MeandO's money-shuffling

MeandO

Thank you both x Unfortunately it was one of the owners/managers who did my hair. I did complain but I could see it was getting me nowhere. After that ridiculous amount of time there I just wanted to leave as well tbh. I won’t be going ther again. I may speak to a different salon and see if they can do anything about it but I think I may have to wait a while as it’s just been dyed to within an inch of its life.  

MeandO

Payday has been and gone and I’ve shuffled money around to the various savings pots. I’ve changed the budget a little this month to allow myself a bit of extra wiggle room and also to allow myself a pot for personal spends or saving towards future hair appointments etc (obviously not at the same place). I’m hoping this budget will allow a bit more breathing room although it does mean I’m not sending as much towards the EF. There’s £350 a month being sent to it now instead of £500 which was difficult to sustain. I’m also saving £100 a month into a holiday/school holiday fund. We have no holidays planned as DS will be going abroad with his father next year (I’ll be a nervous wreck for that one) and then DS has a BIG trip abroad with his school the following year (when I’ll be terrified until he’s safely home, no doubt!) but it gives me a pot to dip into for the school holidays and if we do end up booking a little break somewhere. 

I’ve decided to keep paying into that Emergency fund until mid January when the high interest rate ends on that account, at which point I’ll be taking around £5k of it and paying it off the mortgage. From then on I’ll be throwing the £350 a month at the mortgage for the next few years as an overpayment.  My savings of over £6k currently makes me ineligible for UC whereas I’d be entitled to around £60 per month on my income if my savings were under that amount. If I withdraw from the savings now though I will lose 90 days interest which will be about £100. I will have an EF of around £4K then and hopefully the mortgage will disappear rapidly. 

Honeysucklelou2

Sorry to read about your hairdresser experience. 5.5 hours 😵. The £100 school holiday pot sounds a good idea.

MeandO

Thank you HSL2 xx

Sarahwithlove

Seems sensible to use it on the mortgage and just keep a buffer under 6k when you are able to. 

MeandO

Thanks Sarahwithlove. xx

I’ve spent a couple of hours mulling over the savings vs mortgage op’s quandry again tonight as I never know what to do for the best. I know the calculator says to save, but it doesn’t account for the UC payments and also that my currently very low mortgage rate will be up in 2026 and 2027 for two of the three sub accounts. I’ll only be eligible for UC whilst DS is still in full time education too and will be around £300 - £400 a month down on income when that time comes when I account for everything, so savings/OP options will massively disappear then. 

These are the two scenarios I’m currently pondering over….

I’ve saved enough to overpay 10% of the outstanding mortgage in January which is the yearly amount allowed. So I could pay that off, then start stashing £400 a month into the savings again and declare the savings once assets get up to the limit again. I should have enough saved to pay off the10% again the following year then. 

OR… do I just forget the UC and OP’s and keep saving hard for two years when I should have enough to pay off the first sub account that will be up for renewal in October 2026 - around £16K. This second option will probably mean using the whole savings pot though, leaving me with very little left.

Either way, I’ve just sent an overpayment of £78.22 to the mortgage to round it down to £65,000 exactly. 

in_need_of_direction

My view would be that you overpay, claim the uc and start the savings with that. Apart from anything else, if you reduce the outstanding mortgage, it leaves you less impacted if rates rise again.  That said, my view may be coloured by my 15.9% interest rate on my first mortgage.

MeandO

15.9%! Oh my gosh INOD, that terrifies me. I have decided to definitely pay off the 10% in January and then save and hopefully do the same the following year. When I know the child benefit and eligibility for UC is coming to an end I'll probably just keep the cash in a savings account and try and save enough to pay the outstanding balance off. At least that way I have a cushion to reflect the huge drop in income if it's needed. Now I'm impatient for January to come. 

Mrs_Money_Penny

I also agree with INOD I remember 15% interest rates. I was paying £525 for a £44k mortgage. x

MeandO

I don’t know how I’d afford rates like that Mrs_Money_Penny. I have 3 sub accounts on my mortgage and I’m very grateful that they’re at 1.79%, 2.19% and 2.29% at the moment it I can’t see the rates going back down to that anytime soon which is why I want to reduce this mortgage before the fixed period is up!