Mortgage free wannabe - that's me!

Westie_Fan_123

Long time lurker here - I've been an avid reader of this forum since I bought my house in 2017, but as I'm feeling rather contemplative ahead of the new year, I thought it would be a great time to set down in writing my goals and plans for paying off my mortgage in the next 10 years (or sooner if possible).  I plan to update this diary regularly as one of my targets is to reduce all of the little spends that actually add up to a lot over the course of a month/year and so writing stuff down might help me to be more accountable and make better decisions.

I bought my house 5 years ago, I purchased it from family at a discounted price, so my mortgage isn't large - currently sitting at £77,508.  I remortgaged early last December (10 months early, paying a small ERC of £700) as I was concerned about rates going up - this was the best decision ever, as I fixed at 1.33% (down from 3.09% on my initial mortgage) for 5 years, so I have the security of a relatively low monthly payment of £316.

I'd like the mortgage paid off by the time I'm 50 and significantly knocked down by the time I need to remortgage in 2026.  I've always OP by setting my direct debit to be higher than the mortgage payment, but since the savings rates have improved, I'm saving in regular savers instead.  I'm not sure whether I will just keep hold of the savings when they mature or whether I will make a lump sum OP yearly, will have to think on that. 

But with this diary I want to focus on making very small OPs by minimising silly little spends, mainly revolving around food and drink/how I spend the discretionary money I allow myself each month, which does get frittered away.  I have some health problems (overweight, diabetic) that a Greggs habit does not help!  It generally occurs when I travel for business, I WFH most of the time but when I do have to go into work, I console myself with many meal deals and Caffe Neros (and the odd Greggs)! Which is really bad for my diet and my purse.  Me and my partner also have a habit of eating out a lot, we don't really socialise much or have expensive hobbies (other than our Westie dog) so we do justify it as being our only real luxury, but sometimes it's just not VFM.  For example, yesterday we shared a kebab and chips (I know!) that cost £10.30, the chicken was really dry and it wasn't all that nice.  I probably would have enjoyed a jacket potato from the freezer more.  So I intend to be more mindful about eating out, having said that, I'm meeting a friend for a curry tonight, the in-laws are taking us out for a meal on Friday (their treat), plus me and my partner are going out for a meal on NYE, so maybe this part can wait until 2023!

I just want to take stock with my current financial position:

Savings/pots - ie all the money I have in the world
£3650 in S&S ISA (long-term mortgage savings)
£8850 in Premium Bonds (emergency funds)
£165 water bill pot (payments in Apr and Oct, approx £175 per bill)
£450 in gas and electric buffer pot (we have a pre-payment meter, we put £60 on the meter each month, currently getting gov't help of 67, also have been putting aside £60 per month for the last few months, I'm expecting this buffer to be eroded when it gets colder in Jan and Feb, but it's at a good healthy level for the moment).
£1200 First Direct RS (putting in £300 per month @7%) - mortgage OP savings 
£800 Nationwide RS (putting in £200 per month @4%) - mortgage OP savings 
£214 in LISA (I need to be chipping bits of money into here)
£718 in Marcus - this is my annual bills pot - rather depleted atm as just paid for Xmas, car insurance, car tax - need to build this up.  Have OH birthday in Feb and car servicing and MOT in March.


Will do a SOA in next post!
 

Westie_Fan_123

As promised, here's my SOA.  It's an accurate reflection of where my money goes.

Household Information[/b]

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

Number of children in household......... 0

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 3125

Partners monthly income after tax....... 0

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

Other income............................ 0[b]

Total monthly income.................... 3125[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 316

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

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

Management charge (leasehold property).. 0

Council tax............................. 134

Electricity............................. 100

Gas..................................... 100

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

Water rates............................. 35

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

Mobile phone............................ 26.82 [x 2 people, am going to get the more expensive contract a bit cheaper)

TV Licence.............................. 26.74

Satellite/Cable TV...................... 68.5

Internet Services....................... 0

Groceries etc. ......................... 350

Clothing................................ 0 [comes out of my 'entertainment' pot]

Petrol/diesel........................... 40

Road tax................................ 0 [see notes below for car costs]

Car Insurance........................... 0

Car maintenance (including MOT)......... 0

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

Other travel............................ 17

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

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

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 100

Buildings insurance..................... 11

Contents insurance...................... 0

Life assurance ......................... 0

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

Presents (birthday, christmas etc)...... 0 [see notes below for car costs]

Haircuts................................ 0

Entertainment........................... 429 [sounds high but is spends for 2 people, covers all eating out, clothes, toiletries, days out, small stuff for the home, netflix, disneyplus, readly etc - however see below for how I want to reduce silly spends in this category)

Holiday................................. 0 [see notes below for car costs]

Emergency fund.......................... 0 [see notes below for car costs]

iCloud and Ink.......................... 7

Charity ................................ 15

Window cleaner.......................... 10[b]

Total monthly expenses.................. 1786.06[/b]

[b]

Assets[/b]

Cash.................................... 12400

House value (Gross)..................... 175000

Shares and bonds........................ 3500

Car(s).................................. 9000

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

Total Assets............................ 199900[/b]

