Buying a little piece of Middle England.

debtfreewannabe321

Hi there, 
today I reactivated my account with MSE. Hoping to get some motivation to pay off our mortgage a little quicker.
Little bit of back story- So I had a diary in the debt free wannabe forum many years ago. I paid said debt off, saved up money to purchase a house and moved. Since then (2015) I have divorced, been left with more debt, paid debt that off, found my soul mate, got engaged  and we have since purchased a new home together with the proceeds from my first home.
My new mortgage stands at £99,224.15 as of today. We pay £515 per month, interest rate is 2.49% and we have around 3.5 years left at that rate. I can pay just under 10k off as overpayment per year without penalty. I am 44 soon to be 45, partner is 47. Our mortgage has 20 years left, I don't want to be having to work to pay a mortgage when I am 65 and he 67! So here I am...

We have a little bit of debt running alongside this mortgage. No credit cards and no overdrafts that we are always in (unlike my other diary) but we have some 0% loans.
When we bought this house I had 30k in savings, we have spent all of it doing this house up and had to put carpets on 0%. Then we had teeth issues and now have a dentist loan because NHS dentists don't seem to exist around these parts for adults 
My partner has both of these in his name so I'm unsure how much is left exactly, I will get those figures, but I know that the teeth is less than a thousand now and the carpet is around 3k. 
I have two dependents at home, very expensive teenagers. I recall moaning a lot about expenses of young kids in my other diary. I take it all back... One child has moved out since my first diary, he is 25 now and I have a 14 & 15 year old. 
My partner works full time, I work part-time. We both try to make money on the side to pay for extras.
We have a few jobs left to do in the house still but they can now be done as and when, they aren't important things like no bathroom and no functioning bedroom (we were on the living room floor for months) so all in all I think it's time to focus on paying down some of the mortgage so we can be less reliant on our incomes every month. At the moment we live pay cheque to pay cheque. I used to be so organised with savings accounts for everything, money saved up for yearly expenses and foresee things coming. At the moment I feel so disorganised as we have focused solely on doing the house up the last year and half and the money seems to have drained through our fingers!

Our income as it stands is approx £2700 and our outgoings minus food is approx £1420. These are approx because the income changes month to month and the outgoing changes month to month (usually because of gas and electric).

Savings- in my other diary I complained a lot about a house I bought at the height of the housing market ....which then crashed and I couldn't get rid of the house for love & definitely not money. It took 15 years for the house to be out of negative equity and I finally last October had a nudge from the universe to see how much the house might be worth. I got an estate agent round and it was finally over what i paid for it. I got in touch with the rental agents and by a stroke of luck they had an interested party who wanted a house on that estate with the tenant in place! It sold and I came away with approx £25k. We used 5k on the house (it is actually part of the 30k I spoke about before) and I have put 20k into an ISA where I try, for the most part to forget about it until it's maturity. I do not have a pension and that house was always supposed to be my pension. I have perhaps £3.41 in my official emergency fund, oops.

So far this year I have already started on a money saving path by buying an electric monitor that tells me how much I am spending on everything. This has already led to us selling the dishwasher, buying a filter tap so I can switch the distiller off, cutting down on doing half washes of clothes (such a naughty habit I had gotten into oops) and cutting down on tumble drier usage and selling an oil radiator in the outside office. We have also put a timer on the fish pond pump as it was going all day long, 24/7 I was gobsmacked at how much some of these cost. 

Grateful to be starting a new year though with the house mostly done so I can focus finally on the numbers and perhaps see some savings in bills and in my account- finally! 

DFW321 

debtfreewannabe321

WHERE MY FINANCES ARE, JANUARY 2024.

My income is:
£1140 approximately (I've rounded up or down) made up from:-

£530 maintenance (which may go down very soon)
£450 wages
£160 child benefit

My partner's income is:
£1750 approx. (this goes up or down dependent on expenses)

£2890 in total. on my initial post I stated £2700 and that is because we are usually in the overdraft for the last week by a couple of hundred.  That needs to be the first thing we correct so we start the month with all our income in the black!

