Moving on with things

alt80

End of the week was a bit manic, couple are off on holiday and one off sick so didn't get much chance to think about much other than work at the end of last week. Managed to get some family time this weekend and finally got to the gym. Got the benchmarks I was !!!!!! dreading as I knew I'd lost strength but I do have a starting point now. Next step is to get back into a routine - 3 strength, 3 cardio. Going to start 2 strength, 2 cardio. 

Been thinking on and off about paying off the 0% as quickly as possible or saving the money and paying off the 0% at the end of the term. Big thanks to everyone who's given me a bit of feedback. I discussed it with my wife and the pros too and have decided to pay the debt off. It's not because it's the most mathematically sound thing to do; it make more sense to pay the money into savings but talking it through and having some time to reflect on it, I just want the card balances gone (although good to know these type of accounts usually require a lump sum and need to be looking at the regular savers). It's the psychological aspect; I just want to strikethrough that last card balance and unfortunately, in this instance, the psychological aspect trumps logic. My wife supports my decision even though she understands it's not the 'best' option after I explained it and showed her how both options would work out. At the risk of turning into the !!!!!! Dave Ramsey baby steps diary, the getting out of debt (mortgages aside, ha fml) before saving an emergency fund makes sense. It's odd learning a bit more about him and why he does things the way he does with his background being property and getting once bitten, twice shy before building a proper empire. Although I was much more fortunate, I am aware how close I came taking on !!!!!! stupid risky deals and I won't take that for granted. 

So, sticking with the plan to pay off my 0% by the end of this year, end of October all being well but if it gets pushed to the very end of the year, it wouldn't be the end of the world. Need to start working on those regular savers thereafter to work towards having a fully funded emergency fund.

Too !!!!!! late to respond to everyone individually but thank you all for your responses, gave me a few things to think about for the future and is appreciated.

@enthusiasticsaver one plan is to remortgage on a wholly repayment, 20 year term basis in 2026 when the 1.4% deal comes to an end. Best case scenario would be rates to be closer to 3.5% and a payment of c.£3,250pcm. I'd quite like to think I could own this place outright by the time I'm 65 rather than another 25 year term and making my last payment at 70 which would bring the payment down a little but cost more. It is unlikely the best deals will be on an interest only basis; repayment tends to come with better rates but there's the option to beat the interest with throwing the lot on interest only so idk. It is something I do keep mulling over, really don't know yet and need to think about it. I'd be interested to know what you'd do if you were in my position.

I know I used to go on about clearing the card balances and doubling my mortgage to buy somewhere like the home we've ended up buying, well, back when the rates were low we could have bought more house but tbh it's a big financial commitment. Back then, I didn't give a !!!!!! about getting it paid for, think it was you I made some comment about aiming to have a mortgage until the bitter !!!!!! end. Idk what's wrong with me but I've changed, had to do a lot of taking a long hard !!!!!! look at myself these past few years and it's changed my mind on this; now, it'd mean the world to me to own my home unencumbered some day. 

enthusiasticsaver

I tell you @alt80 it is refreshing to read your posts these days. A few years ago I would have said this guy doesn’t get it and I am banging my head against a brick wall but you definitely get it now. There is a psychological side to clearing debt as well as financial which is why most of us always have this dilemma. Balancing lifestyle against financial acumen and the psychology of paying down debt or accumulating assets. 

I was never fan of Dave Ramsey school of thought of throwing everything at the debt unless the debt is small and short term. Long term penury is tough although I think you have a sensible budget. In your case you seem to be able to work to a budget and I think you need the psychological boost of getting this part of your life over with and a clean slate. I am not sure if you have explored pensions either but in your tax position that would be a no brainer. So getting the cards gone and sorting out a pension would be my first suggestions. 

Once the cards are gone I would convert the mortgage to repayment if affordable. You won’t want that round your neck forever and force you into a position where you have to sell to repay it unless eventually that is your plan. That of course depends on your plans for your business. 

So my plan would be
repay cards
explore pensions

After the cards are gone in about 6-7 months you will have about 1-2 years where I would explore saving opportunities for the £2000 you currently pay towards the debt whether that is ISAs for both you and your wife, regular savers or fixed term. You could make a lump sum reduction to the mortgage in 2026 when the deal is up then convert to 20 year repayment or less depending on how big the lump sum repayment is and payment affordability. 

A lot of investment advisors will tell you to put that £2000 into your pension and let the mortgage tick along and financially it makes more sense but personally in your position I would either do 50/50 after 2026 and start to pay the mortgage down plus invest into a pension or at least get the mortgage fully on to repayment so the balance comes down. Interest rates are unlikely to drop very low again imo. 

