it's higher]

Clothing................................ 50 [mostly me. Most months I don't spend anything, and then I'll splurge]

Petrol/diesel........................... 250 [mostly my partner as he works 100 miles from where we live]

Road tax................................ 19.3

Car Insurance........................... 531.47

Car maintenance (including MOT)......... 71

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 52 [dental plan and opticians - I need new glasses soon]

Pet insurance/vet bills................. 31.75 [1 dog. 5 year old rescue. This is insurance and also a plan with the vet that covers routine appointments, vaccines, flea meds etc.]

Buildings insurance..................... 11.4

Contents insurance...................... 11.4

Life assurance ......................... 47.35 [and critical illness for me. Partner is serving military and we couldn't find anyone to insure him]

Other insurance......................... 0

Presents (birthday, christmas etc)...... 75

Haircuts................................ 30

Entertainment........................... 200 [includes takeaway, drinks out, any excursions]

Holiday................................. 30 [we mostly go camping in the UK. I'm pushing for a bigger holiday this year, but will cover that with a bonus I'm due.]

Emergency fund.......................... 200 [this goes into my stocks and shares ISA and we don't touch it]

Savings................................. 2000 [I save £1500, partner saves £500. This currently goes to savings for renovations, IVF, partners upcoming 40th, my mum's upcoming 70th]

Subscriptions........................... 40 [YNAB, Private Eye, HP ink etc.]

Giving.................................. 120 [I actually feel guilty this isn't more]

Home Maintenance........................ 50 [for incidentals mostly. If it isn't spent, I usually re-purpose to booze. ]

Work accomodation....................... 130[My partner stays on base during the week at about £100 per month. I travel to our head office quarterly, so the £30 covers my hotel when I do that. I took the job pre-pandemic and we planned to buy our house closer to the office, but we can stay nearer friends and family now.]

Total monthly expenses.................. 6832.98[/b]

[b]

Assets[/b]

Cash.................................... 19538 [approx £5k for renovations, £10k for fertility treatment, rest is partners and mum's birthday party/present - mum wants a walk-in bath].

House value (Gross)..................... 510000

Shares and bonds........................ 10500 [this is our emergency fund]

Car(s).................................. 29000 

Other assets............................ 0[b]

Total Assets............................ 569038[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 411856...(1924).....2.69[b]

Total secured & HP debts...... 411856....-.........-   [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Santander......................10260.....102.6.....0[b]

Total unsecured debts..........10260.....102.6.....-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 7,275

Expenses (including HP & secured debts). 6,832.98

Available for debt repayments........... 442.02

Monthly UNsecured debt repayments....... 102.6[b]

Amount left after debt repayments....... 339.42[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 569,038

Total HP & Secured debt................. -411,856

Total Unsecured debt.................... -10,260[b]

Net Assets.............................. 146,922[/b]

[i]Created using the SOA calculator at www.stoozing.com. 

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

I'm not looking to live on a total shoe string - I really did have nothing growing up. My 14 year old dream was to have my own coat (not share with my Dad, who worked nights) and be financially stable. True story. I work hard and I want to enjoy the fruits of my labour. However, I'd be very open to obvious areas we're paying too much, and also, do we prioritise getting the mortgage down, or saving for renovations (honestly, it's clearly gonna cost upwards of £60k, probs much more, to get this place where we want it)? Things are so much money! I'm also a little worried how we save for those things, overpay etc. plus childcare if we do manage to have a family, but I guess that is tomorrow's problem (fingers crossed!). I am due a big bonus from work soon, so I am hoping that will cover any additional fertility treatment we might need. 

Thanks for taking a look and I'll hopefully turn this into a diary as we make progress.

anotheruser

This will be worth listening to: https://www.bbc.co.uk/programmes/m0016pqy
BBC Moneybox about the cost of IVF.

Depending on what health district your new house comes under, you can get between 1 and 3 rounds on the NHS free.  This is from egg collection right through to a confirmed pregnancy.  However certain conditions have to be met - no smoking or drinking, weight issues and other things.  Go to your GP to get referred to the nearest clinic.

Also check out Access Fertility and Nurture Fertility.



You live to your means though.
Try facing fertility treatment (that isn't free) if you're on half of what you take home every month, as well as paying many of the bills you pay...

Stop entertaining friends as much.

Look at cutting down the Sky Sports package.

Subscriptions to HP ink?  Do you really print stuff these days?

Subscriptions to YNAB?  Get rid of that for starters!

You spend £30 a month on haircuts?  I appreciate women's are a lot more than mens.  But £30 a month?!

You spend £52 a month on medical stuff?  Glasses can cost less than £50, which should be good for two years until you need a new test.

£531 a month on car insurance?  You sure?  What the hell are you both driving?!  I paid £194 for a year.

Because you are living pretty comfortably, you will spend more on these things.
It's great you have your forever home but you have to really push yourself and change habits if you really want to pay off your mortgage quicker.

