Thursday, 31 March 2016

#21 Priority for excess cash

Having recently reviewed my progress against my aims for 2016 I've realised I'm not entirely clear what my priorities are with any excess money I have each month.

So I've decided to list the options, detail any specific targets for each and prioritise.

The options are...

  • Rainy day / fallback savings.
    • I think having enough to cover one month of normal outgoings  (£2629.29) is the minimum I should have.
    • This should be accessible at short notice, but doesn't need to be regularly accessed.
    • Probably a Cash ISA with limited withdrawals - and therefore increase interest rate - would be the sensible option.
  • Savings for fun
    • Ideally when we go on holiday / want to purchase something new this'll come out of a stash of cash we've put aside. Rather than hitting the monthly accounts.
    • I think the amount saved in here depends on what we're saving for.
    • So the target has to be paying for our Group holiday to France in Aug '17. 
    • Remaining accommodation cost is £392.76
    • Remaining ferry cost is £280
    • Total target therefore is £672.76.
    • Over 12 months this would be £56 per month.
  • Long term savings for retirement and kids (Uni?)
    • Currently already pay into my pension via work.
    • I don't plan to touch any additional money put in here for at least 15 years - when kids would be about Uni age.
    • Should limit it to a monthly payment that can be absorbed and not leaving us potentially short in the short term.
    • This shouldn't be accessible easily - so stocks and shares seems suitable. 
  • Overpaying on mortgage.
  • Paying off Credit Card debt
    • currently paying minimum payments but on a 0% rate until late into '17.
  • Paying off Student Loan
    • Expect to put bonus money into paying this off in full in Summer '16
  • Paying off House Loan
    • Currently paying off each month and due to be paid off in 2018.

What's the relative priority?

Will leave the student and house loans as planned.

Will leave the Credit Card debt simply because I was able to get a 0% interest rate for so long and potentially could shift this again at that time. Therefore at this time without the need for any additional borrowing this is best left alone.

Overpaying on the mortgage is probably the lowest priority of the remaining items.

So it's out of savings for rainy day, fun or long term.

I think that given the small amount required for the holiday savings - and the fact that the holiday is already booked this should take priority at this moment.

Any left over money can then be put into the rainy day / fallback savings until the 1 month cost is reached.

Once this is covered (probably not for another 12-18 months) I can look at whether long term or mortgage pay off is the most sensible.

So next steps...

Set up a direct debit to pay £56 per month into a separate savings account for the France holiday.

Any further money available each month can be added to my current savings pot and a suitable account found for this. It's currently around £200~ so plenty to save up before moving on. 

Monday, 28 March 2016

#20 2016 Aims Reviewed

2016 aims

1)  Pay off all of the remaining credit card loan. 

We managed to shift the £7k onto a 0% interest free card until Sept 2017. Because of this we're repaying roughly £150 per month to keep chipping away but when I get paid my bonus in July '16 we've decided to pay off the remainder of my Student Loan instead.

2) I will put up a fence in our front driveway.

Ordered the fencing in March, and should have it erected in April.

3) I'm going to start investing for the future.

I've invested £429 into shares for the company I work for. I still want to begin investing in a tracker fund.

4) I will take my family on a holiday abroad in 2016.

Although this is looking unlikely, we have booked a group family holiday to France for Aug '17.

So in summary, 1 is complete, 1 is due to be complete in the next month and the other 2 have been altered (either by year to complete or loan to be repaid) but have at least progressed.

Tuesday, 8 March 2016

#19 Investments

One month on from my first ever foray into the stocks and shares and the value of my portfolio has steadily decreased.

Currently sitting on a loss of nearly £50 in a month isn't good by any stretch of the imagination.


- I am happy to have taken the first step on what I hope to be a long and prosperous journey into investing.

- I have learnt that I did not and have not panicked whilst watching the value decrease. Even though this is pretty much all I have in savings.

- I realize the truth in the saying "the price of the shares only matters on one day - the day you sell them".

I do not expect to invest in this single company any further, but instead in time expect to set up a monthly investment into an index related fund.

Wednesday, 2 March 2016

#18 February 2016 Summary

So, in word did we stick to the budget?

No. For the 9th month running.

If not, why not?

Spend was £449.07 over budget.

This was due to 3 large costs. TV Licence (£145), Car Tax (£180) and Flights + Hotel for a stag do (£174)

Any positives?

£488 paid off of the credit card. Mainly due to reimbursement of expenses from work and money made via Quidco gambling trick.

I made the decision last month to sum up all large one-off costs throughout the year (inc TV Licence, Car Insurance, Home Insurance etc) average the cost out over 12 months (£60) and pay this much monthly into an account. This will spread the cost over the 12 months and allow me to better budget.

Having only started this didn’t help for February, but if it had TV Licence and Car Tax would be removed and thus I would have been only £124 over budget. Still too much though.

Lessons / thoughts?

Sainsburys grocery shopping £49 more than budget. Acceptable as a one-off but will aim to keep down next month.

Expectations for next month?

Car MOT. Min £50 have to hope nothing major.
Potentially buy the fence, which was one of our 2016 aims.

Effect on overall finances?

S    Student loan – £336 was paid off direct from payslip. Total remaining now is £7,467
·         House loan – £298 was paid off direct debit. Total remaining now is £8,633
·         Credit Card -  £488 was paid off. Total remaining now is £5,710

Total Debt = £21,801 (Student Loan is £7,467; House loan is £8,633 ; Credit Card loan is £5,701)