Daring to Dream: Mortgage Free by 63

DrSpendingLittle

I'm back!  

The house purchase went through smoothly and we moved in just before Christmas, which sounds crazy but in fact it was perfectly fine. We had about 6 weeks overlap with the rental so were able to move and deep clean leisurely. It all worked rather well to be honest. Hats off to those who do sell and buy same day moving, with kids (and pets) to another part of the country! 

Of course, it's taken me ages to be in a position to spend any free time on here - we've focused on getting settled and into our new routine. LO is loving his new space and his new garden. He's done really well. Kids are so resilient. 

I hesitated coming back sooner as I knew I didn't have the time to catch up on others' diaries and, well, what's the point in being on here if we're not able to interact and build that community. I'm really looking forward to getting back into the frugal mindset.  

We've now passed that 'first, get it liveable' stage with the house and are beginning to think about what we'd like to change etc. We have one room that is still complete chaos but it's not a main room and we need to make some changes to our outdoor space before we can get it sorted. And that requires builders and money etc. So for the next year or so, it will remain as is. 

We are managing finances generally well. We get more free childcare hours in September so that will reduce outgoings. We hoping to get promoted over the next year or so too, so fingers crossed that happens to bring in more income. 

I am managing to save money each month and put a little extra into a S&S ISA, intended for LO's future, but in my name so if we end up needing it for other expenses, we can access it. He has his own junior ISA that family put ££s in to so he is being catered for. 

We're overpaying the mortgage by a small amount each month, effectively taking 1 year off the term. The plan is to increase that overpayment by a little more when LO gets more free childcare hours. We do have some work we'd like to do on the house and ideally we'll cash flow it, so we will have to find a balance. 

I'm hoping to get on here more often to help keep me on track with finances and reinvigorate my money saving ways. I'm looking forward to having a good catch up with everyone's diaries soon. 

Hope everyone is well.

DSL 

DrSpendingLittle

I've enjoying catching up on some diaries over the past few days, particularly the ones that haven't had too many updates since last November. I think for others I am going to have to start from the latest posts as you have all been very busy and chatty, which is fabulous. 

I am beginning to realign myself with MSE ways and refocus on thoughts on those that prioritise financial security and paying the mortgage off early.  

Our current balance is £352,816.90. The interest added monthly is stomach churning to be honest and I can't bring myself to write it down here! 

Our current overpayment is approx. £65 per month, enough to reduce the term by 1 year to 21 years.

Once LO is out of nursery, I am hoping that we can overpay £210 per month to reduce the term to 19 years, if not £290 to get it to 18 years. Our car loan payment of £309 ends next May, so that might ease things a little too, but we might need a 'new to us' second car by then. My view is the sooner we can make overpayments, the greater the benefit will be in reducing the interest payable, even if we have to stop them every now and then to cashflow upgrades etc.

I feel I need mini targets and motivations to tackle this big mortgage debt - lately, I have been wondering what they can be. I do need to peruse the MFW diaries to explore some tips and ticks. I was wondering if trying to get the interest down each month could be motivational. I need to look over the previous payments to see by how much it does reduce. Anyway, I'll make some time to look over MFW diaries to explore what others are doing. 

WFH today, and all this week in fact, so I am hoping for a LSW. It wont be a NSD as when I took a parcel to the post office, I noticed a few bits and bobs that LO would love so I did spend £20 stocking up on stickers and crafty bits. Not necessary purchases by any means and probably a bit of a fritter. But I am increasingly conscious about it. 

Right, I must dash, I have a bit more work to fit in before collecting LO from nursery, so off I go. 

DSL

DrSpendingLittle

I've spent some time over the past few days moving my personal savings to new accounts with better interest rates. I need them to be easy access for the time being so I'm limited as to how much interest I can get. I've gone for an Inv3stec account via Aveeva as they were offering amaz0n / bandq vouchers plus a little over 4%. I have to wait 6 weeks for the voucher but it'll be a nice little something once it arrives. I also have a natw3st digital saver giving me 5.5% but that has a £150 deposit limit per month. I also have a few ££s in my Ch4se saver at 2.75%. I was tempted to move that into the Inv3stec account too, but I have to apply to withdraw from inv3stec so it isn't instant access. I'd rather keep it where it is for now.

