Where to focus - mortgage, renovations etc?

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  • shellstar
    shellstar Posts: 144 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    Egg transfer was yesterday so fingers crossed. Just need to keep busy (but not exert or stress myself), drink fluids and take the drugs! I'm very aware that the chances of it working first time are low. From 9 eggs, 7 fertilised, 1 transferred and 3 are in the freezer, which is very good for my age. Just need to try and not think about it now.

    I got my bonus from work on Friday. I got this because for the last year I've been helping support the sale of the company I work for, and was incentivised with this bonus to stay. I thought I was going to get made redundant at the end, but by a miracle that hasn't happened (have received assurances) so that is a big relief. 

    So, what to do with it. We're going on holiday so that will give us the spending money. We also need a new oven, as ours is terrible and we've agreed to put off getting a new kitchen for 3-4 years. 

    That leaves me with a whopping £22k! I'm not likely to ever get such a sum again, so I am finding it a little overwhelming what to do with it. The options for the rest are:
    Pay off some of the credit card. This is 0% until January 2024 and has the fertility treatment on it. It's currently at £9,747 and although I'm sure the advice is to leave it and keep paying it off, it is over £500 to stay on track, so I was thinking of putting £4k-£5k on the credit card to reduce the payments needed each month. 

    Renovation pot: Our pot is quite depleted now with some bits still to do,  so with the 60/40 rule of the remaining I thought about putting around £6k-£7k into the renovation pot.

    This would leave around £10k to go on the mortgage, which would bring us under the £400k level. I'm struggling to decide if this is a sensible plan. Should I put more on the mortgage? But then the money is gone, so should it be less. I still have £10k emergency fund, but it's such a lot of money and so hard to come by that it does feel risky to sink it all in the mortgage. But we do want to reduce the mortgage! Is this a common conundrum?  Have others experienced this sort of anxiety? 
  • savingholmes
    savingholmes Posts: 27,355 Forumite
    Name Dropper First Anniversary Photogenic First Post
    I personally would put some of it into a guaranteed savings rate e.g. regular saver or pensions which is likely to give you a better return than paying off 0% or low mortgage interest rates. You need to do what helps you sleep best at night. If that's security go for that. Have you got a decent EF? I think the one thing we've all learned from the last few years is how much maintaining an EF and decent cashflow can help if things get sticky.
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £12.3K
    3) CC £4.9K on 0% spends card but offset by £34.1K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value at 15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • shellstar
    shellstar Posts: 144 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    @savingholmes yes, I was wondering if it made more sense to put it into savings, but the rates are mostly not yet higher than the mortgage rate. Mortgage rate is 2.69%. The best savings rate I can find it 3.1% (all others are lower than mortgage rate) if I lock it away for two years, but is 3.1% on £10k better than knocking £10k off a £400k mortgage at 2.69%? I am assuming not? 

    I think you are right that it's about comfort. I have an ok emergency fund I think. It's £10k and I add £200 to it each month. There is something stressful about not keeping that money as cash though and paying it off the mortgage, which I didn't quite anticipate. My partner always over paid his previous mortgage, but I was never in a position to (I only recently started to do as well as I am, and when you're coming from behind it takes longer to feel the benefit of good fortune). So I guess for me it's a very new position, and part of me feels a bit like I want to hang onto the money 'just in case'. 

    OH is back at the weekend so I'll chat to him about what is best. I suspect he'll say to pay off the mortgage, as he definitely feels stressed about that! 
  • LadyWithAPlan
    LadyWithAPlan Posts: 2,193 Forumite
    First Post First Anniversary Name Dropper
    I would think in terms of percentages for your bonus cash.
    Eg a split of say  50% mortgage, 10% spends such as holiday cash and new oven as that sounds like a priority,  20% off credit card and then pop rest 20%  in an accessible interest earning EF.
    I think % are easier to make decisions with. 

    I also wouldn't have my EF in shares as there is a reluctance to sell when markets are down as they are. 

    Have you looked at those instant pot cookers - the 11 in 1 or 14 in 1? I have had one for a few months now and it has changed my cooking, what with the pressure cooker and also I get my halogen cooker out. I only seem to be using my oven for the hob now.