[b]

Secured & HP Debts[/b]

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

Mortgage...................... 77508....(316)......1.33[b]

Total secured & HP debts...... 77508.....-.........-   [/b]

[b]Unsecured Debts[/b]

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

Credit card....................1466......75........0[b]

Total unsecured debts..........1466......75........-  [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 3,125

Expenses (including HP & secured debts). 1,786.06

Available for debt repayments........... 1,338.94

Monthly UNsecured debt repayments....... 75[b]

Amount left after debt repayments....... 1,263.94[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 199,900

Total HP & Secured debt................. -77,508

Total Unsecured debt.................... -1,466[b]

Net Assets.............................. 120,926[/b]


Amount left after debt repayments....... 1,263.94[/b]
How this is allocated per month - all into savings:

S&S ISA - £150
Regular savers - £500
Annual bills (car costs,  xmas, holidays@ x2 per year, 1800 for both, any immediate needs for cash e.g to replace white goods) - £500
Emergency fund (PBs) - £144

Goals

Boost annual bills pot
I want to get a new zero of £1500, I do have some big spends coming up in Feb/March with birthdays and MOT/service, and then holiday deposits, but by August I'd like to have at least £3k in there.

Entertainment........................... 429
This is the category with the most wriggle room.  It covers all the little everyday spends but these are the ones that I am going to focus on minimising (especially food related).  I think I can save at least £50 per month this way...this could be used to really make a dent in the credit card.  

I leave this money in my main bank account but thinking now that I should move it into a separate account so that I can see exactly how much I have, reduce it by £50, pay this off the credit card, and then when the money's gone, it's gone.  Credit card 0% runs out in August so I need it gone by then.  If I pay 125 off each month from Jan, I'll have 591 left to pay in August, I can then use my annual bills pot to pay it off complete.  This feels like a plan.  I just need to find a bank account to pay my spends into - I have Monzo (and love it) but I already use that for the grocery spends.  I know if you upgrade you can spend out of specific pots - does anyone know if this is worth the £5pm fee?


Today, I need to get a bulb replaced on my car, but have xmas money to put into bank (£130).  Spent £30 on dinner last night, I did only have one drink, and showed great restraint by not having a second - £6 saved.  Also have a M&S giftcard with £20 on that can use for any yellow sticker items that look nice

Also have two parcels to send - £3 made on V*nted - it all helps Have listed some nicer items today so hopefully they will get picked up soon.  Am recycling packaging materials (OH hoards them luckily) to maximise profits

Westie_Fan_123

Happy new year!  Hoping for a prosperous new year for us all.  Finally released my Dec wages - I was paid far too early, on 16 Dec (usual paydate is the 27th) so I tucked it away in a separate account. Luckily I didn't need to dip into it early for anything.  I've now done the Jan money shuffle:

• £250 in Monzo pot for everyday spends - I'm determined not to exceed this amount.  Looked into upgrading to Monzo Plus so I can spend out of this pot but it's not worth the £5pm for this facility.  The main pot has our grocery spends and this is where all spends will be debited from, so when I do spend I will need to transfer the money back into this pot.
• Paid £66.25 off the credit card, bringing the amount down to 1400.  Another 75 will come off this month due to the direct debit.
• Paid xmas money into the bank - I miscounted, it was actually 150 not 130.  Thank you PILs.
• Received £20 signing up bonus for first direct.  Forgot about this completely so it was a pleasant surprise!  Left in in FD for now
• Transferred £350 into my annual bills pot
• Transferred £300 into FD for the reg saver
• Transferred £200 into Nationwide for the reg saver
• Bought £300 worth of premium bonds

With the £150 direct debit I pay into my S&S ISA, I have saved £950 this month - I don't count the annual bills pot as this can be dipped into, I try not too but it's there if I need it for any unanticipated spends.

I've had a couple of little wins - made £7 selling on FBM*arketpl*ce, have made £15 on Vinted.  We are putting this cash aside, not sure what for yet, though!

Back at work tomorrow, not dreading it exactly but I know it's going to be a full-on year with a lot of large projects to bring to completion, so making the most of the peace while I can!  Although I will do a few hours work this afternoon/this evening while the OH watches football so that I can get a jump on a couple of things that are hanging over my head a little.  It's going to be really hard to wake up at 7am, didnt wake up until 8:40am and am I still in bed!!  Need to find my get up and go.

Off to town when OH is back from his run in a bit, need to get some food in for the week, plus car still needs light fixing, and I need to buy and top up the AdBlu so need a plastic funnel from Wilkos (plus the AdBlue from Aldi), also need some other random items like interdental brushes.  Must make a list!!

