The journey to financial independence.

A question about : The journey to financial independence.

Hi,
In 2012 I took out a 30 year Ј166,500 mortgage @ 6.4% with my now husband. We were cautious after hearing so much about how expensive it is being a home owner. A few months in it struck us after using the mortgage overpayment calculator here. In 30 years we would have paid more than double the cost of the house to the bank! That day changed our min set (thank you Martin!)

We immediately starting over paying Ј50 then when we could Ј200 a month. We recently renewed our mortgage and took the term down from 28 to 19 years with an interest rate of 2.5% (what a difference!).

Our aim going forward is to over pay Ј350 a month. If we maintain this it will knock off another 6 years. We did talk about reducing the term further but decided we liked the flexibility of overpaying even though to date we have never needed to cancel an overpayment.

Wish us luck at this rate we will be mortgage free by my 40th birthday!

Best answers:

• I missed out a few bits I see looking at other peoples posts. I see it's full disclosure here, so here goes....
  At the beginning of the year we had a Ј1000 and Ј1500 over drafts and Ј1000 on credit card. (Total Ј3500) post wedding, new house, student debt.
  With a little bit of organisation and the money and time to sort it we are down to Ј0 and Ј900 overdrafts and Ј600 credit card. (Total Ј1500). We also have Ј2300 in ns&i so far this year which we cannot bring ourselves to use to clear debt because it just feels like a step back!
  Anyway again.. Wish us luck and any helpful hints and info would be appreciated.
• Interesting fact for today....My fear is that by over paying I will miss out on life and fun. I talked to a friend who told me Tesco Club card points are worth four times more if you 'boost' them. I called up Tesco and I have Ј49.50 of unused vouchers I've changed up Ј5 which is worth Ј20 in pizza express (can only be used on food nog drink) and I am going to do this every so often to be our treat for all our good saving!
  MFW 1 - boredom 0!
  I will keep you posted for any other good ideas.
• Hi all,
  Today is my favourite day of the month, the day when my bank calculates the interest and everything minus what we have paid that month and I see how well we have done. This month more than Ј900 off our mortgage! Two years in and I'm an addict I'm sure. So please I found this site because it is helping the addiction for the last 4 days!
  I've started my Christmas presents already. Two years ago a friend and myself made jam, chutney and chocolates as presents which were very successful and really added to the festive spirit in the lead up. This year we are making for 14 couples: spiced beetroot and orange chutney because it was so popular last time, chilli jam, festive chocolates, fudge, mulling syrup and salted caramel vodka.
  We have already purchased the jars, bottles and festive print cellophane bags costing Ј25, Ј23 and Ј3 and have estimated if we buy all the ingredients in Tescos it will cost Ј60. Which works out as less than Ј8 per couple. Which is well under my normal Ј20 per person budget for each friend/family member. Feeling pretty good about that!
  Any way best go. Onward and upward fellow MFW!
• And home made pressies are definitely the best
• Welcome to the boards. Home made Christmas pressies are great. I plan on doing some of those this year.
  I think finding the balance between overpaying and the addiction that comes with it and having a life to live at the same time. It's just a case of finding out what works for you without going without too much so you end up spending far too much because you rebel etc. A monthly / weekly treat or a treat when you reach certain targets etc are a good idea.
• Thanks I think that's a good idea. I will have a think and plan some nice treats like nights out and trips basically something to look forward to each week/ month.
• Another vote for having a life whilst OP-ing here - it's all part of memory making and keeping life fun. Balance is the key
  x
• Hi all,
  I've had a day off today, one of the perks of shift work. I decided to have a productive day and rang round some of our bills (mobile phone, house phone and internet, home insurance and life insurance. I asked each company if they would reduce my bill and explained that our outgoings were too much at this time. All bar the life insurance gave us discount. I am so pleased. Each one gave us about 10%. I was so impressed because none of them were up for renewal. The life insurance did allow us to amend our cover which reduced the cost. We now have a slightly lower payout on death or injury and still probably more than we will need.