Our month runs from 25th to 24th each month so we are well into our month now although this is a LONG month and we still have three weeks left nearly   

I started this month with £95 left on my next account to pay off from Christmas as well as usual monthly expenses.

This is my outgoings each month as it stands currently:
Mortgage                           £515
Council Tax                        £140
Gas & Electric                    £245 (this one makes me mad and I will be doing something about this one!!)
Water                                 £61 (this one also feels like a lot to me?)
Mobiles x 3                         £21
Talk Talk                             £24
Insurances                         £40
Kids activities & expenses £62
Maintenance                      £208 (possibly ending in June)
Carpet loan                        £93 (0%)
Dentist                               £125 (0% but a lot each month so we would like to pay this off to have the money to put                                                 elsewhere)
Now Tv                               £7 (cancelled it but have to pay until March)
Amazon Music                    £10
Plex                                     £4
TOTAL                                 £1555

This has gone up in the last month from £1420 because of gas/electric rises, and kids expenses have increased. I would like to get these basic expenses back down to £1400 if I can, starting with the electric bill.
I don't think we are very frivolous, my initial diary had me cut away most unnecessary bits from my budget. 

AIMS FOR PAYING OFF MORTGAGE

My aim is to pay off £9900 over and above the usual mortgage direct debit this year. This actually feels like quite a lot but I am always of the opinion to aim high    lol each month that would work out to £825 over and above our usual bill.
We can use quarterly bonuses and I am applying for new jobs with more hours. I am limited though because I sold my car before I moved here and we are in a town kind of in the middle of nowhere. We will weigh up whether or not it is worth us buying a new car in a couple of months I think. 
I would love to have paid off an extra £20,000 by the time we come to remortgage in a few years. 

HOW I AM GOING TO DO THIS

We have already started on this, we have sold off the dishwasher, oil radiator and reduced costs on other electric items in the house this week. 
I have a new filter (reverse osmosis filter) to be fitted under the sink this weekend. It cost me £212 but that will pay for itself in electric costs saved in 2.5 months. 
My partner has sold some other extra bits and started a small side business buying and selling small electrical items he refurbs (money spent on this was from what we've sold so not out of our budget). 

I have done a meal plan this week and got an online shop rather than going to the shops. I always spend more when I do a shop in person. So this week's food was £140 including dog food for three people (my son is at his dad's house for another week or so). Next week I will plan my meals and buy to the meal plan again. I aim to get the food expenses down to less than £600 each month as this is where our money has been leaking for the most part- this and DIY expenses.

My partner gets a bonus every quarter. We are due his next one in his January pay. This should be another month's wages again or thereabouts. It won't all be used for the overpayments- although ideally it should. 

OTHER MONEY SAVING GOALS

I would once again like an emergency fund of one month's wages. Back when I did my MSE debt free diary, £1000 was my goal, I think £1500 would be a better goal this time round so we have enough to pay our bills for one month should we need it. 

I don't want to be in the red again this year on my partner's overdraft! I got rid of mine when I was with stepchange and never got another overdraft, I think they are the most dangerous type of debt, so easy for me to fall into that. So that is high priority, budget well enough that we don't fall into that again. 

Okay think I have rambled on enough for one day, I will leave it there. (Thank goodness I can hear my one lurker say haha). Until next time....

debtfreewannabe321

Today I was hoping for a NSD but DP has gone to pick up some bits he bought on FB (to recondition and sell on). The money has come out of a jar of cash that we had accrued from selling things so technically not from the budget. So all good I suppose. Although the pot was completely emptied out  I'm waiting in for a man to come and collect a mirror I'm selling, and I've already sold an old TV this morning so our depleted pot should be looking a bit healthier by the end of the day.

