Prosperous & Creative Soul Year 4

savingholmes

Three years ago I finalised my divorce and completed on my biggest ever mortgage - £202K and switched from interest only between 2 of us to repayment on my own. I took the term for as long as I could - so 22 years - which means I would be 73.5 by the time I was actually free. I've used my post from 3 years ago as a prompt for this one.

Then I owed £1.5K on a 0% but had a £2K EF thanks to a gift from family. This was compared to the £70K of debt we were in at the end of 2016 including 2 cars. That was our third or fourth debt cycle where previous sums had been in the high 20s and early 30Ks. This was a contributing factor in my divorce as while I'd largely learned the save not credit lesson, my Ex still hadn't.

So what has happened since? 

I put my house on the market mid 2023 and sold it within a couple of months. I offered on one house but it was majorly under-valued and had issues so I switched to a different one and moved within less than 2 months after that! I moved house to a more rural location, high up a hill with fantastic views at the start of this year. This had been a long term ambition for me so it has been lovely to take action on that and finally achieve it. To secure my new home I radically decluttered decades worth of family possessions - as this was both a downsize (slightly) and more importantly a fresh start.

Moving home released some equity - but I didn't change my mortgage amount. This gave me an emergency fund and much needed money for home improvements/maintenance - as this house has been more of a do-er upper than I originally realised. I'm currently mid-way through a driveway extension and raised bed project - having already had the roof re-felted and battoned, new roof verge, new ridge tiles, re-pointing of the worst bits of the house walls, new sofits, fascias and guttering, new slider patio door etc. I also have asbestos removal taking place in the hall and lounge in a couple of weeks' time and am then having some new flooring fitted. 

It's been an expensive year for appliances and tech (hoover, microwave, dryer, phone and laptop). I also got a new ottoman bed and mattress, 2 new sofas and a chair etc. I also went on my first and then second holiday abroad in 8 years which was a major breakthrough for me.

Art is my passion - and I have gone to some classes and groups over the last year that have taken my skills to a new level. I hope one day to earn an income from art and writing. I previously self-published book 1 of a trilogy and book 2 is close to done. I have a day job and have been struggling with job uncertainty due to a restructure and other things - but it currently looks like I'll have a job for a while longer yet. I and a number of wider family members have health struggles.

I am trying to become debt / mortgage neutral so I can free up time for more creative pursuits. I'm trying to do that through sending extra £ to my pension (AVCs) while 'stoozing' (i.e. using 0% CCs and earning interest on those spends). 

savingholmes

So where am I trying to achieve financially:

• If I was mortgage free I would need around £23-26K gross to live on I reckon. So if I retire at age 67 I should be more than covered and probably financially better off than I am now - given I pay 8.5% into my work pension currently and have a hefty mortgage and life insurance premiums.
• The question is how much earlier can I 'retire' / achieve 'financial independence' so I can pursue my creative side more fully? 

My goals: 

Achieve FIRE/Mortgage Neutrality by mid 2030

1) MFW Nov 21 £201,999 with [s][/s] 232 payments to go - now £179,153 Equity 28.33% 

2) Spend on handyman, external building works, patio door, hard landscaping, floor £20.2K so far

3) CC £19K on 0% spends card offset by £31.3K savings 

4) Mortgage neutral by June 2030 (AVC £15.1K + Lump Sums DB £4.6K + SiPP 1K) 20.6/£127.5K target 16.16% value at 15/11/24

5) FI Age 60 annual income target £13.7/30K 45.7%

6) SIPP £4.5K at 15/9/24

Since November 2023

• My mortgage has dropped around £7.2K
• I'm hoping the work to the house will have increased my equity by up to £20K - offsetting my current CC
  
• I've increased my AVCs (tax free pension fund) from a balance of £6.4K to £15.1K - a difference of £8.7K. I am now putting in £1K a month where at the start of the year I was putting in £450 a month
• My pensions have increased by around £1.3K a year for life. If I assumed I'd have that for 20 years and live long enough - that's worth £26K
• My SIPP has gone up almost £1K
• I now get monthly interest of around £120 due to having 0% purchase CC on which I've managed to pay for major purchases including the current drive work
• Last year I had savings of around £6.3K but no real debt - where this year I have savings of £31.3K but £19K debt so net positive change of around £6K there even after moving costs of over £8K, returning a gift of £4K and lending someone £1K

So an improvement of £68.9K including pensions (more than I earn in a year) - assuming that the work I've done added in equity what it cost - or £48.9K otherwise.

dawnybabes

You’re doing amazing 🥰🥰🥰

beanielou

Happy shiny new diary my friend 🤗🤩

skint_spice

Happy new diary!

Blackcats

Happy new diary!  Happy year 4

TallGirl

Lovely positive financial roundups and reflections plus a shinny new diary. Look forward to continue to follow you. 

jwil

Happy new diary, and great progress over the last year!

mark55man

Happy shiny new diary SH - good luck to you and all your followers

+ yay Page 1 baby

KajiKita

I’m here! 😊 <waves>

How lovely to look back over everything that has come at you in the past year and how much you have achieved. You should be very proud of yourself (I am 😊) and I hope it gives you a boost to your confidence too 😊

I will probably do a review of my year over Christmas, inspired by yours, but keep it all on the same thread 😊

Sunshine_girl2

Happy new diary SH. You have had a great year and achieved so much personally.