  Nearly one week in and I must say I am feeling very clear about finances and feel more organised than ever before.
  Any ideas what to do next to save the pennies?
• I will work the outgoings out and get back to you in the next few days. I was sort of putting off doing that out of laziness but having said that into I do love a spread sheet.
• SOA coming up. DH and myself have never monitored our spending on clothes, food shop or going out but have agreed to trial for a month a Ј30 a week each spending money and Ј50 for both of us to spend on our weekly shop. These figures may change as we have no idea if its too much / too little.
  OUTGOINGS
  Gas 58
  Electric 72
  Water 33.34
  TV 12.12
  Life ins 39.38
  Home and contents ins 37.25
  Council tax 128
  DH and my Mobile 88
  Internet, TV, landline 36.61
  Mortgage 879 + 400 overpayment = 1279
  Spending money 240
  Food shop 200
  TOTAL Ј2223.70
  INCOMING
  DH 2000
  Mine 1700
  TOTAL Ј3700
  REMAINING MONEY
  Ј1476.30
  This has actually been quite a eye opener. Considering I have not declared the money both DH and myself get when we work antisocial hours and for overtime. I cannot believe how much money we have wasted over the last two years.
  Plan for this week:
  -Go to cash point and take out Ј30 for each of us.
  -Take all cards out of our wallets.
  -Do online shop to ensure we have food in to achieve this plan
  -Make more soup and freezable dinners to prepare for the week ahead.
  Any advice welcome.
• Sorry forgot to add Ј163 for DH bike repayments and Ј23 and Ј27 for our gym membership. Bringing our remaining to Ј1263.
• Sounds like you have a good solid plan and are making great headway into your MFW journey already!
  Jodles
• Hi Cream Tea!
  It is staggering the amount of interest you pay on mortgages! Im glad its been eyeopening for you.
  Try using this Statement of Affairs calculator its quite in depth and may make you realise where you're spending money you dont recall:
  https://www.stoozing.com/calculator/soa.php
• I agree struggling youth. My mortgage interest was worse a few months ago at 6.4% it was only last month that the interest went down to 2.49% one of the more satisfying days of my life!
  I'm going to have a play around with the calculator and see what to do. I will check in later in the week for update of how this weeks plan works out.
  CT
• Right then, I recon you could squeeze that lot!
  Just a quick glance at those outgoings and it seems to me you are paying too much for your home and contents insurance. Ј37 a month is loads! Make sure you get a few quotes as ours was Ј80 for the year. Remember not to over insure as its a waste of money.
  Mobile phones also seem an awful lot...are you locked into contracts for that Ј88?
• Hi Cream Tea.
  Just had a read through and loving your organisation. I'd not thought of just ringing the normal bills and asking if they could reduce it at all to make it more manageable.
  Using cash instead of having your cards handy is also a good way to stop spending so removing cards from wallet/purse is a great plan.
  Keep up the good work. I'll be reading
• Hi Cream Tea,
  Looks like a good start, Ј400/month overpayment will make a big difference.
  As far as bills go, gas and electric seem pretty high, electric particularly, I'm presuming your heating is all done on gas. Probably worth checking with the utility company to see if the payments match your usage or if they're just building up a big credit earning them interest instead of you! (Just found out my gas account has Ј150 quid sitting in it!)
• JimLad, I'm off today and tomorrow so I will have a look around and see what I can get for home and contents insurance. I'm paying Ј364 more than you a year!
  VinnyBro1988, I love being organised I just am not so good at keeping it up month on month. I'm hoping this diary will keep me focused. Bank cards at home is currently a winner.
  Philhbug, our gas and electric were worse before they took it down now we have to pay extra each 6 month to make the difference I've started giving readings but we have a very old boiler and small radiators (something we are saving to replace) so I think this is not helping the amount we spend. I think I need to shop around something which fills me with dread it seems like such a massive task.
  So far money taken out the cash point and cards removed from wallet achieved. Day off today so will be making some soup and cottage pies.
  Keep up the good work team MFW.