What's some personal finance goals after you've bought a house?

madlyn

Savingforahouse123 said

Thank you. It's hard to pinpoint why I've been so disciplined (I'd say coming close to an obsession to save in all honesty) but I think it's down to multiple things:
1. My parents do live a very low thrills life. Their weekends entail going on walks or maybe going for runs (both low cost activities). I guess this has rubbed off onto me as I'm not materialistic and pretty low maintenance.
2. When I'm bored or have spare time, I think how can I make additional money. This went from a habit to being ingrained in my lifestyle. Probably related to my ADHD as I weirdly get a buzz out of saving (probably the low dopamine my brain is craving).
3. Insecurities - I know I'll never have a high salary but still have the determination to be wealthy in the future, so in order for me to do that I have to cut my spending to ensure I save as much as other people. I know I shouldn't compare to others but my group of friends are high earners and we don't discuss salaries so in order for me to have a similar net worth to them, I would need to cut spending more. I know this is bad but I'm being honest.

I get a buzz out of saving too, although I have not saved the amount you have.
But remember being wealthy is not just measured in money.

london21

Having financials goals are great. I am 32 and also home owner.

Important to do what you enjoy, sometimes travel, go for that spa, balance is key.

Career progression is good but that’s just one aspect of your life. Live a balanced fulfilled life.

When the mortgage is paid off then what, your mortgage is very small so you are already ahead.

theoretica

You don't mention a house maintenance fund - the boiler/kitchen/roof/paint/fridge/washer won't last forever and you want to be financially prepared for whenever they need attention - not having put every penny into paying off the mortgage.

artyboy

Just to add my own 'well done' to the OP - at 28 I was in quite significant debt despite having a good job. And I had no plan... it was pure luck that it was around then I met the future Mrs Arty - things could have been very different! 

So to have it worked out as well as you have is great and hopefully you'll have a very early retirement (assuming you still want that down the line...) 

Savingforahouse123

[Deleted User] said:

Savingforahouse123 said:

I think my plan is:
1. Short term (0-5 years) - Overpay my mortgage to get it paid off 
2. Medium term (2-8 years) - Then invest either into my pension or into stocks
3. Long term (4-8 years) - Consider a second property either as a BTL or a house in another country with a different climate (I could always rent this out when not living there too)

I would switch 2 & 1. That 20k mortgage you will be overpaying in the next 5 years could instead be invested in the market and benefit from longterm compound interest. Why are you eager to get the mortgage paid off quickly? What is the interest rate?

Either way, you are in a great financial position at your age. You probably can't make a bad decision (other than buying a luxury car).

I was having this debate when it came to getting my mortgage. I could either put down a huge deposit and have a small mortgage, or I could've chosen a small deposit and have a large mortgage (meaning with the money I had the leftover from not putting much down on the deposit, I could use that money to invest in stocks). I had to rush to make a decision as the bank of England was raising interest rates and I wasn't confident which option I should choose, but in the end I chose the former (large deposit & small mortgage). To this day I still don't know if it's the right decision. My mortgage interest rate is 2.79% fixed for 5 years.

Savingforahouse123

london21 said:

Having financials goals are great. I am 32 and also home owner.

Important to do what you enjoy, sometimes travel, go for that spa, balance is key.

Career progression is good but that’s just one aspect of your life. Live a balanced fulfilled life.

When the mortgage is paid off then what, your mortgage is very small so you are already ahead.

Thanks. I'm fortunate to have done a LOT of travelling for someone my age as well.

I'm not bothered by career progression. My current job is low pay but also low stress, with a brilliant work life balance where I'm in full control of my schedule/hours/days I work and I'm not micromanaged at all (it's a very independent job).

"When the mortgage is paid off then what, your mortgage is very small so you are already ahead" - Thanks... That's what I'm trying to establish. I'm trying to work out what my next goals will be

Savingforahouse123

theoretica said:

You don't mention a house maintenance fund - the boiler/kitchen/roof/paint/fridge/washer won't last forever and you want to be financially prepared for whenever they need attention - not having put every penny into paying off the mortgage.

I've got about £11k left over in savings once I've bought the house which I'll keep/maintain in an instant savings account in case I need the money for emergencies / house repairs.

Audaxer

Savingforahouse123 said:

Ebe_Scrooge said:

What an inspiring story!

