Second Time Lucky

A question about : Second Time Lucky

Hi,

Having got very close to becoming mortgage-free (about Ј8000 remaining) on our first house, we will soon be moving into the house that we intend to live in for a very long time, which means taking on another mortgage.

I have really enjoyed reading everyone's diaries over the past few years and think it will be motivational to record our progress once we move in and start to overpay. I expect it will be incredibly dull to read for others so I hope nobody minds me taking up internet space.

Background - a little about me

My husband and I have been together since we were teenagers but we don't really share the same financial opinions. He is very laid-back with money and will spend it if it is there, but he's happy for me to budget how I see fit and trusts my financial decisions. I suspect I could remove Ј10,000 from the savings account and he wouldn't notice. I grew up in a household where every penny counted and for a time we relied on government benefits, so since being very little I have been very debt-averse and have always saved.

We have both worked since we were 15 and during university we lived with OH's parents. Things didn't go quite to plan with my career due to illness so we stayed there rather longer than planned, but they very kindly allowed us to live rent-free as we were saving for a deposit.

In Spring 2011 we bought our first home with a large deposit from our savings. The plan was to stay here for 5 years and pay off the mortgage (OH was still training when we bought but is now qualified and employed) but we realised we didn't want to keep waiting to have children and we wanted to move somewhere bigger first.

The Mortgage

Our new mortgage will be Ј70000 on a 2 year fix at 2.64%.
Monthly payments are Ј500.

The short-term plan

The house needs work but we want to get into the habit of overpaying and knock a nice chunk off before we have children (hoping to adopt next year) so the initial plan is:

50% of anything left over to overpayments
50% to be split between various savings pots
Aim for a Ј10,000 emergency pot

Having been mega-frugal for a very long time I'm quite bad at spending money and if left to my own devices I would probably cut back on everything and overpay as much as I can. However, I'd quite like a nice house and the occasional holiday so by choosing 50% I can't go overboard.

Of course we might uncover all manner of things at the new house so I'm not setting a figure to aim for at the moment. Once we have moved in and worked out how much it will cost to run I will have a better idea.

The long-term plan

To be mortgage-free by the time we are 40

Best answers:

• I spent a lot of time yesterday thinking about vegetable growing. One of the plans for the new house is to take advantage of the south facing front garden and make a little plot. The neighbours have very tidy and neat gardens so ideally it will be a fairly pretty vegetable plot!
  I started reading a book (free on the kindle) about square foot gardening and it sounds perfect! Instead of digging the whole thing over as planned, which would have taken weeks, the idea is to create a 4ftx4ft (or 4ftx8ft if we have enough room) raised bed, split it with string into 1ftx1ft squares, and then plant something different in each square. We'll never grow enough that we don't need to shop, but if we could grow the more expensive things we might eventually save a little money. It'll also be lovely to be able to pick it and cook it the same day.
  Cost-wise, I've just been chatting to my MiL who has a number of raised beds, and she knows a man selling scaffolding planks for about Ј4 each. We want to make it double the depth and I'm not sure how long they are but even if they're very short, we're looking at less than Ј50 for a 4'x8'. The big cost will probably be the compost. It's suggested that you use a third perlite (just looked at the prices ) a third peat/coir and a third top soil/compost. I'd rather not scrimp on this as obviously the better the soil, the better the veg!
  Aside from that we'll need seeds/plants, but I'm hoping we can make the most of having parents in law who have an allotment and get their leftovers.
  It's rather exciting learning something new! I'll need to become knowledgeable in companion planting and how to make the most of the plot without it sitting empty.
• I thought I'd make a list of things we would like to save for over the coming years and hopefully we can tick them off one by one whilst still overpaying.
• New boiler - replace the ancient emersion heater and boiler with a modern combi boiler Ј3000-Ј4000 (not had a quote yet but seems to be the consensus)
• New bathroom - remove the champagne suite with broken taps and shower, the polystyrene ceiling tiles, and the 1970s wall tiles. Re-plaster, electric underfloor heating, tiled floor, half tiled walls and a new white suite Ј5000-Ј6500 (really hoping for the lower end but as it'll be with us for many years we want it to be just how we like it)
• Double bed - we're leaving ours behind Ј500 (considered a Ј170 argos bed but we can save and sleep on the sofabed and get a beautiful antique one)
• Bedside cabinets - Ideally something to match the bed Ј200
• Garage roof - remove the asbestos roof, check the stability of the frame, use polycarbon for the less accessible side and have a sedum roof on the other Ј??? - I would imagine quite pricey if we get someone in to do it
• Tumble drier - cannot wait! Ј200
• Solar panels - This might take a while to save for! Ј7000

I'm sure there will be lots of other things. The boiler is necessary and I decided that as we need to replace the bathroom, we may as well spend a few thousand more to get something we love. I don't generally get excited by bathrooms but if I have to have strangers and mess in the house for a week or two, I need something to make me excited to get through it.
Now we know we're staying put, it's really nice to think about good quality things that will last 30-40 years. And I quite enjoy having to save for things as I enjoy them more when they arrive.
The boiler is already budgeted for and hopefully after all of the fees have been paid we'll be halfway to the bathroom refurbishment.

