Saving, Living, and Ditching the Mortgage

RedLipstick

Hey everyone!

Long time lurker. At my lowest I was here reading the SLLM posts hoping one day I will have my own mortgage and staying strong letting money sit and grow. These days I have my own mortgage on a lovely flat in a lovely city, almost half way through my 5yr fix now. Want to tackle the mortgage but hardly have any savings to comfortably kick things off.

My place, although almost exactly what I wanted, wasn't in the best state. I didn’t want to get into too much debt so have been saving and doing the works as I go, occasionally easing the cash flow with a 0% CC, PayPal Pay in Three, etc. I'm good at planning these and paying debt off so no issues. It's a 2 bedroom flat, and so far my wee office room was finished June last year, and just had the guys yesterday doing some final work in my bathroom, so this is now out of the way and I could not be happier. I've had around £10k saved up for the bathroom but topped that up with a credit card (0% until July 2026). In the meantime I've also received circa £1k bill from HMRC for some unpaid tax (I'm PAYE, my previous employer messed up some calculations) so the CC was there to again ease the cash flow on the bathroom reno. Worked out well, most of it is paid by now, have £3.2k left which I'm planning to tackle in the coming months. I'm also in the process of doing second year of my part time MSc degree - first year I've paid in full, this second year I'm paying by semester, still have two to go which is roughly £4k in total.

What I am struggling with is that I want to do it all at once. I want to overpay on the mortgage, do the renovations, save for so many things, top up my pension, get the ISA in shape, tackle student loan, etc etc. A wee holiday wouldn't hurt too but can wait. Last weekend I've read the Total Money Makeover book and what resonated with me is the idea of "diluting efforts" and not seeing the results when you're trying to tackle everything at the same time, and that when you're doing it solo, a job loss is 100% cut in household income. Well..

I know I can do well when I focus so I have decided to take the "go step by step" approach. When I was saving for the deposit, I was only saving for the deposit, main reason I did well. I just threw all the leftover money at the accounts (LISA and some saving account at the time). It wasn't much but it was growing nicely. Now it's just too many things all at the same time, £100 here, £200 there, £100 here, etc and I feel like it's all dragging and I'm getting nowhere. So the diary here is to keep me focused. I have a number of financial goals I want to achieve by the end of this year/early 2026, and hopefully the diary will help me to keep track of what is happening, step by step. Emergency fund takes the priority, while some money also gets funnelled to the MSc fund so I don’t have to touch the CC. I also have a solid budget and monitor my bills/spending in YNAB so I know where the money is going.

Welcome to my world and thank you for reading! Hopefully smooth sailing at least for 2025, wish me luck!

RedLipstick

To start things off, here is how things are looking right now:

• Current balance: £161,200
• Monthly D/D: £793.10

Interest calcs:

• Yearly interest: £6061.12 
• Monthly interest: £505.10
• Weekly interest: £116.56 
• Daily interest: £16.61 

Key goals for now. Quite a challenge but let's see how far I can push! Payday next week so the list will be getting updated very soon.

• Save £10k in emergency fund: £4,000
• Get monthly interest under £500 (need balance below £158,000): £161,200
• Get mortgage down to £150,000: £161,200
• Pay off credit card: £3,200

South_coast

Welcome, and good luck with your efforts 😀! I have definitely decided over the years that I am much happier being a "snowballer" with my money than a "multiple potter" - it's the same amount of money, but psychologically it feels so much better!

RedLipstick

Thanks South_Coast! That's a great way to put it really! 

beanielou

Happy shiny new diary. 

RedLipstick

Had my performance review this week - I'm told I'm doing great so I assume my job is safe for now. We've been through a restructure this quarter so I'm on a cautious side, especially as I have been made redundant few years ago, just at the start of pandemic. It was a horrible time, I was still fairly junior just 2-3 years into a new career path. Learned a lot from it though, I don't think I will ever feel fully secure in a job again. CV is always ready!

To "celebrate" this positive review and outlook for the next few months, I have sent £1,000 towards Mortgage (£280) and CC (£720). D/Ds are taken on the 1st so will be glad to see it going a bit down again soon. Considering getting the mortgage below £160k when next month's salary lands, even if it's just by a penny. I will also be spending around £2k end of this month on my studies, thankfully all saved up already in a separate pot. I need to start saving now for the final payment in July. £2k every 3 months, I absolutely cannot wait until all the payments are out of the way, this will free up so much money per month! Will be worth it though.

Progress:

• Save £10k in emergency fund: £4,000
• Get monthly interest under £500 (need balance below £158,000): £161,200 £160,920
• Get mortgage down to £150,000: £161,200 £160,920
• Pay off credit card: £3,200 £2,480

Monthly interest now down to £504.22, reduction of £0.87... Eye watering but it is what it is!

Hope everyone has a fantastic Easter Holiday break! xx

here_for_the_tips

Go below the £160k, seeing a different number in the ten thousand column was a real boost for me this year. Best of luck with the journey.