South_coast

Hello 😀! I think the car insurance amount might be a typo (hope, anyway 😳). £30 a month on haircuts seems OK to me, mine are more than that....

Well done on everything you have achieved so far. You've really turned your life around from your childhood and put yourself into a strong position for the future. Good luck with all your plans x

shellstar

anotheruser said:

This will be worth listening to: https://www.bbc.co.uk/programmes/m0016pqy
BBC Moneybox about the cost of IVF.

Depending on what health district your new house comes under, you can get between 1 and 3 rounds on the NHS free.  This is from egg collection right through to a confirmed pregnancy.  However certain conditions have to be met - no smoking or drinking, weight issues and other things.  Go to your GP to get referred to the nearest clinic.

Also check out Access Fertility and Nurture Fertility.



You live to your means though.
Try facing fertility treatment (that isn't free) if you're on half of what you take home every month, as well as paying many of the bills you pay...

Stop entertaining friends as much.

Look at cutting down the Sky Sports package.

Subscriptions to HP ink?  Do you really print stuff these days?

Subscriptions to YNAB?  Get rid of that for starters!

You spend £30 a month on haircuts?  I appreciate women's are a lot more than mens.  But £30 a month?!

You spend £52 a month on medical stuff?  Glasses can cost less than £50, which should be good for two years until you need a new test.

£531 a month on car insurance?  You sure?  What the hell are you both driving?!  I paid £194 for a year.

Because you are living pretty comfortably, you will spend more on these things.
It's great you have your forever home but you have to really push yourself and change habits if you really want to pay off your mortgage quicker.

Thanks you for the podcast link, I do listen to that podcast but wasn't aware of that episode so I'll give it a listen. We did look into NHS treatment but the waiting lists are horrific (I have a friend who waited over a year for her first cycle - pandemic screwed with everything. She's had a terrible time). As I'm late 30s, age is now a factor and each month makes it less likely to work. For that reason, we are going private, and I've chosen the clinic based on knowing people who have had successful live births. The money on the credit card is the payment for our first round of treatment. I wouldn't say I'm lucky, because I don't think anybody who has to undergo fertility treatment is - it's been a very upsetting, difficult and stressful journey, and we haven't even started treatment yet! However, I am deeply grateful to be in a position to be able to pay for it. 

On the entertaining, that is actually also family (my partners family live in Scotland and so we do have to feed them when they visit), plus our friendship groups doesn't tend to go 'out, out' all that much. However, we have been hosting the most recently because we got our new house, and we have space for everyone. I'll start suggesting some other activities, such as nice walks and picnics, and maybe also try to rebalance it a bit so it's not always our place (which it never was in the past, it was always more balanced and I'm sure our friends will be open to that). 

I think my partner would be open to cutting Sky completely, if he can find his rugby via another/cheaper means. He's is South African, and deeply passionate about SA rugby, so he likes to watch all of the domestic games. I think only Sky show these? 

I actually love YNAB, I feel it's easy to use and gives me great control of my money. I've had it for a long time, but I will give thought to whether or not I'd be better off with just a spreadsheet. I will say budgeting is a sort of comfort blanket for me. 

I get my hair done 3 times a year and it's cut and highlights. It's sometimes £100, sometimes £120 depending on full/half head. It is a lot, but it's not expensive for around here from the research I've done. My partners gets his done at work. 

I'll take a look at glasses online. I forgot about that. My dentist is £42 a month. I wasn't able to get an NHS dentist when I moved here 10 years ago, and this covers 2 dentist appointments and 4 hygienist appointments per year, plus discount on any treatments. 

£531 on car insurance is per year, not per month!! I have a Juke, he has a Golf. Both are 6 years old. He has no plans to replace his any time soon. I'm considering what to do. When I bought my car, I was doing 400 miles a week for work and we were planning to move closer to my office. I couldn't afford an electric car and also had range anxiety, so I bought a diesel. Was perfect for those circumstances. Now I mostly work from home and drive it locally about 2-3 times per week. I visit my mum an hour away twice a month, and do the 400 miles about once every 2-3 months, so I'm thinking maybe I should get a different car? I don't want car payments though, so it would have to be a cost neutral switch. I've no idea what kind of car to get for our new circumstances though. 

shellstar

South_coast said:

Hello 😀! I think the car insurance amount might be a typo (hope, anyway 😳). £30 a month on haircuts seems OK to me, mine are more than that....

Well done on everything you have achieved so far. You've really turned your life around from your childhood and put yourself into a strong position for the future. Good luck with all your plans x

Yes, definitely a typo! That's per year on the car insurance! 

