Friday, 10 January 2014

Frugal Friday

Saving for views like this...
The last week has seen some planning here at EH Towers. Spreadsheets have been examined, figures have been input, and conclusions have been reached. Money has been saved too, so the year's got off to a nice start!

One of the things we wanted to review was the cost of our TV, Internet and Phone. We've been with Sky for a good few years now - with the exception of the one year we went off to Virgin Media when our building was swathed in scaffolding. We wasted no time in leaving them just as soon as our contract was up either, and have been back with Sky ever since.  However, much as we like their services, over the past few years the costs have gradually crept up, and we decided enough was enough.

First step was to do our research - a quick Google through news stories suggested that Sky are currently losing rather a lot of customers to BT - it always pays before you call to haggle to know who the current enemy are! From there we looked at the BT website to see what they would offer, and quickly found a package that would work for us for £35 a month - including line rental paid up front to bring the costs down - we were prepared to do this if needed. It always helps to know that if you don't get any joy with bringing the cost down with your current provider, you've got another one lined up that you'd be happy to go to. Next step was the phone call - initially I went through to the department dealing with upgrades/downgrades - explained that it was getting a bit too expensive and I wondered if there was anything we could do to bring the costs down. The chap I spoke to looked over each part of our package and said that there was no savings to be made, so I  asked to be put through to someone to discuss what I needed to do to terminate the contract. That gets you through to "terminations" - and they are the people with the real power in these negotiations. I always start by gently making the point that we've been very happy with Sky's service, and don't ideally want to leave. Then summarise the reasons for doing so - in this case a package from BT that actually offers slightly more than we currently have, and is £15 cheaper than our current Sky deal. In my experience going in and being entirely upfront about where you want the deal to end up usually pays off - it's not haggling in the real sense of the word. So now you not only have the eventual price you want to pay on the table, you also have who their competition are, and oddly enough, whoever are the biggest competition of the moment, there is usually a deal there to match it. This applies to all the major players by the way, not just Sky. Less than 5 minutes later I was putting the phone down having committed to a new 12 month contract at just £35 per month. The rules for success here are straightforward - be polite and chatty. Be honerst - don't threaten to leave if you have no real intention of doing so. Be honest about the other offers you've seen, but by all means be slightly grey about how you've come across them - in this case I described it as "The package BT are prepared to offer" - making it sound as though they'd contacted me with this deal.

Looking forward to my new lens for more like this!
That £15 a month saved will of course be being added to our "mortgage overpayment pot" from now on, and that lead to us having a bit of a natter about where we wanted to set our financial goals - both this year and into the future. We have a lump sum waiting to be paid to the mortgage already this year, and then will only have a few more months of overpayment before we hit our overpyament limit - our product only allows overpayments up to 10% of our outstanding balance. From that point everything we can spare will be stashed away into savings, ready to make the next lump sum next year. Then the whole cycle repeats itself until part way through 2016 when our fixed rate is finished and we're freed from the overpayment limit. The plan is that at that point we'll have stashed away as much cash as possible to pay as much as we can off immediately - then just keep throwing every spare penny at it until we're able to make that all important final payment. And here is the conclusion...

That by, or before, 24th July 2017, we will have made the final payment to our mortgage. 

The significance of this is that it will mean that we have paid our mortgage off in 14 years rather than the originally planned 25. It will also mean that I will be mortgage free before my 45th birthday - quite a good achievement I think you'll agree? As for this year, our target will be to end the year with £5,000 stashed into our overpayment account - a bit of a tall order this, but we'll see how it goes. I also want to replace in my personal savings the money I am about to spend on my new camera lens - again, by the end of the year.

I'll try to remember to do quarterly updates on these targets to let you know how we're going. How about you - any challenges or targets been set in your house for 2014?



Scarlet said...

That's fabulous news about the mortgage Robyn. I've renegotiated our Virgin package numerous times over the years, and as someone who did a year long stint in a call centre I couldn't agree more about being polite.
No challenges or targets, but I'm hoping to add to the new radiator savings by doing a bit more decluttering. I've had a good week ebay wise and am planning to list some stuff each time there is a free listing weekend.

Anonymous said...

You'll do it Robyn. I know you will. :D

BarnsleyHistorian said...

Ah, I envy you. We overpaid on our last mortgage and managed to pay it off in nine years instead of sixteen. Houses are cheaper up north! Then what do we do, like fools, go and buy another house and get stuck waiting to sell the old one while paying interest only on the new one. I keep reminding myself that it's still cheaper than renting, but if we had stayed put we could have afforded holidays and beer ... Happy New Year Robyn I am made happier by your optimism.

Robyn said...

Scarlet, isn't it just annoying that the likes of sky, Virgin etc overcharge in the first place on the basis that they can then drop the prices and look competitive? Gah!
N - thanks for your optimism - I certainly hope we will! :-D
L - chin up lovely, I reckon this is going to be YOUR year, that house just HAS to sell, lets just hope it's soon! Lots of love to you both xxx