Westie_Fan_123

Just thinking about my savings and OP the mortgage.  At the moment I am being taxed extra.  I moved jobs in May and went from being a basic rate taxpayer to a higher rate.  Then, my old employer (who I left on 2 May) erroneously paid me at the end of May.  I have told them about this 3 times and asked them how I should repay the money, but I have heard nothing.  My pension for that employment states that I left on 31 May so I suspect the company has written off the amount, which is ridiculous. Because the extra month's salary has increased my salary even more, HMRC have adjusted my tax code to recoup the additional tax due, which is OK, but then if my old company then asks for the money back, I hope they will be equally as efficient as to repay the overdue tax!  I've kept the money aside just in case.

anyway, all this to say that from April 2023 I should receive my true salary, plus we have been told at work that we are going to receive a 6% pay increase.  This should take my salary to around £3280pm.  At the moment I am living off £3000.  I'm very tempted to OP the mortgage by £250pm, i don't feel like I would miss this money.  A bit torn as it's easy to beat my mortgage rate via savings interest, but I do like the feeling of seeing my mortgage amount come down and as i'm only paying 1.33% (around £88pm interest) it would really knock it down quickly.  I think i'm talking myself into this route...

Westie_Fan_123

Mid-month money musings...
Just checking in with where I am mid-month.  

The good...
Won £25 on premium bonds, first win for a while - reinvested.
Made another tenner on Vinted, parcels posted today.
Submitted an expenses claim for £66, hopefully this will be paid in Feb, if not, Jan's pay.

Food budget - £135 left, this should see us through to payday (27th - 12 days time) if we eat simply and don't eat out.  
Water bill pot - healthy at £165
Gas and electricity bill buffer - £450.  We are on a prepayment meter (never bothered to swop to DD as we like the control and we've always been v frugal and careful with energy so the difference between being billed and being on a prepayment meter has been minimal - literally pounds per year.  I've checked this is still the case every year).  We're currently putting aside £60 into the pot, putting £60 on the meter, this has been topped with the government's £67.  With the cold snap coming I think we will need to take some from the buffer as it's already running low.  How people on low incomes cope, I don't know.  It's awful.

The bad
Spending money left for this month - not doing brilliantly here, bought a new dress (£32), paid for breakfast for me and a friend, various coffees and lunches out means that I have the grant total of £23 left to last until Jan from the money I set aside - oops.  I did pay for Ddog's food - £90 but this feeds him for 90 days, £1 a day for high quality food that keeps him in great condition (such white silky fur!) is well worth it.  Pup also has enough of his anxiety meds to last until payday.

I'm working in London one day next week and one day the week after next, train travel is paid for upfront by company but I don't claim for tube travel which comes to about £5 per day, so that is £10 I need to find.  Plus I need to visit the branch in the city next to mine, I buy a flexi-pass that saves me a bit of cash and it has one ticket left on it, luckily.  I will try not to visit this centre again before payday but in Jan's pay I will need to cough up for another one, which is annoying.

Bought car insurance, is it me or have premiums shot up!  Couldn't get insurance for less than £550 (this did include breakdown cover).  But, it's paid for now out of the pot I saved so although it didn't cause any financial distress it was still painful.

The ugly
Work have changed their private healthcare provider so we will lose all the lovely benefits we had with the previous supplier.  We're all gutted, as a lot of us entered into a scheme where we bought Apple Watches for £37 and then could basically get it for free if we did enough exercise.  It was really effective as we all got competitive about who did the most steps.  Now we all have to pay £9.50 per month for 36 months!  I wouldn't mind. but I had a perfectly good watch already that I gave away to a friend so didn't even need this one.  Plus I really loved the other benefits - free Amazon Prime, cinema tickets, Caffe Nero, I'm gutted.  It actually saved me a lot of money and felt like a real treat.  

Planning for Feb
Partner's 40th birthday - he's having cash to put towards a new TV, plus I've booked the day off work and we're going to go out for a coffee and then go to this local independent burger place that he really likes.  I've already got a birthday card but I really need to think of some small treats to make a bit of a fuss of him.  He's not really into having a fuss made, he's lowkey and low maintenance, and would not be bothered if I didn't do anything else, but I would like to get him some treats.  The problem is he's a really particular person and not easy to surprise.  I bought him an oversized mug with runners on (he's a really good runner and runs races) from Sainsbury's for Xmas - it was only £3.50 but it was perfect, and was really smug with myself, until he came home from shopping the week after with the same mug!  I just can't win.  If anyone can recommend some small treats for a 40 year old man, who likes football and running and westies, please let me know as I am soo rubbish with presents.  He does support a certain football team so maybe I will look on their website.

March - car needs to be MOT'd and serviced, my car is in good condition but I'm always a bit on edge.  Need £750 set aside just in case.  
Also March - work trip abroad to a European capital city, I love travelling for work abroad and enjoy the company of my colleagues so this will be hard work but fun.  We can tweak the flight times back to have an extra night or two in the city over the weekend, just need to find ££ for the hotel room and spending, e.g. city tours.  Maybe £300-400?

Need to think about: holiday for this year. We only holiday in the UK with Ddog, we wouldn't put him in kennels as a) my OH and the dog cannot bear to be separated and b) the dog has anxiety and needs careful handling so kennels probably wouldn't have him anyway.  It's OK though as I go away with work abroad fairly often and I love holidaying in the UK.  We just need to decide where to go and when to go, it's usually the south coast.  Something to plan for and look forward to!