RelievedSheff

There is no one size fits all solution when it comes to debt repayment. What suits one person won't suit another. 

For what it is worth I think in your instance repaying the credit card is the best idea. One goal down and another to go.

Really we should be putting the money we overpay on the mortgage into a high interest savings account and paying it off come remortgage time given that our interest rate is quite low. But we prefer to see the mortgage balance drop each month.

alt80

Had a !!!!!! amazing week. One of the best I can remember in many, many years. Back in the gym, wife's birthday, Easter hols, bit of time away from the business and home. Managed to have a great night out without any thoughts at all about going off the path. All accounted for too so no regrets / buyers remorse or whatever you want to call it.

@enthusiasticsaver/@RelievedSheff 

I didn't "get it", I got worse and worse throughout my 30s, I look back now and although I didn't see it at the time, I was consumed by addiction; one thing worse than the rest but it was a whole host of me needing to get some buzz off various things that gave me a short term high. !!!!!! madness. Regarding debt payoff I 100% agree re it being multifaceted, I'd like to think my balance is a lot better.

I 100% can't believe I'm saying this and I'm sure you can't either haha but we are doing really well with the budget. Haven't changed my mind about wanting to get the card balances cleared since I last posted: you're right, I need to get that part of my life over. 

I've got a SSAS pension set up with my commercial unit, paying it down with the incoming rent and an additional £1k per month from the business. My pension bloke is going to work with me to diversify the investments held within it when possible. Currently, it just holds my commercial unit but that is at least off the extortionate mortgage product it was on. Who knows you'll might be !!!!!! proud of me yet mate, ha. 

100% don't want to wind up having to sell my home tbf it wouldn't come to that, worse case, I'd sell some of my residential portfolio and pull the money rather than sell my home at the end of the term. Not ideal, of course, but I spent a long time considering the exit plan from the i/o mortgage; have all my options written down should anything happen to me so my wife could just pay it off rn she certainly wouldn't be in a great position but I've cobbled together enough of a plan that I would like to think in the next few years she could continue with my trading business with staff in place for an income and keep our son in school, sell the resi portfolio in its entirety to clear the i/o part of the mortgage and continue with the SSAS. I'm not in a position to say I'd be able to see her in the position we're in now if something did happen to me but it's something I've thought about a lot and made inroads. I'm paranoid about my health and had some brushes with dark thoughts that have made me think about this probably a lot more than most. It'd break my heart to think she'd be forced to sell our home. She realises how serious it is, that her lifestyle would be impacted upon and she wouldn't necessarily just meet a better prospect in two minutes - her having therapy seems to have put those thoughts to bed. Really I want to get into a position her life and that of our son's would not be at all impacted, for me to just be 100% disposable. 

On a more short term note, I am not making any rushed decisions about 2026 but the options you mention are all on the table.

enthusiasticsaver

I think you are thinking long term now by considering what would happen should anything happen to you given your wife doesn’t earn so I think your plan should the worst happen sounds sensible. Also good that you have the residential portfolio to fall back on and that you have started a pension. 

Glad you had such an amazing week. The weather is picking up down here so I am happy too. 

alt80

@enthusiasticsaver 100%, thank you. Its a strange thing aiming to make yourself 100% disposable and tbh there are times it does my mental health no good but it's the right thing to do. Needing to be needed to turn money probably isn't right either ha.

alt80

Just checking in, nothing to report - next week is when I do the finances. 

Had a great week, !!!!!! manic with work but not allowed it to mess with my other family/gym goals. Been a good weekend too. Got out for drive it day in the old car and I picked Sunday lunch somewhere a lot nicer than my in-laws do, I had become quite fed up of the places they choose and took it upon myself to book it. Food and service was great, despite being local we hadn't been there in ages. In-laws enjoyed it but balked at the bill, I happily pay for quality, they aren't as fussed but it does !!!!!! me off when they are "how much" this, "how much" that when they aren't even paying. 

Kept up with the training including an extra session and started running again. Skipped the first five weeks Couch 2 5k - I was not as 'Couch' as I feared ha. Wife keeps threatening to enter us both into the local half marathon in September, I really !!!!!! hope she is joking but knowing her she won't be.

stymied

Great to hear how well you’re doing @alt80

Please do be careful not to go too far with doing everything (extra training session plus starting running on top of manic week at work is ringing alarm bells for me) so you end up getting run down / starving yourself on a diet again x

RelievedSheff

Sounds like you are finding that happy work life balance.

maggiem

Two amazing weeks on the trot, great news. The Sunday lunch sounds good but I wouldn’t have appreciated comments about how much if I was paying either! How much only becomes applicable if the food is poor, I agree with  paying for good quality. 

Hope it’s 3 amazing weeks in a row.