Statement of intent

StuartGMC

Ev
Thanks. I do hope you can get in now and secure a good mortgage package when you change, things are looking somewhat dicy at the moment. It's unclear if interest rates are going to jump or not.

WelshLassie
Thanks for the feedback.

SMF2
Yes, even though we've overpaid throughout the mortgage life since 1994 (when no one we knew did so and the impact seemed so limited with the higher interest rates), support from all of you here has really spurred me on to improve significantly on the situation and across the complete financial picture.

Cheers

Optimisticpair

It really does you good to be travelling this path with someone who actually really does understand what you are doing and why.

Now I do admit we will be executing some ideas that would not fit with the 'no noticeable cutbacks' theme but I think it is reducing utilities by stealth if you have a candlelit bath instead of an electrically lit one. Go to a health farm and they'd charge I don't know how much for the candlelit spa treatment.

Thanks for sending the spreadsheet. Unfortunately I can't get into my mail today to pick it up. Will try again tomorrow.

setmefree2

StuartGMC wrote: »

Yes, even though we've overpaid throughout the mortgage life since 1994 (when no one we knew did so and the impact seemed so limited with the higher interest rates), support from all of you here has really spurred me on to improve significantly on the situation and across the complete financial picture.

Cheers

I've found that discussing over paying the mortgage is a conversation killer, so it's great to find like minded people

StuartGMC

Optimistic and SMF2 thanks.

I have just got this month's pay arriving in the account, and whilst the credit card is set to pay on 8 Oct (yes, I have been checking it is all safe and due to be paid!) I have the pleasure of seeing that we are offsetting 62% of the mortgage and the effective interest rate is 2.28%

Not sure if NatWest will be raising interest rates soon, but a 0.25% increase in the rate would lead to our effective rate being 2.35% i.e. only a 0.07% increase. Hopefully this will all help to cushion us against rate increases until we're 100% offset.

BTW, reflecting on our original mortgage, 8% was the initial rate, and I think it went to 9% around 1996, but now this 8% would (on the above offset) be 2.71% whilst the 13% which was the average for 20yrs before we took out the mortgage would be 4.11% (but both ignore the fact that usually the savings rates would increase too).

OH just had a look at the spend for groceries and noted that things like Morrison's lemonade rather than brand name is what we have, and 3 for 2 etc she looks for but we don't record these things. We had raised our "estimate" in Jan to £440 for groceries etc from £400 to account for the increasing prices. However, our real data which has been collated since June, now shows that we are at £402.96 average per month (£92.38 per week) so she has got a good buzz out of seeing that her other efforts have had impact too. Today she did the shop at Morrison's (got the 5 energy saving bulbs for 50p offer of course!) plus the butcher and tried Farmer's market to do a big cook this weekend to "feed the freezer".

Farmer's market locally not brilliant, too much is "added value" products such as pies etc and not much raw veg, but, some good 2yr old Lincolnshire Poacher cheddar "brought a little south for us" is excellent. Apparently they will have 4yr old aged cheese ready for Christmas, can't wait for that, mmmmm

Remember, keeping freezers and fridges with a reasonable amount in them will make them most efficient. So where we find that the fridge is getting empty just pop in a lemonade bottle in addition to those on the bottle rack. The basis is you have a volume which is cold and retained when the door opens (once the bottle is cooled down), whereas air in that same volume would flow out when the door opens and then the warm air needs cooling down.

StuartGMC

Having looked so dedicated, I think I had better own up tonight to a little extravagance... I've been on a contract mobilephone since 1994 (not I hasten to add the same one or package!) and had been thinking whether I could justify continuing or should move to PAYG... In the past I upgraded phones every 12-18months and from the days of the early analogue Motorola (Microtac I think, but I'll need to look at it in the electronics "museum" dsiplay at work to check - very MSE even then sold it to company for £10 for their display and bought an Ericcsson), through the early digital era, you really did get a big improvement in features, battery life etc with each upgrade.

However, I've had a Sony-Ericcsson W810i for over 2 yrs and was pressed to justify upgrade and to be honest wasn't convinced it was needed accept for web and satnav; I was out of contract limit etc and MSE does point to cheaper options.... then I was saved!

