Statement of intent

StuartGMC

Well, I have updated the spreadsheet wherein real data gives me the actual costs incurred for petrol each month. Adjusted to only average from 1 April (so it is representative of costs in a time of rapid change) this resulted in something like a 10% increase vs the average running from Jan... and about 17% over that from November I think.

It has made me think about the cost of days out at the weekend, which have been fewer than planned, although the poor Spring weather assisted as a "deterrent" of course. I'm somewhat ill at ease about this because come late Autumn and then Winter it could result in a real feeling of wasted opportunity

Also now getting the household groceries as real data rather than estimate. Too early to gauge yet but estimate was £440 per month for three of us. Initial small steps at "alternatives" to expensive brand being taken and summing annual savings only where the alternatives are acceptable. I know, I know, we could do better, but we like our meat from the butcher (although EU ruling on abattoirs means we don't get the certificates for the individual animals listed like we did in Oakham in the later 1980s and early 1990s!), choose free range fowl, support local shops for the "fill in items" in the week and we have very little food wastage. With a true picture of spend then we can improve I am sure but not where quality is compromised.

(If I was being honest with you at this point I would note how much of the £440 is actually my bottled real ale but maybe next month I'll look :rolleyes: )

I probably need to look at switching from contract mobile which I use presently (itemised bill means I can reclaim work related calls) and look at PAYG, but, I need to look at this especially when abroad and I do use the phone a fair amount so get a good portion of the 600mins of calls a month anyway.

Still have two cars, OH uses only locally e.g. daughter to swimming lessons (can't cycle there), occasions when she needs to take "loads" to her Brownie pack or when they are on camp, occasional work use, weekly main shop etc. Otherwise OH uses bike to commute and we try to walk for anything which is only 2-3 miles away (each way). My car will be plumating in resell value now, and more so once people understand the new RFL rates for 2009 and 2010, but it will be hard to cut down to one car if one considers just 4 taxi journeys each week (swimming pool and weekly shop) would cost some £24 or so alone at present fuel prices. A long term issue I think with no easy answers, other than clear the mortgage so I can afford the petrol to get to work:D

Little_Mama

Hi Stuart, on the one car scenario, just a thought but could the swimming lessons be moved to a weekend slot or a time when you are around? Also, what about getting your 'big' shopping delivered, you could then do the butcher bit at a time when you are around too. We cut our spending down by a third when doing this as I only bought what I needed and could check the cupboards. we still buy small bits in the week but they fit in a rucksack for going on a bike or I combine it with the school run and walk via the shops.

We've got the same conundrum, once the nursery run stops I'll be hard pushed to justify having a second car.

LM

StuartGMC

Little_Mama wrote: »

Hi Stuart, on the one car scenario, just a thought but could the swimming lessons be moved to a weekend slot or a time when you are around?

LM thanks for the thoughts; the swimming is scheduled with others of same ability in formal lessons so can't be changed (10yr old DD just got her 1000m badge :j so very pleased with her progress). My hours at work are variable and despite being in the office at 0630 (good for fuel economy to work of course) I usually won't be leaving until close to 1700 and can be worse...

However, I think we will need to review once we consider the need to replace the 2nd car; i.e. get a milk float (anyone know the tax on one of those?) or urban vehicle but, I am concerned that we will be demanding too much from the environment in terms of ore extraction for all the batteries required. Toyota presently struggling with the supply for Prius and energy costs and battery life concern me also...

It will be interesting to see how businesses respond to these pressures on staff in terms of costs to commute to work too.

No easy answers that's for sure!

EssexHebridean

I think when it comes to vehicle choices, the higher mileage you do, the easier the decision becomes. We do something around 24k miles a year in ours - about 70% of which is motorway driving, so anything too small is immediately ruled out, and we came to the decision that a diesel was the only sensible choice for us. We now have a Clio which on the way home this evening was returning 70mpg. Road tax costs me £35 per year. Of course if the car is required as a local runaround the decision in many ways gets harder I think as there are less hard and fast rules to stick by - so long as it's big enough for the people it needs to hold, size becomes less relevant, on short journeys you're not going to get phenomenal fuel economy anyway, and whilst you obviously want something safe, if you're not doing a lot of high speed driving a high NCAP rating probably isn't vital. It sounds from your comments above that the second car really is vital to you as a family - if this is the case unless you were in a position where you literally could not afford to run two vehicles then it would really be counter-productive to cut down to one.

