I had owned homes since I was 19. Lied as you could back then to get a mortgage, bought dumps to do up, sell on and progress....living on beans on toast and doing without TV along the way! Well, you do what you can to pay that mortgage and save.
At one point I had a full-time job, 2 part-time jobs and volunteered....oh the energy one has as a teen and into early 20s.......!
I worked for private companies so didn't have a pension, the houses were my nest egg. I faltered twice along the way with housing crashes, but it all came good in the end.
When I met my husband I had a three bedroom semi with a small mortgage, a fair chunk of equity from doing it up myself and some savings as a cushion in case the roof or electrics needed replacing....you know how it is!
My husband had only recently started on the property ladder again after the break-up of his marriage, he had a 2 bedroom semi with a large mortgage and very little equity. His mortgage was also one of those that if you pay if off you pay a penalty.
He worked full-time for the NHS so had a good pension in the pipeline which he had improved by adding extra years.
We both had 2 children.
Mine were the eldest and youngest, his, the 2 middle ones....but they are all ours. We had known each other for 10 years as friends before we got together, so we all knew each other and the children were used to spending time together and playing....of course living together was a different thing altogether....the novelty of an endless sleepover wore off!
We all moved in to my house, sold his, used his equity and my savings to pay off my mortgage and put his mortgage on my house so that we didn't have to pay that penalty. That gave us the money needed to build a loft conversion and increase my house from 3 to 5 bedrooms to house our family and also to replace my savings for those rainy day repairs and buy a used 7 seater vehicle to transport our brood.
Shortly after this we also opened our own business, an Out of School Club, this gave me a salary and childcare and as the Director he was able to top up his salary with Directors drawings and dividends from the company.
Over the last decade we have paid off about £40k from our mortgage and saved and invested what we had and what we saved along the way to give ourselves a healthy savings pot. We have opted to keep the mortgage rather than pay it off because we earn more from investments and interest on our savings than we are paying in interest on our mortgage, so we may as well keep the money to make more money!
We now have a house worth around £400k and sufficient savings to pay off the mortgage and have about £50k left over.
So the plan now is to swell the savings pot and also to take stock and see what we can get rid of in terms of outgoings so that we can get an idea of what our spending will be like when we move so that we can plan our income and outgoings..... both now and into the future.
We both work, hubby for the NHS, building that pension pot and me for a friend as Business Manager in a care home for elderly people living with dementia. Our business closed in July of this year, after 9 years we were given Notice to Quit the premises at our local school. It seems our business had been put out for tender without our knowledge and therefore we couldn't tender! It comes to something when a rival school sends their condolences that you are closing before even the owner knows!!!
Anyway, it was somewhat of a blessing in disguise as I had been ill for a couple of years and was finding it all a strain, but didn't want to let parents and children down. At least this way, although underhand and unpleasant, it was a guilt free way for us to close and move on...which we have!
We went through our bank account and credit card bills.
We cannot get rid of the council tax or TV licence, those things are quite set in stone. The mortgage was at an excellent rate already and my husband always shops around for our insurances and utilities, so those rates were as low as we could get them, the only thing we could affect is the usage on water, gas and electricity. We both have to have cars, both are regularly serviced and in good running order, sourcing cheap petrol is about all we can do there.
Food, it's a biggie! We always shopped at Tesco for ease, but we decided to give Lidl a go. Whilst we still use our local butcher for the little meat we do use and we always buy organic milk and we need some specialist food for an intolerance, swapping to Lidl has made a huge difference to our food budget. We also cook from scratch, even baking our own bread (which we calculated costs 59p per loaf!), batch cooking also helps. We currently reckon that for 4 of us to eat well for a week costs around £75.....but we are still working on that...watch this space!
Then there were hobbies, magazines, meals or drinks out....
I stopped both of my magazine subscriptions....and yep...don't miss them in the slightest....I've reduced my paper waste and if I want the latest ideas I can Pinterest it! Hubby got rid of his 2 subscriptions and the Saturday newspaper delivery.
We have a Tesco credit card, so our points build and we use those for holiday cottages...
and also for vouchers for meals out at our youngest daughters favourite restaurant.....
We pay off the credit card in full every month, if you are clever with you timings, you can get over 50 days interest free credit...
So we went through the credit card and worked out costs of drinks out, hobbies and clubs, clothes and shoes, haircuts....you name it, we listed it. We have worked out cheaper ways, making things last longer or simply not bothering with it anymore.
That's not to say that if we fancied popping to the pub for a swift half one evening we would deny ourselves, of course not. But its a case of doing it less frequently...finding alternatives....
We found ourselves a plastic wallet and we have made a spreadsheet (you could just note it in a notebook like we did the first ever time we did this). I can say, that when you have to write down what you have spent your money on, you think twice about it if you can find a better use for it or if you feel the need to justify to your better half why you spent it! Believe me, lots of magazines, craft items and shoes went back on the shelf!
Did I miss them? NO.
Did I need them? NO.
Am I pleased I didn't bother? YES!
Whilst we couldn't do much to reduce the outgoings such as mortgage, utilities etc. We managed to reduce our food bill and also to reduce what was going on our credit card....in fact it went from almost £2000 per month to £1200, and we are still working on bringing this down more.
In addition all this stuff we had that was taking up room and we would have to pay to move to a new house....time to declutter, time to decide what we truly loved.
I have an eBay account and in the first few weeks of auctioning, I had made £100. This was not brand stuff....remember, I don't do brands. This was craft stuff, childrens clothes they had grown out of, unwanted gifts, outgrown books, puzzles and toys....also CDs, games and books went off to companies like Momox and Ziffit...another £60+ in the kitty.....these items were nothing special...just our 'stuff' that was in reasonable condition that we no longer used or wanted.
Why not start today and see what you can sell or donate...if you need help deciding, why not try a declutter prompt like these....
You'll be surprised at what people will buy. If you can't be bothered or don't need to make the money, how about sending it to a charity, but if you pay income tax, use your Gift Aid to increase what they can make on your stuff.
Next time I'll tell you about our food planning and budgeting and how to have cheap or even free fun!
It might all sound a bit sad...but I promise you, we have fun doing this....it becomes obsessively exciting and to top it all, we both plan to retire next year at the age of 51! What's your goal? Retire early? Pay off your mortgage? Clear debt? Save for a special occasion?
Hope to see you next time,
Bye bye
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