    Good luck with your fertility, it definitely sounds like that is a better use of your cash  than a home renovation right now! 
    There will always be a (beautiful stilettoed) foot in fabulous in LaPlan's life.
    I am choosing to be fabulously frugal to support some wonderful life changing and affirming financial goals including buying a London home I love.

    DON'T BUY STUFF (from Frugalwoods)
    No seriously, just don’t buy things. 99% of our success with our savings rate is attributed to the fact that we don’t buy things. You can’t really hack your way to frugal. You can and should take advantage of discounts, coupons, rewards points, and the like. But at the end of the day, the only way to truly save money is to not buy stuff.    Money doesn’t walk out of your wallet on its own accord.

    My March  streaks to track
    Track Minimalist game  items (Nov 310)   (Dec  95)  (Jan 90)   Feb 50
    Exercise streak  
    YNAB days:: Target 50 days -Age of money 29
    Track my NSD's - Target 13 days/ 0/13

    https://forums.moneysavingexpert.com/discussion/6289577/future-proofing-my-life-deposit-saving-then-mfw-journey-in-under-13-years#latest
  • shellstar
    shellstar Posts: 144 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    Thanks @LadyWithAPlan, I found % a useful way to consider how to make best use of the funds. A couple of people now have suggested the emergency fund shouldn't be in my stocks and shares ISA. Obvs, I can't shift that money out, so instead I've decided to consider that as just long-term investment, with no immediate plan for the funds. This does mean I need to start a new emergency pot, so I've instead decided I will:

    - Use 10% on the holiday, oven and other minor incidentals it's useful to use these funds to cover, like my car insurance bill that just landed. 
    - Put £5k aside for renovations. This should cover the remainder of what is needed in the loft, and start us off on saving for the kitchen. 
    - put £10k into the mortgage - this brings the mortgage down to circa £399k (from £420k when we took it on 11 months ago) - it's very satisfying to get it below £400k within the first year. This, and the regular £120 over payment mean we've knocked 3 years off the mortgage already. Whoop Whoop! 
    - put £6k into a new emergency fund. I think this is sensible, because if the IVF does work, then we may need these funds to be more accessible than they currently are. 

    I've paid nothing off the credit card, as its 0% and as much as I hate having to make regular payments, at present I can manage what is needed to pay it off in time. 

    In the near term, I'll focus on building up the emergency fund again and growing an IVF/baby fund so no more needs to go on credit cards. House wise, once the loft is done (will it ever be done??!) there are no major DIY plans beyond maybe painting and decorating rooms as and when we have time/want to, so that can take a back seat for a little while. We aim to use any future bonusses to pay off the mortgage. 

    Feels a bit odd to have a chunk of money in the stocks and shares ISA that I have no plans for, especially when we are saving for things/have debt on credit card and the mortgage. I guess at some point it will grow to a size over time and there will be something large that it makes sense to use those funds for?
  • savingholmes
    savingholmes Posts: 27,355 Forumite
    Name Dropper First Anniversary Photogenic First Post
    That all sounds very logical to me
     Fantastic progress in a short time 
    Achieve FIRE/Mortgage Neutrality by mid 2030
    1) MFW Nov 21 £201,999 with 237 payments to go - now £184,341 Equity 26.26%
    2) Spend on handyman & external building works & new patio door £12.3K
    3) CC £4.9K on 0% spends card but offset by £34.1K savings (part EF, part future home improvement)
    4) Mortgage neutral by June 2030 AVC £9.6K/£127.5K AVC target 7.5% value at 15/4
    5) FI Age 60 annual income target £13.7/30K 45.7%
  • Oh best of luck with the IVF, that sounds positive but I can totally understand the need to be reserved with that area, I will keep everything crossed for you! 

    That sounds like a very sensible plan for the money, and wow what an amazing bonus, you are clearly an integral part to your job and well done for supporting them so well, it is the least you deserve!
  • LadyWithAPlan
    LadyWithAPlan Posts: 2,193 Forumite
    First Post First Anniversary Name Dropper
    Your plan sounds very logical and the idea of a new EF makes perfect sense.

    Plus you can now save for your IVF/baby  as you go.

