If you are mortgage free, where does your income go?

[Presentxx]

We will be in this position soon and I’m intrigued as to how others spend/utilise their income when the biggest debt has been cleared? Hope this isn’t too invasive, but its not something I find myself comfortable asking those closest to me.

Oh yes and I also work extremely hard (two jobs) but couldn't possibly have come close to even getting a mortgage, let alone being able to pay one off. My student loan is going to be cancelled soon without a penny having been paid towards it.

But the death of my parents (who owned their own home) meant that my brother and I inherited enough to buy a modest place each. However I still struggle to cover the bills (the money I save on rent goes on paying back the credit card bills that ran up when I had to use cc to pay council tax and ordinary bills, plus also had to put some money on it to cover the house purchase).

Children at Uni.

We paid our mortgage off and immediately started putting the same amount into private pensions (SIPP). We’re not big holidays and fancy car people, so haven’t increased our discretionary spending at all.

Paid off mortgage by time we were mid and late thirties. Have saved up and had many lovely holidays. We both had final salary defined benefits pensions anyway.

I'm mortgage free as both my parents had died by the time i was 34. It allows me to stay in an enjoyable and low stress but fairly low paid job which i'm appreciative of.
I have some health issues at the moment so quite a chunk goes on physio, chiropractor and occasional private health medical appointments.
I'm intending to increase my pension contributions too.

If you actually looked out for cheap deals and switched where possible the interest rate on your mortgage would have been lower than your savings so not really worth the effort of piling every spare penny and paying it off

I don't agree, it's always better to be debt-free. You don't know what's around the corner, better to have no debt if you lose your job.

@sapnupuas

I'd be interested in knowing how people are mortgage-free.

We are planning to pay off 10% extra this year and next which should knock off a fair few years. We forgo expensive holidays and fancy cars in order to save as much as possible.

Work hard, save hard, live cheap,

If you can cook, garden, DIY, upcycle, entertain yourselves and your friends, etc, then living cheap is easy and fun.

I used to get 'why don't you invest in the stock market as the return is much better than reducing mortgage interest and you can just pay the mortgage off with the increase in investments'. But look at what has happened. My pension still hasn't fully recovered and neither has my stocks and shares from covid. That's fine as they are for the long game but imagine if I am made redundant and I need to cover my bills and my investments have tanked. By taking a low risk strategy and overpaying my mortgage a redundancy is something we can easily weather.

You don't have to invest in stocks and shares though. The interest rate on my savings account is higher than that of the mortgage. I realise that people can't get those good rates any more but anyone who's had a mortgage for a long time and switched would be able to.

Paying off our mortgage coincided with lockdown - we are saving as previously we had no savings . We’d like to do some renovations and a small extension as we’ve been here 5 years and changes are needed ... but at the moment we are building a buffer

@puffinkoala

If you actually looked out for cheap deals and switched where possible the interest rate on your mortgage would have been lower than your savings so not really worth the effort of piling every spare penny and paying it off

I don't agree, it's always better to be debt-free. You don't know what's around the corner, better to have no debt if you lose your job.

I would say that it's better to have some savings than to have used every spare penny to pay off the mortgage.

Mortgage free for 8 years.Gifting chunks of money to my daughter so she can benefit from my surplus cash.My aim is to buy her a decent place to live with no/minimum mortgage.

Work hard, save hard, live cheap

If you can cook, garden, DIY, upcycle, entertain yourselves and your friends, etc, then living cheap is easy and fun.

But loads of people do this & cant even get on the ladder!

As others have said, 2 kids at Uni, plus the older one just been made redundant after being furloughed. Two lots of Halls fees is a lot more than our mortgage used to be.

@Jynxed

As others have said, 2 kids at Uni, plus the older one just been made redundant after being furloughed. Two lots of Halls fees is a lot more than our mortgage used to be.

Aren't they drawing the max student loans - the maintenance loan should cover most of the accommodation cost.

Saving for retirement.

Mortgage free by 42 as worked away for 17 years, paid lower taxes, invested it and saved hard. Came back to the uk with very large amount of savings, bought house for cash. We have been lucky with our jobs overseas, but then no one has ever given us anything nor have we ever inherited anything. Not a penny.

Money goes on school fees and expense hobbies.

Pension. I’m 60 this year so 6 more years to work (I like my job so no desire to retire early). Hopefully then enjoy a bit of travelling.

I just hoard it all

Why post and run, @presentxx ? Writing an article? It’s more polite to stick around a discussion you start.

Savings - esp for DC's as they get older (cars / uni)
Not feeling obliged to stay in work if is making you miserable
Opportunities for further study
Home improvements
Visit friends and relatives abroad

Most people have to be careful with money to become mortgage free; so IMO it doesn't make sense to start 'chucking it around' once it's paid. So, no jewelry or handbags here! It's a good feeling though.

I changed to part time hours and then we both retired early - husband 57, me 61 (I enjoyed my job in the main). We have always been savers. Paid for daughter's wedding and gifted a significant sum for a house deposit. Moved last year to a cheaper but absolutely beautiful area - so released another chunk of cash which will again be gifted to daughter. We have stocks and shares, savings accounts, premium bonds etc. so are secure. We have always lived a simple lifestyle - my main joy is my garden. We used my parents retirement as a model for ours. They had a fairly small income but supplemented with savings, so they always had a nice life. We were fortunate to benefit from an inheritance from them. We run one car, but enjoy (in normal times) holidays and eating out.

To add to Lemons1571 though quite well paid our luck was dabbling in stocks and getting an amazing return. We also had a year where DH lost a lot of money.

@ploopgh

Work hard, save hard, live cheap

If you can cook, garden, DIY, upcycle, entertain yourselves and your friends, etc, then living cheap is easy and fun.

But loads of people do this & cant even get on the ladder!

Most people could do at least some of those things if they put in the effort. There'll be very few people who don't have a cooker and can't stick in a frozen pizza rather than getting a delivery from Dominos!

We don't upcycle but we sell an awful lot of stuff we no longer need on ebay etc - we sold most of our son's clothes, toys, books, etc when he was younger, we sell all the books we buy once we've read them, we sell our adult clothes too. Also, we sell all kinds of furniture, furnishings and even carpets/curtains when we decorate/renovate a room. Our son has just finished school and we've sold all his used text-books and even his school scientific calculator. We've sold thousands of pounds of stuff on ebay over the years - all stuff that we could have taken to the tip or kept in the loft/garage gathering dust.

Putting 3 kids through university.
Also we foster and that costs a lot.
We both have pensions we lob money into.
And investments.
And cars for us and all our kids.

DH’S pension, which crashed with Equitable life.
When we were young and newly wed the dream was to be mortgage free at 50 and retired at 55. We cleared the mortgage On target by overpaying loads each month, and now are trying to build enough pension to be able to retire at 65 (or 67).
Also, slowly renovating the house which had nothing done for almost 20 years. Double glazing was first (we had none), New kitchen a year ago, the lounge this year. Couldn’t do that until the kids had left home though.