Little_Mama

StuartGMC wrote: »

LM thanks for the thoughts; the swimming is scheduled with others of same ability in formal lessons so can't be changed (10yr old DD just got her 1000m badge :j so very pleased with her progress).

Well done to your DD, I teach swimming and I really like this time of the term when they get their next badge....although heart is in my mouth when it's my own kiddies :eek: I'd rather swim it for them....feel like I have after watching them. DS1 only just 8 but 2k is his next badge....way too far for me these days!:o

Reason I asked was that where I teach we teach all the abilities, in ability related formal lessons, 6 days a week, after school and Saturday mornings, pity it doesn't seem that your place is so flexible. Mine now manage a nice saunter to the pool, swim and saunter back.........part of the reason why I've to seriously think about keeping my runaround.

Re Essex Hebridean's point, we've got a diesel for long journeys, OH's commute etc, and a petrol runaround, unfortunately the savings to be made on diesel are slowly disappearing....but I did see something the other day with Quentin Willson telling you to top it up with some cooking oil! Haven't been brave enough to try it yet.

LM

setmefree2

Little_Mama wrote: »

StuartGMC wrote: »

.but I did see something the other day with Quentin Willson telling you to top it up with some cooking oil! Haven't been brave enough to try it yet.LM

This being MSE someone else has tried it already:-


http://forums.moneysavingexpert.com/showthread.html?t=564408



Not sure I'd do it though:rotfl::rotfl:

StuartGMC

EssexHebridean wrote: »

I think when it comes to vehicle choices, the higher mileage you do, the easier the decision becomes. We do something around 24k miles a year in ours - about 70% of which is motorway driving, so anything too small is immediately ruled out, and we came to the decision that a diesel was the only sensible choice for us. We now have a Clio which on the way home this evening was returning 70mpg. Road tax costs me £35 per year. Of course if the car is required as a local runaround the decision in many ways gets harder I think as there are less hard and fast rules to stick by - so long as it's big enough for the people it needs to hold, size becomes less relevant, on short journeys you're not going to get phenomenal fuel economy anyway, and whilst you obviously want something safe, if you're not doing a lot of high speed driving a high NCAP rating probably isn't vital. It sounds from your comments above that the second car really is vital to you as a family - if this is the case unless you were in a position where you literally could not afford to run two vehicles then it would really be counter-productive to cut down to one.

Agreed; whilst daily commute is 54 miles virtually all national speed limit dual and motorway, due to time away on business my annual milage (according to my spreadsheet LOL) is only about 12-14k, so the petrol v diesel argument is marginal, and of course I have my luxury in the S-Type 3.0L, (NCAP is quite good where you can find it listed but not sure official info is out there) so at least I can sit in the leather comfort and think about the cost of running it :rotfl:

Actually since filling up yesterday and a hundred miles later it is indicating 33.5mpg, but admitidly I have been running on cruise control "at" the speed limit and not accelerating too harshly, but pop her into urban driving and this drops a lot. Selected as I knew the 2.0L Mondeo used to average 35-36mpg on the same route, and in late 2006 petrol was 85p per litre. Driving style (aka use of the Sports mode ) has a big impact on economy so it really is in my hands or rather under my right foot!

2nd car is Ford Focus estate and believe me it is needed when you take those "little Brownies" away on camp with all the support items required. A Smart car just won't do. Aslo when I'm working OH uses this for trips out with DD in summer holidays etc and again good NCAP of 4. I am very keen on safety in cars having had a major accident at 27 on black ice on a dual carriageway and rolling and dropping down 20ft embankment into 5ft ditch and out again... so more than happy to pay for a safer vehicle even if economy and RFL are higher.

Trade-in values are going to be hit hard in the next year for many cars and of course you need to know the precise engine variant now to understand the RFL you need to pay. There's always the option of a camper-van; go to work Monday, stay in it at night and drive home Friday... not too good for work-life balance though!

setmefree2

StuartGMC wrote: »

I am very keen on safety in cars having had a major accident at 27 on black ice on a dual carriageway and rolling and dropping down 20ft embankment into 5ft ditch and out again... so more than happy to pay for a safer vehicle even if economy and RFL are higher.