It depends to a large extent on your priorities, but there's a couple of "sensible" things I would be doing.  First, as MEM62 points out, paying a healthy amount into a pension is eminently sensible.  Retirement seems a long way off at the moment, but it will pay dividends, and should allow you to enjoy a long (hopefully!!) and comfortable retirement, being able to afford holidays, little luxuries, etc.

Secondly, and sort of more immediately, make sure you've got an emergency fund easily available.  With the best will in the world, when you own a house there will be repairs that need doing.  Sod's law says that if your boiler breaks down, it'll do so just as winter sets in.  If you're able to just call out a plumber and pay him to fix it without worrying, it makes a big difference.  Or you might lose some roof tiles or a fence in high winds - it's nice if you're able to get these sorted without having to rely on credit or a loan or whatever.

Aside from that, overpaying the mortgage (assuming you can do so without penalty - you can usually overpay 10% with no penalty) is well worth it.  You'll almost always be paying more interest on any borrowings than what you can earn in savings.

If you're planning on starting a family at some point - don't underestimate how expensive kids are.  Even more so if you want them to have as much fun as possible, join loads of clubs etc. (scouts, guides, sports clubs, dance classes, gymnastics classes, whatever it is that floats their boat).  And if they eventually go on to university, that's yet more expense.

So there are lots of expenses, whether short, medium or long-term that you need to plan for.

But ... there's no point in being financially stable if you can't enjoy yourself a little bit.  So if you're able to mix the "sensible" stuff in with some "fun" stuff, providing it doesn't cost an absolute fortune, then go for it.  It's all about getting the right balance.

Thanks (and thanks MEM62 too).

My employer is contributing the max into my pension. If I pay more into it, my employer won't go any higher. So this makes me think I might as well open my own stocks and shares ISA or invest in Vanguard or something as that's basically doing the same thing as a pension? I'm no expert but from what I've read, index funds/ETFs are good as they're diversified. So I guess my question is, what's the difference between investing in stocks and shares for the long term and investing into a pension as they're both money towards retirement and I think pensions usually consist of money paid into various stocks anyway?

I think my plan is:
1. Short term (0-5 years) - Overpay my mortgage to get it paid off 
2. Medium term (2-8 years) - Then invest either into my pension or into stocks
3. Long term (4-8 years) - Consider a second property either as a BTL or a house in another country with a different climate (I could always rent this out when not living there too)

Even if you can't pay more into your work pension, you could still open a separate SIPP and get 25% tax relief added to all your contributions, provided you don't need access to these funds until your late 50s. For investments you may want to access sooner, definitely use an S&S ISA, but bear in mind the longer your funds are invested the better. Low cost index funds or multi asset funds are probably best to get started for investing either in an S&S ISA or a SIPP. However before making any investment decisions, I would suggest doing some research on this forum and sites like Monevator. 

Well done with what you have already achieved and good luck for the future.

london21

Savingforahouse123 said:

london21 said:

Having financials goals are great. I am 32 and also home owner.

Important to do what you enjoy, sometimes travel, go for that spa, balance is key.

Career progression is good but that’s just one aspect of your life. Live a balanced fulfilled life.

When the mortgage is paid off then what, your mortgage is very small so you are already ahead.

Thanks. I'm fortunate to have done a LOT of travelling for someone my age as well.

I'm not bothered by career progression. My current job is low pay but also low stress, with a brilliant work life balance where I'm in full control of my schedule/hours/days I work and I'm not micromanaged at all (it's a very independent job).

"When the mortgage is paid off then what, your mortgage is very small so you are already ahead" - Thanks... That's what I'm trying to establish. I'm trying to work out what my next goals will be

Personally, will say take a break from goals, you have just achieved one give yourself some time to settle into your new home.

next could be saving and investing into a low-cost tracker funds if you are into investment. 

I personally contribute into my pension, have a direct debit monthly amount I invest in funds, have some savings in my account also.

Eco_Miser

Financial Independence should be your long term goal - you don't need to Retire Early if you don't want to, but it's nice to have the choice.

This means having enough invested so you could stop work, stop saving, and draw from your investments, and still have all your expenditure covered, at least up until you can draw your pension(s), when those can cover your expenditure for the rest of your life (or a mixture of investment returns, pensions, and capital drawdown can).

Meanwhile, inflation is eating away at your mortgage, so don't be in too much of a hurry to pay it off, allow yourself a few treats (how about a nearly-new car - avoid the initial depreciation), and be prepared for emergencies (available credit on a credit card will give you time to cash in investments or give maybe notice on a savings account).