BBC2 paying off your mortgage in 2 years....

[helsi]

was fascinating -picked up loads of tips. the couple last night had similar incmings/outgoings to us but they had more debt! I couldn't believe that in 9 months of starting the experiment they had saved £10,000.

anyone else watch it?

Does the bloke pay tax on his hypnotism income though? He was mentioned £100,000 a year, if it all went to plan. Yes, but after tax, that is, oh say, £65,000? Tax on large sums in a short time hits hard, grumble grumble ...

Yeah, no one mentioned tax.....

I have got some ideas fromit I must say. they still had 22 yrs left on the mortgage and is was for £85k. I certainly have started thinking about cutting down and saving.

Didn't they work in banks too? (Still not watched it.) When I worked in banking we had SAYE (save as you earn) which gave us the potential to tap into huge amounts of money. Friends I know who work in banks have small-ish salaries but they have always saved up to the max on this and they have tens of thousands of pounds worth of shares. Each year they could, they have cashed in a maturing plan, sold enough shares to remain under capital gains tax limits and paid off a chunk of their mortgage.

Earning over 2k per week might seem attractive on the surface but:

• partic in his line of work it would require lots of networking and advertising/referrals

• no sick pay, no parental leave,

• no company pension

• payments for income protection insurances, etc

All of this eats into what seems like a huge amount of money on the surface and you need to allow for the dark periods. (DH is a freelance IT cons. Between 93-99 money poured in - real gravy train. Since then he has spent around 35-40% of time out of contract. Money's still great but hasn't risen in 6 years and we effectively live on half the income we used to.)

We don't have a mortgage yet but we have huge debts that we need to clear. If I manage to do a bit of extra work and we take into consideration overtime from DP, we save what we have left on paper (ha ha!!) and if we were to re consolidate(!!! and have willpower which we MUST) then I would hope we could save £700 a month. This will mean me working more than full time though so won't be without sacrifice. My plan atm is to do this for about 15 months, take 7/8 months off in the middle (for a baby please!!!) and then re start. Hopefully clear the vast majority, if not all, of our debts in 3 years. That way I will feel that we will have made some serious headway into our debts but at the same time not at the expence of having the family I hope for. I found this program really quite unrealistic. And I didn't like either of them!

its an impossible situation to put a family in - take packed lunches, I ask you?

I suppose by paying off a chunk of your mortgage with the first £10,000 saved then your mortgage repayments for the second year would be less, enabling you to save even more the second year. But unfortunately the areas dh and I are trained in are not the sort that earn £1000 a day. And I can't sing!

Is anyone out there going to try it?

When DH & I bought the house we're in jsut now we got lots of prejections for overpaying our mortgage & by paying £200 more a month I think we would have paid it off 9 years early & saved something like £30K in interest. Needless to say we've never bothered our backsides. A surprise little DD came along, I went part-time, our costs rose etc. Life always gets in the way of your plans
It is amazing though if you actually count every single penny how much you can save when you really try. although I do draw the line at packed lunches too Groggymamma - just don't eat saves you even more!

This programme brought back up one of my dilemmas. We pay £50 per month for DS and same for DD into a low risk fund in case they want to go to university. Would we be better off using this £100 to overpay on the mortgage because then we wouldn't have a mortgage when we need the extra cash for education. DS is 3, DD is 9 months and mortgage over in 17 years without overpaying. What to do? What to do?

loobywoof, by putting 100 pounds into a fund rather than overpaying the mortgage means you are betting on the fund performing better than the amount of interest you are paying on the mortgage. Simplistically, if you are paying interest of say 5% a year on the mortgage, you would want the value of your fund to grow at more 5% per year.

But as you know, mortgage rates vary over time, as does the performance of the stock market. Over the last 2 years, the value of shares generally grew at a much higher rate than 5% (at least double) but before that, was falling. One philosophy is always to pay off your mortgage as fast as you can before you start investing in other areas - but that means you are putting all your eggs in the property market until you pay it off.

It is all crystal ball gazing, really. It is my dilemma as well. And I do invest in funds for my dd whilst having a crippling mortgage.