I have been holding off on doing laundry all week for today so I can save some money on the washing machine and tumble drier. And I realise now that I probably should have been doing this all along . I only have two washes to do  I usually put one on each day, so they were probably only half washes each time. Oops. My DS is not here though he is with his dad for another week so we probably would have had another wash there and my DD has only been home a few days too. I will have to wait a few weeks to see if this new routine works or not. But even if I can half what I was doing it will help.

I'm cooking a veg curry later with all the sides, fake away rather than wasting money on a take out (and we don't have any good ones in this town so I would rather eat my own food anyway and save £50 doing so). If I can cook enough I will put the rest in the fridge for Monday's dinner. I am cooking a cottage pie tomorrow so will make double and use the rest for dinner on Tuesday if I can. 

I have decided to use the child benefit each week to pay for uniforms my kids need for Air cadets, so I started that already yesterday with one pair of shoes for one of them. And will continue to do this until it's all bought. Have been sourcing it all on eBay second hand anyway so hopefully won't be too expensive. 

I messaged the mortgage app asking how to overpay and I have the details for that. I can just log in and do it on my app it seems or set up a regular DD. I think I will try to do both from next month. I've rounded down my account every day this week and put the extra into the savings pot. This method was quite helpful in building up my emergency funds when I did this before. 

Not much else planned today, cooking, chilling and washing & ironing it seems.  

redofromstart

Welcome back, and good luck with your plans.

debtfreewannabe321

redofromstart said:

Welcome back, and good luck with your plans.

Thanks redo  

debtfreewannabe321

I'm waiting for washing to finish and DP to return home. 

Mirror was picked up. We have £55 in the savings pot again  

I actually feel lost at the moment. We have spent a year and a half solidly either working or doing DIY so now most DIY projects are done, I quite literally wander around the house wondering what to do with myself every time I have a day off I suppose it is a good problem to have. 

I have just been on the overpayment calculator. I put in how much I owe and our monthly payments and put in a figure of £250 as an overpayment to see what would happen. Pleasantly surprised and may speak to DP when home about adding that payment in with our monthly DD on pay day. 

"We've calculated that you repay around £520 per month. If you regularly overpay £250, we estimate that by the time you clear the mortgage...

Overpayment saving:
(in interest alone)

£12,680

Debt cleared:

8 years and 2 months earlier

Total repayment:

£117,400"

That sounds much better than the current 21 years left (well 20.5 years left). And if I can make savings in the budget elsewhere to the tune of £250 we are not stretching ourselves either that would be £3000 of my target done already and any extra would be bonus. I can only pay 10% each year without a penalty anyway hence the £9,900 target. So i think although that may be a little high considering our incomes, the £3000 sounds very do-able. 

LadyWithAPlan

debtfreewannabe321 said:

"We've calculated that you repay around £520 per month. If you regularly overpay £250, we estimate that by the time you clear the mortgage...

Overpayment saving:
(in interest alone)

£12,680

Debt cleared:

8 years and 2 months earlier

Total repayment:

£117,400"

That sounds much better than the current 21 years left (well 20.5 years left). And if I can make savings in the budget elsewhere to the tune of £250 we are not stretching ourselves either that would be £3000 of my target done already and any extra would be bonus. I can only pay 10% each year without a penalty anyway hence the £9,900 target. So i think although that may be a little high considering our incomes, the £3000 sounds very do-able. 

This is very exciting! how motivating! 8 years earlier is wonderful...
look forward to your diary unfolding as you progress.

killerpeaty

Hiya! Welcome back! I agree that overdrafts seem like they're very dangerous, my understanding is they're more expensive now than ever.

With regards to you overpaying the mortgage, could you consider doing a "must" and then a stretch goal? 

beanielou

Happy shiny new diary 

debtfreewannabe321

LadyWithAPlan said:

debtfreewannabe321 said:

"We've calculated that you repay around £520 per month. If you regularly overpay £250, we estimate that by the time you clear the mortgage...