Thank you. I know I am very blessed and don't take it for granted. Never quite shake the feeling it can all disappear (because, frankly, it can) but I think getting the mortgage down will help me feel a lot less vulnerable to circumstances changing. 

killerpeaty

I'm not sure it's that safe to save your EF into shares, if you do have an emergency you would need to get the cash out quickly. Sometimes this is not possible with shares. Additionally if your shares have fallen then you are crystallising your losses.

Can Now TV cover the sports? I'm not sure, just asking.

As for entertaining, ask your friends to bring pot luck! No issues at all! Most reasonable people recognise that hosting costs money.

powerspowers

Hi shellster 
You’ve got a good income but a few competing priorities - I understand your logic for putting IVF costs first. What is your second priority- renovating or mortgage? Or what split would you give them- 80/20 50/50? How urgent are the renovations, can you plod through them doing a bit a year or are they more pressing things that would benefit from doing sooner.  Try to work out what your priorities are and let your budget come from that. 

A few other things to ponder- what impact on your finances will having a child have? Now is possibly the time to be chucking as much as possible into the renovations or the mortgage if you’re ability to save is going to hopefully be squeezed in future. 

shellstar

killerpeaty said:

I'm not sure it's that safe to save your EF into shares, if you do have an emergency you would need to get the cash out quickly. Sometimes this is not possible with shares. Additionally if your shares have fallen then you are crystallising your losses.

Can Now TV cover the sports? I'm not sure, just asking.

As for entertaining, ask your friends to bring pot luck! No issues at all! Most reasonable people recognise that hosting costs money.

I've definitely thought about whether or not the emergency fund should be in the shares, especially given that at the moment, the shares are struggling a little. I guess at the moment, give our current savings it's more of a nest egg, and if there really was an emergency I'd cover from the instant access accounts we have. If/when those savings get spent I probably need to re-evaluate that and consider moving some funds out to be more accessible. 

Good idea on the pot luck. I'm an ok cook but some of our friends are much better than me! I'll look into whether or not Now TV will give him the matches he likes. One of his friends has an illegal route in but I feel very funny about that and have vetoed the idea. 

shellstar

powerspowers said:

Hi shellster 
You’ve got a good income but a few competing priorities - I understand your logic for putting IVF costs first. What is your second priority- renovating or mortgage? Or what split would you give them- 80/20 50/50? How urgent are the renovations, can you plod through them doing a bit a year or are they more pressing things that would benefit from doing sooner.  Try to work out what your priorities are and let your budget come from that. 

A few other things to ponder- what impact on your finances will having a child have? Now is possibly the time to be chucking as much as possible into the renovations or the mortgage if you’re ability to save is going to hopefully be squeezed in future. 

Hi think you are right powerspowers. It is a tricky one, but in the main, although the house is tired, most of it we can live with for now. We were talking about this on the phone last night. We're halfway through renovating the loft conversion (2 impractically small bedrooms and a tiny shower room, into a master bedroom with ensuite and dressing area). It's taking us a lot longer than we thought, due to deployments and having real trouble getting people to quote, or provide reasonable quotes (got quoted £7,700 to replace 3 existing velux windows!!! Have managed to get a competing quote at £5,200 but it's still a lot!). So that is definitely a priority to finish, and if we have to live with slightly dodgy windows for a while we can. 

Next is the kitchen, which is pretty bad but the only bit I absolutely can't live with is the cooker. The previous owner kindly left her free standing cooker for us, but it doesn't perform well. Christmas dinner was 3 hours late because it's tiny and cooks so slowly. I've been fantasising about a lovely big range oven in a shiny new kitchen, but actually if we spent maybe £250-£300 on a new electric free standing oven, I could live with the kitchen as is for a lot longer and give us more time to save.  

I think our savings will definitely be squeezed in the future, what with childcare, baby things etc - although plus side of most of yours friends having their kids first is that there should be lots of hand-me-downs. My partner has a career extension but we don't want him to have to stay in the full 5 years and be away so much when we have a young family. That means in all likelihood, his income will significantly reduce within a year or two of us having a child, and just a year or two before we re-mortgage. He will have his pension, a lump sum of about £45k and he plans to start his own business, but that will take time to build and in reality is unlikely to earn him the same as he gets now. It's tricky to balance, but after IVF, it probably does have to be the mortgage that we get down whilst we have more money. Then hopefully that will make things easier later on. I could try to earn more as well, which is possible longer term, but obvs if you're planning a baby you can't start looking around and give up the maternity pay etc. 

So I think that means once the loft is done, we should pivot to paying off the mortgage. Thanks - that question really helped us decide where to focus. 

powerspowers

Glad it helped!! We’re chipping away at renovating slowly and prioritising the mortgage. I sometimes second guess that plan but we’ll get there!! Good luck with it all 

L9XSS

For me prioritise the Mortgage first. I’ve put off spending money on my home albeit the bits I can do myself. Once the mortgage is gone the. I will be using the “mortgage payment” to start prioritising the house. It doesn’t need much just a refresh in areas.