Eagerlearners journey to Terminate the mortgage

EagerLearner · 22 August 2018 at 8:36AM

Hello everyone :j:j:j

I read the diaries here with interest and they are so motivating, I thought I would start one of my own and see where the journey leads me.

I am 42, married and we have a little boy and a cat. We live in the south so it's expensive, but I can't see wanting to move away anytime soon, so our mortgage journey will not necessarily be short, esp as this is our first home (thanks to the 2009 credit crunch). We have paid off quite a bit since 2009, we had a reasonable deposit which meant our original mortgage was £135,400k.
We fixed this past January to a 5 year deal at 1.69% with Scottish Widows on repayment, which has made a pleasing difference to our monthly interest (was 2.49% from memory). In 2015 we were paying £229 interest a month and we are now paying £122, which is £3.94 per day. We have an offset account with SW also which is where I am planning to overpay. They do allow us to put 10% of the balance in once per year but I see no point in doing this, preferring to have the cash accessible if needed (especially with Brexit fears etc).

I will start with my SOA, which as an MSER I believe is lean but if you see any pickings please do let me know:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 1
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1900
Partners monthly income after tax....... 900
Benefits................................ 82
Other income............................ 250
Total monthly income.................... 3132

Monthly Expense Details
Mortgage................................ 517.9
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 140
Electricity............................. 31
Gas..................................... 32
Oil..................................... 0
Water rates............................. 34.53
Telephone (land line)................... 50
Mobile phone............................ 13
TV Licence.............................. 12.37
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 230
Clothing................................ 20
Petrol/diesel........................... 70
Road tax................................ 12.25
Car Insurance........................... 20
Car maintenance (including MOT)......... 10
Car parking............................. 5
Other travel............................ 5
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 20
Pet insurance/vet bills................. 8.85
Buildings insurance..................... 6
Contents insurance...................... 6
Life assurance ......................... 37.4
Other insurance......................... 19.05
Presents (birthday, christmas etc)...... 40
Haircuts................................ 15
Entertainment........................... 20
Holiday................................. 90
Emergency fund.......................... 10
Total monthly expenses.................. 1515.35

Assets
Cash.................................... 6600
House value (Gross)..................... 285000
Shares and bonds........................ 17206
Car(s).................................. 1000
Other assets............................ 350
Total Assets............................ 310156

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 89401....(517.9)....1.69
Total secured & HP debts...... 89401.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 3,132
Expenses (including HP & secured debts). 1,515.35
Available for debt repayments........... 1,616.65
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 1,616.65

Personal Balance Sheet Summary
Total assets (things you own)........... 310,156
Total HP & Secured debt................. -89,401
Total Unsecured debt.................... -0
Net Assets.............................. 220,755

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

I am self employed so my income varies every month so the above is based on averages. We have £5600 in our offset account and I am to put £200 to £300 a month poss more.
We have both decided to reduce our pension payments somewhat, to overpay for a short while maybe 6 months, to build up more reserves.

Hubby is in the midst of a huge career change which has involved retraining and huge expense, so we are nowhere near the £400 overpayments we had been doing the past few years. He will still have a couple of years of lower income, so we are being very careful and not spending, planning ahead for retirement and for our sons education etc.

We manage our budget with tight reins via YNAB which I started to use in 2015 and find amazing, it works with my brain type as I enjoy pleasure delay and am generally the one that manages the budget anyway. Thankfully hubby has the same dream I do of being mortgage free, so we both head in the same direction as a team and try to educate our son in mse ways along the way.

One of our fave hobbies is car booting, where we always have a running list of things we need in Evernote. We love reading and I read lots of finance books, Millionaire Next Door and Richest Man in Babylon are 2 of my faves, also love Rich Dad Poor Dad which although US based, seeing the cashflow quadrant diagram literally opened my eyes as to seeing clearly even though I thought I was MSE.
Since that moment we have gone from starting YNAB in 2015 with a negative net worth of -£40k, and my only aim was to be mortgage neutral, where you hold as much in investments etc as you do your mortgage debt. We reached that 2 years later in Aug 2017 and are now at £13k net worth.

I love the Terminator movies (the first 2, only proper ones) so aim to be like Sarah Connor in my no nonsense approach to terminating the mortgage ha.