OMG I'd have never have got in a car again after that:eek:

All The Best

SMF2

StuartGMC

Well, the credit card bill came and the cash went out to cover the holiday and now offset is only 45%, so the equivalent mortgage interest rate has risen to 3.91% on our mortgage...:eek:

However, this should be the worse case position this year, wife's salary is paid next week and then things should continue to improve from August through to June next year even with rising costs etc :rolleyes:

An update on measures taken:

I have managed to get the 3.0 Jag to turn in some 30mpg average on a tank of fuel, which is a combination of the ambient air temperatures and driving style, but, it does take some effort not to use the available acceleration. Interestingly, it is easier in the early morning light traffic than in the evening "rush" on the motorway mainly I think because I can use cruise-control in the morning but not in the traffic conditions coming home. Therefore you tend to move at the speed of the other vehicles and there is more acceleration and braking.

OH has been working on the shopping aspects and we are monitoring the "alternatives" and the savings arising. I guess I should add in the multiple buy savings, but not sure if this gives much value (to the spreadsheet). What did surprise me was that whilst crisps are a "luxury" and carry VAT, custard creams at Morrison's are 0% VAT

I tweaked my spreadsheet to include the formula =today() in the date columns in those areas generating average spend data that feeds the budgeting sheet (groceries, car, clothing). This has helped remove the distortion arising from the early stages where the period over which spend is averaged is short, so, one week is then a significant portion and can swing the average a lot.
(Those of you who have a copy of the spreadsheet can just add this in the last cell in the date columns, as the averaging uses the Max formula)

Presently I'm averting my eyes from the equity markets and the impact on the Stocks & Shares ISAs and will continue to buy while they are cheap (and getting cheaper everyday!) for at least the rest of this year, subject to review in September.

StuartGMC

Well I've been playing with spreadsheets again

Thanks to others on MSE and pointing me to the Overpayment spreadsheet (see this thread http://forums.moneysavingexpert.com/showthread.html?t=1013481) and the Egg calculator for offset and overpayment (http://new.egg.com/visitor/0,2388,3_54988--View_1028,00.html)

I thought I would review the planned mortgage free date and overpayments, noting we also offset to get a better idea of our end position. As you'll know from this thread, we have chosen to balance overpayment & offset with Stocks & Shares ISA (don't ask about present performance of the latter, but should get a LOT of units this month for the monthly investment!)

So the basis was to consider when we will be MF and also when we will hit 100% offset. A few simple factors were fixed:
Remaining mortgage period is 8 years
Capital owing now is £23113.30
Interest rate (before accounting for offset) is 6.45%

We know from our budgeting spreadsheet the monthly amount required to be set aside for future requirements (holiday, car replacement, decorating etc) but in this case I decided to be conservative and assume our present "low point in offset" remains.

So I ran the Egg calculator to get some "what if" data, firstly for the baseline of repayments at required minimum with no offset. This gave us £6534 interest costs.
So then ran with overpayments of £138 or £178, then minimum payment but offset by £9500 etc which gave an interesting result against a "one off" payment to clear the debt.

(Sorry, image size prob but it'll suffice I hope; use zoom in your browser)

So we can see a clear "optimum" and also the significant difference combining offset with overpayment at £11k offset plus overpaying £178 which fits well with our other budgeting. The saving of £5609.02 in interest is attractive. Also note that we gain very little in paying back faster than 4yrs 2months.

Then there was the "light bulb" moment, I ran the overpayment spreadsheet to see when we would hit 100% offset on the above basis. This should give us 100% offset in December 2010, saving 5 1/2 yrs on present mortgage or 8 1/2 over original 25yr term. (MFWs now can improve as you get daily interest calcs which we didn't on the overpayments through most of 1994-2000 - you lucky people!).

However the offset funds are part of our emergency and holiday fund etc (so these should be nearer £20k but this will be the case due to the monthly amount we place there anyway, so the above should be improved upon). So we don't want to pay off the mortgage immediately in 2010, we need to build additional emergency funds before we do that.

Now, once we hit 100% offset we need to think about getting better interest earned for monies above this. Also, we just need to draw the payment each month from the offset to pay down the capital, whilst paying 0% interest :j. So the present mortgage payment can be switched to add to our monthly savings for budgeting and our ISA investments, rapidly accumulating the emergency pot but in a better interest earning account.

In summary:
We should clear the mortgage in December 2012, when DD is 15yrs old (one year ahead of target and thus 3yrs before she is 18)
We should stop paying interest on the mortgage no later than January 2011 :beer:
The monthly payment diverted from mortgage to savings from that date should mean £11.7k plus interest earned by December 2012 alone.
:j

I think this has really helped to get a good picture on where we'll be over the next couple of years. Of course, any improvement on this is simply "cash in the bank" to us.

It does leave me with one very serious problem.... once we have cleared down the mortgage, how will I feed my spreadsheet habit