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We are family of six with a huge mortgage, one income, and a tiny budget – here are some of the ways we save & make money so we can save for the future and spend more time doing the things we love
Its been a long while since I’ve written and a whole lot has changed – some of our thrifty ways are habits and are still firmly in place, but some have lost their way over the last few years, and it’s definitely time to see if we can do a little better.
A new house
I am a teeny bit obsessed at looking at property for sale on the internet. It drives Mr T slightly potty, but I love to see how the houses are laid out and decorated. Last year during a window-shopping splurge we spotted a house on the market, that a similar value to our property but had a fourth bedroom;- although it needed a lot of work doing. We were in a three-bedroom house with four children and we were feeling squished so we decided to view the property, wondering if we could get a like-for-like mortgage. That viewing started a chain of events we weren’t expecting!
Our next step was to visit a mortgage advisor, where we discovered that we could borrow a lot more than we imagined, but not enough to afford an extra bedroom in our town. The original house we viewed had a tiny garden and needed much more work than you could see from the photos, so we decided to keep looking. We looked further afield and found that property over the county border and in a different postcode, just 10 miles away was significantly cheaper, and you get much more for your money.
We found a four-bedroom semi-detached Edwardian property with high ceilings and huge windows. It had more floor space on its ground floor alone than our entire house combined, and the garden was over twice the size too. We fell in love and I still have to pinch myself regularly that this house is ours, it’s far from perfect and needs work, but it’s our home and castle.
A sad but sensible change of plan
A few years ago we had big plans to pay our mortgage off before we turned 40 years old. This would have been a tough challenge but not out of the realms of possibility for our old property. When we moved we almost doubled our mortgage which means those plans are well and truly squished.
Our mindset had slowly begun to change too, we wanted a property that our children could stay comfortably well into adulthood. I can hear some people reading this and thinking why on earth would you want that? Some days I ask myself the same question! Times are changing and it is much much harder for young adults to make their start in life, let alone to get on the property ladder – so we are hoping that having their own space means they won’t be in a big rush to leave and can happily study/work from here while they land on their feet.
When Mr T and myself were a young couple, we were very lucky to get onto the property ladder when we did, and without being able to save money whilst living with my mother and father in law, we wouldn’t be where were are today. That was only possible as due to the kindness of Mr T’s parents and because his siblings had already flown the coop.
A new car
A few years ago, we took out a car loan of almost £10’000 for a car, because our old car failed its MOT so badly we had no option but to sell it for scrap. It was a rush to choose something or we would need to cancel our summer holiday. When we bought the car, we knew the car tax was in one of the highest brackets (almost £600 per year!) but there wasn’t a lot of choice and we felt we had no option. We were in the lucky position we didn’t actually use the car for commuting back then, only for days out and holidays. That changed when we moved house and needed to commute to school, we discovered we were spending close to £200 a month in fuel. The other thing we didn’t consider was that the car was an import and replacement parts were hard to find and expensive.
Hindsight is a fabulous thing, but we wish we had swapped the car much sooner. We now have a much smaller 7 seater, we save around £360 a year in car tax and around £100 a month in fuel. That’s a huge saving of over £1560 a year. Our new cars make and model is fairly common, so repairs and replacement parts should be cheaper too.
We still owe around £3500 for the first car too, and the £200 payment is a monthly reminder to make better decisions.
The credit card yo-yo
We have spent the last 6-month playing yo-yo with our credit card. Almost clearing it, but then spending again. This has been partly to do with a mix up with tax credits, Mr T been furloughed and an unexpectedly high utility bill. But if I am honest with myself, its mostly to do with living outside our means and buying stuff we both didn’t need and couldn’t afford – hard words to hear and type.
A new budget & plan to work towards financial independence
The lockdown has given us the opportunity to think about the things that are important. Short term aims are to pay off our non-secured debts of the credit card and loan, and then look at reducing the term on our new mortgage by overpaying. Our long term goal is financial independence, and to retire early. We want to do this by paying the mortgage off early and investing/saving to ensure we have savings to live on in retirement. Most of all we want to have fun and enjoy the journey; because although we don’t want to be working into our seventies, we want to look back with fond memories and life is just too short not have fun along the way!
I am hoping to share some of the things we do along our way, in the hope that it helps or inspires other people.