Mortgage Free in 5 years: half of every invoice goal

Having announced my intention to return to 100% freelance from October, it might therefore be surprising to hear that I’m also going to be attempting a pretty radical goal to try and drastically increase the amount saved to use against my mortgage balance: I am going to try and put away half of every paid invoice each month for the foreseeable future.

I don’t know if this is entirely sensible with the cost of hot desking to think about, my car insurance due in November and the dreaded bank-draining event that is Christmas just around the corner but I’m becoming increasingly aware that I’m not doing enough just bumbling along tucking away passive income. However, with something in the range of £1600+ worth of bills at the beginning of every month, after contributions from Gaz towards his half of the utilities and Karl towards childcare, I’m going to need to earn £1800 as a minimum (per month) to be able to cover the bills and put half away. That’s not including irregular and/or business expenses.

To get me off to a head start, last week I tucked away £500 into my ISA. It wasn’t quite half of the weeks income but with travel to and from Brighton and the inevitable cost of food etc while I was over there, I knew I’d need a bit more in my current account to get by. However, I did what I always do when I go somewhere “new” and I over-spent on stuff I didn’t need, so I need to start setting myself a budget for these occasions too. There has to be a happy medium between radical frugalism (is that a word) and free spending…

Hoard Mode

As I woke up to another sale on my premium mail form yesterday, I felt like I’d received a fresh kick up the bum to start actively working towards my mortgage free in five years goal again.

It’s not that I’ve not been working at it — all sales of the form (minus PayPal’s extortionate fees) are routed to my ISA where it sits til I can pay off a chunk of the mortgage — but I’ve not been doing anything to increase that passive income which is going to be the key to paying off the mortgage; I’ve not released stage 2 of the mail form functionality, and my other two projects are stalling while I get back on my feet too.

It doesn’t help that I’m currently in hoard mode: that is, because my financial future is less secure now that I’m self-employed again I can’t help but keep hold of every penny. I don’t want to move money out of my current account in case I need it quickly, and I don’t want to move what’s in my ISA onto my mortgage debt because if I have a sudden unexpected bill or a few dry months I’ll need that fallback.

I’m being paranoid. I have plenty of work and my bills are being paid. I just seem to be stuck on the thinking, and not on the doing… perhaps another spur of the moment decision is in order.

Mortgage Free: Bumps in the Road

One of the biggest barriers to me being mortgage free in 5 years is a bad habit I don’t tend to talk about too often: I’m a comfort spender. If I’m stressed, I spend money on anything and everything. The ironic thing about this unnecessary splurging is that it ultimately leads to me adding to my stress levels because I end up wasting money that I need to save or use more appropriately. To put this into context: I recently had to give my credit card (which I took out at 0% interest purely for emergencies when solicitors fees swallowed my savings) to Gaz to look after because I spent £57(!!!) on a dress I didn’t really need.

I have good months and bad months. At the minute, despite being hugely anxious about work and my impending return to freelance, I am also incredibly aware that I have no choice but to cut all non-essential spends for the foreseeable future. Over the weekend I managed to keep my spending low despite being out and about, yesterday I spent just £15 on groceries for the week and I have successfully resisted the urge to buy an extra set of barbell weights (which I ‘need’ to progress my lifting).

Although… I did have a minor slip this morning and spent £1 on a box of Cadbury’s chocolate fingers, oops.

I know I’m doing it, even as I shop. I know I’m wasting money. I browse online shopping sites and tell myself as I go along “you don’t need this” and “you can’t afford this”, and then end up clicking “buy” anyway. Sometimes I add a ton to my basket and get as far as checkout before I come to my senses and browse away (but sometimes I don’t).

I know I do this for the feeling of pleasure I get both completing a purchase, and also when the things I’ve ordered arrive, but I also know that this feeling is fleeting and is soon replaced by spending regret, or (often worse) complete indifference: because that means the hole I’m trying to fill remains a void. I also know that I primarily spend like this on days where I don’t have my babies at home. I’ll leave you to fill the gaps there.

The question is how do I stop myself from doing it? How do I employ enough willpower to stop the spending (especially when I feel like my strength & willpower is exhausted just getting through the day at the minute)? I suppose I could buy a book on comfort spending habits…

To be mortgage free: overpayments and stuff

Tomorrow marks a month since I secured a new mortgage on my home, giving me the funds I needed to complete “project £20k” thus buying Karl out and transferring the deeds to solely my name. In total: £97,617.23 — £77,617.23 to pay off the old mortgage and £20,000 for Karl.

This week the first mortgage payment came out of my account, taking the mortgage account balance to £97,467.00

You’d be forgiven for thinking my mortgage payment was £150.23, because that’s what you get if you subtract the current balance from the original lending figure. Except it wasn’t: it was a nice round £500, which is made up of £477 actual mortgage payment due and £23 overpayment which I set up as soon as my mortgage went through (because I can afford an extra £23 but if I have to manually transfer it each month I’ll find other ways of using it!) This basically means that in a month I’ve accumulated £350 worth of interest.

THREE HUNDRED AND FIFTY POUNDS.

How am I going to be mortgage free in five years if I blink and £350 is added to my mortgage balance? Well, here’s what I’ve done so far:

  • I released the premium version of my mail form and have started working on the membership area. If I can sell 1 copy of my premium mail form a week for a whole year, that’s £939.12 which would take 4 months off the term of my mortgage and could save me £1,174 in interest.
  • I transferred some money from freelancing straight to the mortgage pot. If I can work just a few hours a month for a year I could earn around £1600 which would take 7 months off my mortgage and save me £1,985 in interest.
  • I’ve done a lot of work on Soft Play Reviews, a project I started two years ago, and if I can earn just a couple of quid a week through ads I’d save myself £131 in interest.

Combined, just these 3 things could take a year off my mortgage and save me £3,240. Even if I can’t be “mortgage free in five years”, who can balk at saving over three thousand pounds?

Other things I’ve done this month:

  • I didn’t eat out because of whole30, which saved me money.
  • I was more careful about what I was eating (again, because of whole30) and this also saved my money: the idea that whole30 has to cost a bomb is hugely erroneous.
  • Sold some old things on ebay which have been sat in the back of my wardrobe for years, and made £91.11 (minus fees) … although I imagine a big chunk of that will go on postage!

Can I keep up the momentum? Can I do even better? Only one way to find out…