I have a small amount sat on my CC - about £540 - which needs clearing soon. Mainly work expenses and some online orders. I had an odd balance in my Ch4se savings so I have redirected £76.44 to my CC this morning to make a nice round balance. Felt good. I need to wait until my expenses come through, plus a refund, before I can clear the rest. Hopefully my maths has been correct and I have managed to avoid interest, but we will see mid month when the statement gets generated. I have had a number of 0% on big purchases promotional balances on it since moving house that we used instead of savings. We had to purchase some new white goods, curtains / poles and some bedroom furniture when we moved house and we've been paying off those various balances in time to avoid interest. I think there was one final balance that needed clearing by May 30th - hoping my May payments cleared that in time!    

WFH today so I'm aiming for a NSD but I may need petrol later. Groceries seem a bit out of control at the moment and we need to start reining them in. We're in that tricky period where LO still eats separately as he's too little to enjoy our type of cooking, most of the time anyway. Once he gets older we can all eat together and enjoy economies of scale more. We've been doing Oc4do orders recently as I have a smart pass and we like the F&V from M&S. Its also really convenient to have food delivered and avoids dragging LO around the supermarket every week. Aldee and Lidel are not close enough to be convenient to nip into, though I do like getting my F&V from there occasionally when I'm in the vicinity - LO especially likes the watermelon from Aldee. 

I signed the forms for LO's 30 hours FEL funding today, so once they kick in in September, we should see a good reduction in his nursery fees. From September, I have calculated that we will pay roughly £660 per month for 38 weeks then £1520 for 14 weeks (FEL funding only covers the school year). Those figures are before the tax free childcare entitlement we also get, which gives us up to £2000 per year / £500 every quarter, so the monthly cost will be lower still. Overall, I think we'll be about £300 per month better off come September. We do have two more years of nursery to go, so any significant financial movement forward will need to wait until then. 

Otherwise, LO isn't costing us too much at the moment, save for nursery! I run a small wardrobe for him but he will need a big boy bed soon, as well as a new car seat. I also plan to paint his room when we get rid of his cot and add in some more things for him to play with - it's very sparse and magnolia at the moment, just a cot and book rack! It'll probably be Autumn before we do all that and I don't envisage it costing too much. 

We are undecided on whether to have another LO. We need to make the decision soon as time is ticking. Once we know what we are doing, I can begin to sell some of his old stuff. We still have everything but I don't want to sell now in case we have another. I might sell some of my maternity clothes - the ones I know I wouldn't wear in a second pregnancy. I will probably use any ££'s I make to buy LO some winter clothes.  

Next steps are to open a new joint account so we both have access to online banking. Then we can operate on a proper household budget and make better attempts to reign in food spends. 

Didn't mean for this to be so long, I am clearly procrastinating from the next work task on my to do list. 

DSL

DrSpendingLittle

Forgot to add. I plan to do a mortgage balance update each month. We make our payment on the 4th and interest gets added on the 24th, so I need to wait until then to give my first update.

Actually, having written that, I've just had a realisation. If we made our payment on the 25th, we'd pay less interest. That's correct, right? 

Perhaps I should change the payment date, though that would mean getting a month ahead of ourselves and thus needing to find an extra payment. I'll discuss with DF and see what he says. 

DSL

DrSpendingLittle

Not much happening at the moment - most bills have been paid, I think there is just the car loan, broadband and a couple of subscriptions due out before payday.

I've signed up for a YNAB trial again. I forgot how much I loved it during my debt journey. It's very expensive now, though. I used to pay £42 per year and was for some time grandfathered on the old subscription model when they changed it but they then kicked everyone off, I think a few years ago no, and forced us on to the newer model. I will use it for 30 days and see how I get on but I am tempted to sign up to the monthly scheme for a few months at least to see if I habitually use it. It really did help me in managing my finances better. I feel that pull again. 

I spoke with my mortgage company to ask about when the optimal payment date is, in relation to the interest added date, to see if I can reduce interest, or whether it even matters. They said not: interest on the mortgage is calculated daily and applied monthly on the scheduled date, so changing payment date would not help you reduce interest charged on the mortgage. Fair enough. 

I'm doing reasonably well with spends. Had a few good NSDs over the weekend and hopefully one more today.

Annoying I miscalculated my interest accruing balances on my credit card so paid £17 in interest this month! Argh. I have used my account buffer (a float in my current account) to pay off the remaining balance today, which I will reimburse when I get my work expenses back on payday. 

WFH today so just sat at the computer tying various words in various guises to tick various tasks off my to do list. 

Hope to get on with some gardening after work. We have a green bin collection this week and it's currently empty so I should take advantage of that. The grass could really do with a mow but I definitely don't have the energy for that in this heat! 

Enjoy the heatwave! Get that laundry on. 

DSL