    I guess you can just put the CC as a budget line item and treat it as such -my CC I only got for a credit score but somehow I use it for the credit score and when I pay it off at the end of each month I am always horrified at how much it has grown. So next week I will pay it down and allow its use only for travel so I can show I'm good with debt..

    Below £400k is amazing and 3 years off wow! - I think my mortgage will have to be about £400k  (saving for larger deposit) and its making me feel ill - the £22.40/day daily interest in particular scares me  especially as its just me

    Maybe treat the S&S ISA as part of your future pension OR  maybe when the market goes up (as it will eventually) you could use it to make a bulk payment on your next remortgage to get a better LTV and rates etc. Selling it now will hurt too much.
    There will always be a (beautiful stilettoed) foot in fabulous in LaPlan's life.
    I am choosing to be fabulously frugal to support some wonderful life changing and affirming financial goals including buying a London home I love.

    DON'T BUY STUFF (from Frugalwoods)
    No seriously, just don’t buy things. 99% of our success with our savings rate is attributed to the fact that we don’t buy things. You can’t really hack your way to frugal. You can and should take advantage of discounts, coupons, rewards points, and the like. But at the end of the day, the only way to truly save money is to not buy stuff.    Money doesn’t walk out of your wallet on its own accord.

    My March  streaks to track
    Track Minimalist game  items (Nov 310)   (Dec  95)  (Jan 90)   Feb 50
    Exercise streak  
    YNAB days:: Target 50 days -Age of money 29
    Track my NSD's - Target 13 days/ 0/13

    https://forums.moneysavingexpert.com/discussion/6289577/future-proofing-my-life-deposit-saving-then-mfw-journey-in-under-13-years#latest
  • South_coast
    South_coast Posts: 4,916 Forumite
    First Anniversary First Post Name Dropper Photogenic
    I was going to suggest you could withdraw from the S&S once it's in the green, too. It doesn't have to stay tied up indefinitely if you don't want it to and have more relevant ideas for the cash
    Mortgage start: £65,495 (March 2016)
    Cleared 🧚‍♀️🧚‍♀️🧚‍♀️!!! In 5 years, 1 month and 29 days
    Total amount repaid: £72,307.03. £1.10 repaid for every £1.00 borrowed

    Finally earning interest instead of paying it!!!
  • shellstar
    shellstar Posts: 144 Forumite
    First Post Name Dropper First Anniversary Combo Breaker
    So, first transfer failed, but we do have 3 more embryos in the freezer now so I'm remaining positive. I think they said the average is 3 attempts before it works. There were signs it hadn't worked before I did the test so I think I was well prepared mentally. I took a package (after much research) and future transfers are included, so at the moment, I won't have any further costs except for medications, which aren't exorbitant in the scheme of all the costs involved to date. Apparently we can try again next month, so that's exciting, though September is mental work wise, so I'm just checking I can make all appointment dates alongside all the travel I'm going to be doing. Luckily it's all UK based.

    This did mean I was able to enjoy a cocktail or two on our holiday to Marrakech, which we're just back from. It was darned hot, let me tell you. Hotter than here, but we lucked out on the fanciest hotel I've ever stayed in and I did enjoy the air con (sorry planet). We managed to stay in budget and the fancy hotel was at a greatly reduced rate because it was out of season. 

    OHs mum and step dad kindly agreed to house and dog sit whilst we were away, and we've come back to all sorts of jobs having been done. We're now sleeping in our new loft master suite, although there is still lots to do and it's still a bit of a mess (which will take a while, as we're waiting on supplies with the now usual problems in logistics). However, they did tons of small jobs for us, like sealing the shower area, painting and hanging the en-suite door. We're taking them for dinner tonight to say thank you. 3 more weeks until OH deploys until mid-December so we will save lots of money whilst he is away on food and fuel, plus he gets deployment pay which is always handy.

    On the money side, I was listening to the This is Money podcast (a recent find, but I'm really enjoying it). They talked about all the tiny investments people make that sit doing nothing meaningful. I did a review and yes, I have several in my stocks and shares ISA, so I sold those (most were at what I paid for them luckily) and have reinvested to beef up better performing funds, as well as buying a larger amount of shares for two companies I was tracking. It's already doing a little better so that's nice. 
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