Overpayment saving:
(in interest alone)

£12,680

Debt cleared:

8 years and 2 months earlier

Total repayment:

£117,400"

That sounds much better than the current 21 years left (well 20.5 years left). And if I can make savings in the budget elsewhere to the tune of £250 we are not stretching ourselves either that would be £3000 of my target done already and any extra would be bonus. I can only pay 10% each year without a penalty anyway hence the £9,900 target. So i think although that may be a little high considering our incomes, the £3000 sounds very do-able. 

This is very exciting! how motivating! 8 years earlier is wonderful...
look forward to your diary unfolding as you progress.

Thank you! And welcome  

debtfreewannabe321

killerpeaty said:

  

Hiya! Welcome back! I agree that overdrafts seem like they're very dangerous, my understanding is they're more expensive now than ever.

With regards to you overpaying the mortgage, could you consider doing a "must" and then a stretch goal? 

beanielou said:

Happy shiny new diary 

Hi to both of you! Again! I recognise both of you!
Overdraft we have just been offered was something ludicrous like 35% ouch!

So DP came home yesterday and seemed equally as excited as I was about paying down the mortgage that quickly! Oh what a change from my old diaries on here where my ex used to spend as much as I would try to save and we'd argue over everything to do with money

So after playing around with the mortgage calculator   we have settled on an amount to overpay regularly from payday (25th). 

I am also getting back into MSE mode with banking. I used to have around 10 savings accounts all named for different things because I couldn't get my head around one account for all (I am not particularly great with numbers lol). I closed that account down after a fall out with HSBC  and I now have a Natwest basic account. DP has a Santander. So this morning has been spent opening DP a Natwest account, once he receives all the stuff in the post we will turn that into a joint account. That will be our bills account, and we can move all our standing orders, direct debits to that. Hopefully that will be up and running by my birthday end of Feb (that's my goal for that one).

DP gets paid his first bonus of the year end of Jan. I have the numbers of the amount owing on the 2 (0% interest) loans he has running.

Loan One is £125.79 per month, 7 payments remaining, £768.70 owing.
Loan Two is £92.42 per month, 27 payments remaining, £2,495.34 owing.

With his bonus I intend to pay off the smaller loan in full so that we have an extra £125.79 back into the pot every month. That will go straight towards the overpayment.

I also want to back pay for January the overpayment we have decided on for the year as I didn't budget for it on payday (in fact I hadn't even decided to re-join MSE last pay day, that was a spur of the moment thing of let's make 2024 a let's get my sh17 together lol). I think we will start off with paying £300 or thereabouts (I will make my final decision on this before payday lol) every month on top of the mortgage. 

I made a delicious Rogan Josh veg curry yesterday and made enough for two days. I am making a mushroom and lentil cottage pie today, will make enough for two dinners there as well. Next week I aim on getting my shopping for less than £50 by stretching dinners into two. 

DP came home yesterday with a boot full of electrical goods to refurb (all broke to some degree) and sell on. It is kinda a hobby / hopeful bit of play money on the side. 

I have done overtime all week since being back at work so have 3 hours overtime next payday (all amounts to something eh). DD is going down to her dad's house next weekend for a funeral. Her and DS will both come back together the week after. I need to factor in petrol costs for these trips. I haven't included the car expenses on my initial budget because it is DPs company car so all car costs come out of his wages hence why his pay looks so low and varies so much- depending on how many private miles we do. We have debated getting the car allowance in cash and buying our own but he does a lot of miles and the car would need servicing regularly and we would have the MOT, insurance and any other costs to figure out. It seems easier to just have it deducted from his pay for now. I have use of it when he is not using it too.

I have been moving my electric monitor around the house and yesterday I tested the TV in the lounge (4p for four hours!) and the record player (2p for approx 2 hours) so they can both stay haha. I might test the iron too. If it costs too much does that mean I never have to iron again

Anyway, a NSD day today, I am cooking, ironing uniform for DD and myself, and DP and walking the dog. DP is fitting my new water filter for me, I am SO excited about that one, although he has just unboxed it and it is HUGE so will have to now rearrange all the stuff under the sink.