When I first woke up to the positives of being financially savvy, and starting to overpay the mortgage, I posted regularly on the "Mortgage free wannabe" section of a well known and deservedly popular website's forums. I've sung the praises of this particular site (and its forums) regularly, and shall continue to do so, but ironically, this particular forum was very nearly the cause of me giving up before I had even really started.
We initially started by saving money to pay off a car loan early, and overpaying tiny bits - literally £10 a month to start with - on the mortgage. Initially the forum board and the regular posters on there proved to be a great source of support and inspiration - many people were sacrificing absolutely everything to put every penny they could to their mortgage. there were incredible stories of people paying down their mortgages in 3 years...but gradually I started to feel a lingering sense of questioning as to why I was there. I was still taking holidays, going out with friends, we were having takeaway occasionally and the bulk of the money we were saving was going to pay off the loan in the short term, not the mortgage. Even though the overpayments were gradually creeping up - £50 per month, £70, £100 - I still felt that slight awkwardness, I wasn't *quite* dedicated enough to be playing with the big boys - I was still having treats and enjoying life so clearly I didn't really have quite the same enthusiasm for the task at hand as others did. I began to feel that maybe that unspoken question was valid - perhaps I really DIDN'T have the determination to see it through?
A friend reminded me of a couple of pertinent sayings "Slowly wins the race" and "there's more ways than one to skin a cat" - and both of these hold extremely true in the world of frugaldom and mortgage overpayments! It's easy to get terrified when faced with a group of people who are all throwing more money every month at their mortgage than you even earn - but just because you can't do the same doesn't mean that you're not making a difference. Even a £10 per month overpayment on a mortgage over 25 years will knock a bit of time - and a bit of interest, more importantly - off the final due date. Remember also it's important to try to get some savings behind you - budget carefully for not only regular monthly outgoings, but also for "big one-offs" like insurances, car servicing etc. Then save an "emergency fund" - ideally of 3 - 6 months money - so that if the worst should happen and someone ends up not earning for a while, you can still pay the bills. Then, and only then, start working on chipping away at "the big one".
5 Easy ways of paying a bit more to your mortgage:
- In February & March most of us pay no council tax or water rates - pay this as a lump-sum to your mortgage in these months instead.
- Challenge yourself to a "Frugal Month" - I'm going to be doing this in February. Pay whatever is left in the current account at the end of it to the mortgage.
- Set yourself a monthly grocery budget and then see how much you can save of that - pay whatever is saved to the mortgage.
- Search out a cheaper deal on gas, electricity, TV or telephone - pay the amount that your monthly Direct Debit reduces by to your mortgage as a regular overpayment. By the time you've done all of them this can really add up!
- Save to be able to pay insurances annually rather than in instalments - typically you pay £1.50 - £5 per month extra to spread payments across the year - so that saving can be added to your mortgage pot too.
We have no plans for sacrificing our annual trip to the Hebrides, our second car, cheery trips off with friends or occasional nights out for the sake of scrimping, saving and throwing every last penny at the mortgage. Our view is that you never know what is around the next corner, so we will continue to have fun today "just in case" there is no tomorrow. If anything happens to either of us then the mortgage is paid off in any case - we have adequate insurance to be certain of that - and where there are things that we both want to do, see or visit, we'll jolly well do, see and visit them as and when we get the chance - how sad to have to go to one of those places that was on both of our lists, alone, at some unspecified time in the future, wishing that we had gone sooner, while the other was still there to enjoy it...
Most importantly, if you are now that person who is managing to OP a dribble at a time, then brilliant - well done you! Don't let anyone tell you that it's not worth it unless you are paying a fortune, or that because you still want to have the odd treat, a weekend away, or a nice meal that you haven't had to cook occasionally, you're not doing the right thing. For YOU, your way might well be the right thing - for someone else, their way is their choice. Each to their own - personally, I'll go for having fun and enjoying life!
Remember - As much as you can is absolutely fine!
(What was that? The photos? Oh, they are "just enough" to get the idea of what they might be of...check back in a couple of days to see "The bigger picture")
Others joining in with Friday Frugality this week are:
A Cheerful Living Adventure