Scrimp and save to pay mortgage off or live now?

[Easypeelersareterrible]

Prompted by thoughts from others threads, I thought I’d pose my current dilemma.

Early 50s, big earners, 3 teens kids, big mortgage. We are a bit stuck about what to do financially. The choice is:

1. Keep working hard in not very satisfying jobs. Don’t spend extravagantly (but not really living frugally). Get the mortgage (£400k) paid off in 5 years or so.
2. Keep working hard and pay the mortgage off in the next 10 years or so but take slightly more exciting holidays, buy the kids more kit etc while they are home, make a chicken last 2 meals instead of 5 etc.
3. Downsize, move to the country, take much lower paid jobs but have more free time to have fun, no mortgage, lots of savings, more laid back pace of life etc.

We’re currently doing 1. I worry that the kids will leave home and we find we pay the mortgage off, have lots of money and time but no kids left to enjoy it with. Do we just have more fun now, treat them more, but the stress of a mortgage for longer. It’s so hard to know how to gauge things.

What are others philosophy on this?

1. Life is more important than paying off your mortgage early.

Live your life. You can downsize and restructure once they’re grown.

Sorry that should say 2.

Personally I'd want to enjoy life as much as possible while kids are still young enough they will do stuff with you. Your mortgage will be paid off in the end regardless, and as far as debts go, a mortgage is a totally standard one. 10 years isn't long till it's gone anyway.

3 sounds good, but would three teen DC enjoy living in the country suddenly? It seems a lot more drastic and is probably a longer term goal.

I would do 2 with an eye to doing 3 in the future.

Life experiences and time together is more important than 5 years off your mortgage. Spend the money on doing nice things together, making your life easier by outsourcing some stuff, that sort of thing. You don't get this time back.

I don’t think of the mortgage as debt as such, so I don’t stress about it. I’d enjoy doing things with the kids while they’re still happy to be around you - you don’t get this time back with them.

My parents scrimped and saved and it just made childhood unpleasant.

We had a massive house with thick carpets and beautiful furniture but tiny portions of food because we were ‘poor’.

Just enjoy your life.

I’d go for 3. Time is precious.

2 because I wouldn't uproot 3 teenage kids to the countryside and disrupt friendships, hobbies, schooling etc. you can do that bit when they've left home.

I'd do 2 right now with a view to doing 3 when they are adults and can be done whilst you still have a mortgage if you go to a cheaper property and use the equity to pay it off.

How big are your chickens that you can potentially get 25 portions out of one?? (five portions for five meals)

3 sounds terrible for the kids so no. 1 or 2 depending on dc's ages - 3 lots of uni costs won't be fun so you may want option 1 in order to afford uni in a few years time.

Yes I'd do 2 for now, maybe 3 in the future. How are your pensions looking?

I certainly wouldn't be looking to uproot teens from their schools and friends short of major financial or practical emergency so do what you need to keep paying the mortgage but if you are on track to pay it off within 10 years and don't necessarily want to stay in the house long-term, overpaying would not be a priority for me, certainly not over building a pension pot and possibly a more accessible fund to help see kids through university and getting set up in life (locking all your savings up in your home equity or pensions makes them very inaccessible). And do live a little too, there's a real risk of living so frugally for so long in preparation for retirement that you end up not being able to actually enjoy your money when you get there, if you have enough after mortgage and bills to take a nice holiday I certainly would, you risk burn out and not being able to go on working if you never allow yourself any fun or relaxation at all and that will have a lot greater impact than giving yourself a bit of disposable income in exchange for continuing to work hard most of the time...

We too had the plan to do a version of your 3 in the long term and although we did manage to downsize eventually it look us probably 10 years longer than expected, we'd totally failed to plan for the fact that there's a lot of expectation to support your kids practically and financially for longer these days, we'd naively assumed we could sack off work and retire to our rose gardens and dog walking once youngest finished uni but in reality we had a least one child still living full time at home until youngest was 25 and more than one of our kids took career paths that didn't pay them a living wage until similar ages either, a couple chose further post grad study which was a good investment for their futures but required ongoing support etc etc. Obviously this was a choice we made to support them and not a luxury everyone has but we wanted to, the price of that was continuing to work and live in London for longer but was worth it to us.

Live now. Tomorrow is not guaranteed, and all that.

2 for the same reasons.

My finances wouldn't be my priority for this next decade the kids would be - and they will want to go places with mates, go on international school trips, possibly have driving lessons, go to uni... and I would want to support them with all of that as far as possible.

It's not time to sit in a cold house trying to pay down your mortgage, or time to move to the country and knit your own yogurt. It's a decade of doing everything driven by your kids needs and wants. When your kids have grown you can decide to work hard and save/pay off the mortgage like demons or go part time, move to the country and wear a hat and fingerless gloves indoors there but neither of those options are great for teenagers.

I've gone for option 2 personally.

When I come into some extra money I put it towards the mortgage. But only because the interest rate on the mortgage is higher than any savings account. Little chips away at it, little and often is a good way to do it.

I've read in a few places that just over-paying an extra payment a year can knock a huge amount off the overall term.

2 and then do 3 in a few years
Or is some combo of 1 and 3 possible that doesn't involve being really rural/uprooting the kids too much. We have downsized but can stay in the same school though still in same jobs to get rid of mortgage quick plus have enough to do fun stuff with the kids. Is it the job you hate or the big mortgage?

1. Kids are borrowed time and your mortgage will be gone in time for retirement.

2 or 3.

If you had young children i'd say 3 in a heartbeat, but since they're teens i'd suggest option 2. Then when they've left home go for 3.

We're doing No 1 because we want to be able to help our teens out with Uni and house deposits in a few years time when we don't have ongoing mortgage costs.

We have done the big Disneyworld holidays and abroad trips in the past but we've been concentrating on our house reno over the last couple of years so the kids can have more room at home. We're now downsizing our holidays to travel more often rather than a big expensive trip every few years. They have everything they need.

but why would you spend your life making a chicken last 5 meals if you don't have to.

1 sounds like the worst option, you're giving up several years of happiness and at the end of it you're still overpaying on utilities, council tax, maintaining an expensive house etc - unless you're planning to sell anyway after the kids leave.

2 then 3, there is almost no virtue to 1 at all.

Because childhood is only 18 years long and if you spend 5 years of a 13 year olds life living like a miser that's their teen years gone. Teens are great, and it's a brilliant time to start enjoying your kids having fun holidays not tortuous ones.

I meant 2.

Life is too short for 1

We did 2 and I would do the same again