• Just done a little research and may have saved a bundle of money in the process!
  Instead of spending hundreds of pounds on compost and whatnot, we can build the raised beds and then gradually fill them with kitchen scraps, newspaper, dead leaves etc. This is probably very obvious but it hadn't crossed my mind. Then a thin layer of compost in the spring and we can still grow a lot of veg that doesn't need a foot or more to grow into in the first year. As we go we can keep topping it up.
  Must consider a compost bin and water butt too, but not sure where they would go at the moment.
• hi amycool, we built some raised beds from cheap decking and filled them with some topsoil that was going spare at a building site. then just spread 3 bags of compost (3 for a tenner at asda) on top. enough this year to grow things on top. Used tesco vouchers for garden company clubcard deal and got a pile of seeds that way - meant i grew things i had not thought of before.
  It's great going into the garden and picking tea.
• Hi Thrugelmir! Believe it or not, my Mum's tumble drier was 31 years old when it finally died last year! .
  No, I'm not expecting everything to last that long, but I like being able to plan in the long term and invest in quality things knowing we won't be moving out in a few years. The garden particularly excites me as the last two gardens had to be left behind.
  Hi kirstypark! It's good to know that it needn't cost a fortune to get going. I remember the excitement of our first corn grown in a pot and cooking it straight away.
  Thank you both for posting. I must work out how to subscribe to the diaries I've been reading and get to know a few names.
  Got a bit more packing done yesterday. Getting impatient for the house to exchange so I can organise everything. We were told end of July for exchange but that seems highly unlikely at the moment!
  Oh well, I can still make some plans for after we have moved.
• Hi Amy, I'm impressed by your plans. Our local council offers two free bags of compost per household that are created through green recycling. I also picked up 50p packets of seeds for mixed leaves from pound stretcher that have been supplementing bought salad for the past month or two.
• Thanks INOD! I just looked up our local council's compost and sadly no free bags. They do 60 litres for Ј4 or 180 litres for Ј9.97 which is about 50% cheaper than our local DIY store. Aldi had loads of veg seeds yesterday but I'm refraining from buying anything until we've moved or I will no doubt lose them all!
• After watching Jacques Peretti's series, "The Men Who Made us Spend" over the past few weeks, it got me thinking. I've never been a big spender, but I have noticed that as I have become older and more content with my life my urge to spend has diminished to almost nothing.
  As a child we would spend hours looking at catalogues and thinking about what we would buy if we had the money. Then as a teenager I went through a stage of buying "stuff" and collecting things, before realising that it was mostly tat and wasn't making me any happier. Looking through my old spreadsheets (I've kept them since 2003!!) I find that a few years ago I stopped buying things and switched to experiences like gig tickets or items for hobbies like yarn and plants.
  So far this year (out of my Ј70 a month frivolous spending budget) I have spent a grand total of Ј46.57 on things for myself!! This included a pair of running shoes in the sale, top-up for my mobile phone, and stamps. I probably could have got away with putting the latter two in different columns! In comparison, I have spent Ј327.35 on gifts and Ј24 in charitable donations.
  I spoke to my husband about it and he feels the same. Neither of us can understand that feeling of needing a smartphone or getting very excited over a pair of shoes. I suppose partly it might be that we have become a little wiser but I like to think that we're just a whole lot happier.
• Just checked the bank account and something odd has happened! My OH has been paid Ј250 more than usual!!! Either:
  a) there has been a glitch and we'll have to pay it back
  b) he was owed some expenses that we'd forgotten about
  c) he's had a huge payrise and nobody thought to tell him
  Please let it be C!!!!!!
• Even b would do.
• Hi Amycool,
  I look forward to following your journey. Did you get to the bottom of the mystery overpayment of salary? Its always a nice surprise when things like that happen-I get excited when I find a tenner in a pocket that I had forgotten about. Actually that happens more often when I'm emptying DHs pockets for the wash but still....
  I'm going to be following your planting with interest, I've just finally got around to building a planter for the garden and filling it with soil. I have some seeds for beetroot, broccoli, carrots and errrr....sunflowers (not that we'll be eating those!) I have no clue what I'm doing though so please pass on any tips you get!
• Hello, just been reading your diary,
  I think you've got a good balance between overpaying, home improvements and things for the house, and 'experiences'
  We're gradually expanding our fruit and vegetable growing. We're currently growing in pots on the patio, but hope to move on to a raised bed next year.
  Good luck with your plans.
• I've been awake since 4.30am so decided to just get up! I don't start work until 10 today - very annoying!