So I hope you will join me as we try to knock little bits here and there off, and anything I learn I will pass on here on the thread. :beer:

EagerLearner · 22 August 2018 at 8:51AM

MSE actions for today are:

- Send off ID for tesco cc application (£40 on quidco) - DONE
- Check Quidco latest balance - DONE £104.13 tracked hopefully can cash out before Christmas
- Reconcile YNAB - DONE
- Check Consumer Pulse points balance (usually get Argos vouchers for Christmas when I reach £10) - DONE - 7150 points, should be able to cash this out in 2 weeks or so
-Check Uown balance re property investment - DONE - won't get rich quick but at least we are not losing money!
- See what options we have to reduce broadband/tel/tv - we have a very basic package with Virgin + decent internet but still seems high

Other:

-Return MiniEL library books - DONE
-Repeat prescription - DONE

Feeling very motivated, we have a small trip away at half term to plan for but other than that we can start to budget for Christmas now. I need to work as many hours as poss for the moment, and make hay whilst the sun shines!

mikenolan · 22 August 2018 at 10:00AM

I'm guessing telephone at £50/month includes internet but that seems a little on the high side - is this fibre or does it include some TV?

You mentioned about repeat prescriptions - if you have a couple per month then it's worth getting a prepayment card.

And it's more than a little pedantic, but child benefit works out at slightly more than the £82/month you've budgeted for when it's averaged across the year.

EagerLearner · 22 August 2018 at 10:15AM

Thanks Mike,
Yes Tel is high fibre, includes basic packages, hubby checked and it's similar in cost if we take off the tv element, so not worth it...
I do not pay for my prescriptions so this is ok. have budgeted £20 overall for health really I guess.
Gottcha on child benefit and yep it's a little more than that.

Post office all done, aiming for a NSD tomorrow and hopefully no need to use car.

greent · 22 August 2018 at 12:58PM

With things like CB where its paid 13x/ year, I like viewing that 13th payment as a bonus - if you have the budget capacity to keep it out of your monthly figures it can then go on something one-off (an extravagant day trip, say) or as a bonus OP

EagerLearner · 22 August 2018 at 2:26PM

Ooo GreentT you are right, I just checked ynab and looks like in Oct last year we got 2 payments a week apart. Hubby and I agreed that all CB from now will be for Christmas so it's planned to be useful. Usually most goes to overpayment as we already save for miniEL and have a pension for him too (I know,ott perhaps)

EagerLearner · 22 August 2018 at 2:31PM

I think our 'Needs' spends above are pretty solid, so the 'wants' is where I could poss reduce. Ordinary month would be £350ish, £40-£50 ATM, eating out a little £20, birthdays , days out, house improvements etc.
Also work costs go in there, I have been thinking whether to take out my business account completely as it skews the figures somewhat and I now use Quickbooks for my work stuff anyway. Hmm.

starnac · 22 August 2018 at 5:14PM

Hi EL you seem to have things on track. I look forward to following your journey

EagerLearner · 22 August 2018 at 5:29PM

Thank you Starnac, thanks to MSE over the years we defeated an evil landlady (big post on here) and saved for our deposit, it's been a wild rise and we now have a 7 year old.

A big drive for me is for us to pay off as much of the mortgage as poss so that our next move in a few years will be easier, esp as I am self employed as far as affordability gos for getting more borrowed. Another reason is so that when our son hits his teens, we will hopefully comfortably be able to help him a little on his start to the big wide world - neither of us had any such thing when we grew up. I do know that too much help is a bad thing, so we're aiming for a fair balance.

Today I have worked my little socks off, but also pushed forward internal business stuff ready for Autumn as well. Lots of technical income is then being reinvested, hopefully will pay dividends in the future.

Have ordered from the Poundland site based on the 15% code in today's email and was careful to check but I think most things ended up a good deal. They do not allow 2 codes to be used, so I could not get free delivery on £40, but did get £6odd off. Things like 18 packs of crisps for £0.85p, pack of 20 strong bin bags, Aussie conditioner, peanut butter (which the boys inhale), bourbon creams (600g per pack!!!) lunch snackbars , cheese crackers (350g tub) and various nice shower gels were also snapped up for £0.85p. All will last months so very happy with that.

Off to tidy up a bit and watch bad tv, night all!