OH put her PAYG through the wash so now needed a replacement. Instantly I offered up mine ("You'll find the menus etc jsut the same as the old one" he said helpfully)

Checked O2 to negotiate a little on an improved package for the O2 xda Ignito (or HTC Diamond on other networks, O2 was cheaper), touch screen, Windows Mobile 6, and a whole host of features that'll keep me busy for a while

So have committed to 18months contract, but with improved insurance and free web access it's a better deal than I had for the same price. So spreadsheet not impacted, but then again have also not reduced spend....

...where did I put that sackcloth?

Treacle_Toes

Hi,

I follow a few of the diaries on this board, and I’ve been watching yours with particular interest recently as you have an offset tracker mortgage. My fixed rate ends in January and after a lot of ‘scratching of my head’ we’ve decided to apply for an offset tracker too. I’ve got my phone call booked for next week to go through the figures with the bank, so fingers crossed!

One thing I particularly like about your diary is that you mention the percentage you are offsetting at any given time. Now this may appear to be a daft question, but can you see this on a daily basis by just logging into your account, or do you do the calculation yourself? I guess once I’m all set up the answer may be obvious, but it appears to me a good motivational tool to be able to see the offset % at any time (maybe to prevent unnecessary spending!)

Good luck with your Mortgage Free goal!

StuartGMC

Treacle
Thanks for the note and good luck with the remortgage (we're on SVR not tracker, but the capital remaining means wer're below the threshold for alternatives and the fee would be a large % of what's left).

The calculation is in my own spreadsheet not online, I have certainly posted about it here as I had previously not accounted for the interest lost because savings don't accrue interest, but you should account for the tax you'd pay on that interest as well However, the double check is to see what interest you've been charged against the balance which gives the value retrospectively but solely on the basis of the interest paid and not the lost opportunity to earn interest.

I'll try to find the thread about calcs and post link back here shortly. (Couldn't find it!) Initially I was only considering the offset and then pro-rata the interest rate but this missed the lost opportunity for interest to be earned on the savings. I had input here and then modified the spreadsheet which is the household budgeting one I have passed on to other people.

StuartGMC

As you know, just changed insurers for building and contents. New one from Directline was much cheaper (not sure if this was due to the present offer of 12months cover for 9months cost) but also had wider coverage. It includes the identity fraud cover with Experian, which would normally be £60 per year and therefore not something I would have spent money on. However, it's included so have registered and await PIN to access and discover my credit rating....

Will also need to look very carefully at the annual travel cover included to see if it is sufficient for our holiday needs; or if they'll extend cover for only a small additional premium.

medic1978

Hi StuartGMC,

Thanks for the spreadsheet. The Excel version wouldn't open in Office 2008 on Mac, it keeps shutting down every time i try opening... The OpenOffice version is working fine

Couple of questions...
For outgoings such as groceries, fuel etc are you inputting the data as you spend it in each relevant sheets? Or are you totalling up per week and then inputting it in one row on the relevant sheet?

Also, how are you updating current account/mortgage/savings balance? Do you do it once a month?

StuartGMC

medic1978 wrote: »

Hi StuartGMC,
Thanks for the spreadsheet. The Excel version wouldn't open in Office 2008 on Mac, it keeps shutting down every time i try opening... The OpenOffice version is working fine

Open source wins then? I'll have to see if there are any known compatibility problems, although there are no macros etc only simple calcs and cell referencing. Did you have Excel open then try opening the sheet via file>open, or just open it direct from the file manager?

Couple of questions...
For outgoings such as groceries, fuel etc are you inputting the data as you spend it in each relevant sheets? Or are you totalling up per week and then inputting it in one row on the relevant sheet?

At present we enter the data for each receipt; groceries for us are maybe 2, sometimes 3 receipts in a week, so not a massive task. The date function automatically calculates weekly and monthly spends based on the dates you use.

Also, how are you updating current account/mortgage/savings balance? Do you do it once a month?

These are taken from the online accounts data. I do it often (far too often?) each month, usually as current account changes. I usually login to bank when I go online, to check all is ok. Again it only takes a couple of minutes.

HTH