  So, was it a, b or c? It was d!!
  The payslip says something about a travel allowance. My OH found nothing about this in his work info but apparently George Osborne came up with the idea. We're still not 100% sure how it works so I've asked him (OH, not George Osborne) to ask payroll. Don't want them to ask for it back after it is spent!
  I must admit I was really hoping it was a backdated pay rise but I'm happy to take a free Ј250..
  In veg plot news, I made a plan based on 4ftx8ft (not sure exactly how big the garden is yet) and next I need to check that it will work. Some plants take lots of nitrogen so I don't want them next to each other. I've put various herbs in too - some that we use in cooking and some that are good for insects.
  Supadupa - the sunflowers will be great for bees and look amazing so worth growing for those reasons alone! I love sunflowers and I like the idea of having pretty plants amongst the veg. From my experience of gardening, my tip would be to expect a lot of failures and then be surprised when things grow. I always make the mistake of planting out too early and everything gets frost damaged or wind damaged or slug eaten! This year would have been great for a first year as it's been so warm.
  Goldiegirl - thanks for posting. I'm trying very hard to find a nice balance now. I have a chronic illness that gradually gets worse so I've always been very mindful of the prospect of unemployment, but now my husband has a fairly steady well-paid job (after 10 years at uni!) the pressure is off a bit. I'll never be a "live for the day" kind of person as it's not in my nature but equally I don't want to waste the health I have. It works fairly well as I can't do a lot of expensive things anyway!. Long haul flights, scuba diving, sky diving - all out!
  We did sweet corn, courgettes and tomatoes in pots last year but it's nice to have something a bit more permanent.
  It's almost normal waking up time now. No idea how I'll get through work...yesterday was insanely busy!
• Went to sign the contracts yesterday so hopefully exchanging early next week. I can't really be a MFW until I get the new mortgage. :-)
  Did some home insurance comparisons which ranged from Ј180 to Ј68 if you count cash back. We paid something like Ј130 this year so I'd be very happy with the lower amount!
  I was tempted to switch phone/internet providers but we've opted to stick with the one we're on in the hope that we'll be back on-line quicker. OH sometimes works from home so can't cope without it!
  Had an expensive but lovely day yesterday. Drove 25 miles to a beautiful spot in Yorkshire where we hired a bike (I took my folding one) for Ј13. Car park Ј4.70. Ice cream and a can Ј3.90. :-) Well worth it for the silence and did 18 miles so feeling fitter today!
• Feeling ever so slightly (massively) stressed at the prospect of moving house. Spent the morning boxing more stuff up and taking yet more stuff to the charity shop/tip. Then we decided to bring the big scary heavy bits of furniture downstairs as we don't want to be doing it on the day. The 1930s wardrobe wasn't as bad as expected but the sofabed was horrendous! We ended up getting wedged in at the bottom of the stairs and OH had to dismantle it whilst I held it up. How we originally got it upstairs in one piece is a mystery. Everywhere is a total mess but I'm now too tired to do anything about it. I think tomorrow I need to get on top of everything. I suppose the worst thing that can happen is that we take all day to load up the van and spend another day unloading it, which isn't that bad. It'll be worth it once we're in.
  In mortgage news, my old mortgage is now at Ј7411.29 and of the Ј458.65 payment only Ј34.54 was interest. Ј1.11 a day. It's almost painful to think that next month that will be about 5 times larger!!
  In good news, I realised I had miscalculated (hopefully) how much we'll have left after all the fees have been paid. It's the second big spreadsheet mistake I have made in the past few months (forgot about the ISA last time!) - I must be more careful! At least I was overestimating costs rather than underestimating.
• Now I have all the numbers in for July, I am flabberghasted at our grocery spend!
  There's just the two of us so we normally spend somewhere around Ј130 a month for food, toiletries, cleaning supplies etc. However, after deciding to eat more healthily the total for this month was Ј164.52! And that doesn't include some fruit that I bought with my own money.
  I suppose the question is whether the extra fruit and veg is worth Ј35 a month to us. We also had slightly more waste than usual as things went off before we could eat them.
  I know lots of people on MSE do meal plans and it saves them both money and waste, so perhaps it would be worth a try. It's tricky because my OH is the resident cook and he rather likes making it up as he goes along so doesn't like the restriction of a plan. Perhaps we could have 3 days planned each week to start with and see how it goes?
  Of course, once we get the veg plot going we'll be fine!
  Could do with looking at the best way to store things too. We had a small pantry in the new house so if we could get some of those wooden slatted pallet things the fruit and veg would almost definitely keep better than in a plastic bag.