plonkee money an english-er's thoughts on personal finance

September 20, 2009

highlighting frugal home decorating tips

Filed under: house — Tags: , — plonkee @ 7:31 pm

As autumn starts to draw in, I’m spending more time at home and indoors. When I bought my 100 year old house it was listed as needing ‘cosmetic work’. Which basically means that it needed redecorating, a new bathroom, some minor repairs, and generally wasn’t all that pretty when I moved in 2 years ago.

Now, I’ve done some DIY work on the place, but I need to save up for the things that I have to pay someone else to do (new bathroom, more loft insulation etc, etc). These are either tasks beyond my competence, or just far too much for one small person to do on their own. But, it means that there is no money for frills and frippery in the home decor department.

However, thrifty and frugal ideas for home decorating can be found all over the internets. If you’ve never read Apartment Therapy, you should. As a blog, it’s annoying – you need to register for comments, and there is so much repetition and so many round-up posts. As a resource for improving your small space in a cool way, it’s unsurpassed.¬† At the moment they’ve got a post containing links to 15 frugal ideas for decorating.

For more ideas check out:

My most successful frugal decorating was to buy a roll of wrapping paper, and liberate a selection of wallpaper samples, and use them to cover plain magazine files and archive boxes. All my paperwork is now stored in custom boxes in my hot pink, black, white and grey colour scheme.

Do you have any resources for frugal decorating? Or some major successes to share? Let us know in the comments.

April 27, 2009

it rained inside my house

Filed under: house — plonkee @ 7:46 pm

And, the hidden costs of owning a house have reared their ugly heads.

At the front of my house is a bay window with its own little roof. It rained quite heavily today, and the carpet under the bay is wet, there’s also a reasonable likelihood that part of the ceiling is going to come down (it’s separate to the rest of the ceiling and about a foot lower).

I do have an emergency fund, but what I don’t currently have is time to get it fixed. I’m starting my new job next week, so I’m ridiculously busy this week handing over stuff, and I can’t exactly plan to take any time off next week to organise a whoever to come over – I also have no idea what trade is required to fix this problem.

For now, I guess I’m just going to have to hope it doesn’t rain any further and cause an even bigger problem. I’m not sure what else I can do in the short term.

lessons to learn?

Although you can see that there’s been water damage to that part of the ceiling before, for some reason I think I read in the survey I had done that it was no longer an issue. Still stuff like this is one a fairly long laundry list of things that need to be fixed – this is what happens when you buy a 100 year old house. If it wasn’t this, it would probably be something else. So far, I’ve had a door replaced but I also need to get the ivy removed, replace some windows, insulate the loft further, replace another door, remove two gas fires, fix the damp in the bathroom and replace the bathroom suite. That’s without the list of things that I’d just plain like to do.

Owning a house costs money. More than you’d think.

January 6, 2009

over pay the mortgage or save and invest?

Filed under: house — Tags: , , , , — plonkee @ 12:00 pm

I mentioned earlier that now that the economic climate has shifted somewhat since I bought my house 18 months ago (yes, I’m a poor soul in negative equity) I should re-evaluate whether it’s better for me to overpay my mortgage or save and invest instead.


The basic assumptions¬† I’m going to run with (because they are true for me) are that:

  • there is no consumer debt
  • there is a fully funded 3-6 month emergency fund
  • there is extra money in the budget without a purpose

key interest rate details – short to medium term

If I’m thinking about the short to medium term, then the only choice is deciding between a savings account and the mortgage. More risky investments are not appropriate on these timescales

  • Mortgage interest rate 4.69% (Nationwide Base Mortgage Rate)
  • Regular Savings account rate 5% after tax (Barclays Regular Saver Account)
  • Cash ISA savings account rate 4.6% untaxed (Scottish Widows Cash ISA)
  • Other savings account 3.64% after tax (Allied Irish Savings Account)

All these accounts are protected by the FSCS apart from the Allied Irish who are underwritten by a similar Irish guarantee.

arguments for and against

I calculated the amount of money that I could allocate to either saving, or overpaying. I then worked out how much that would grow to in savings, and how much that would reduce the mortgage balance by, over 3 years.

Assuming these rates stay about the same, the total difference between overpaying the mortgage or using a regular savings account or cash ISA is less than 1%. That’s really not a clear advantage. If I have regular money to put aside each month out of my salary, or haven’t used up all my ISA allowance it doesn’t make any real difference in financial terms if I put the money in a savings account, or overpay the mortgage. Even if I’ve used up my cash ISA allowance, and the money is irregular, or a lump sum, the difference between the overpaying the mortgage or saving is less than 2%.

Overpaying the mortgage means that the money cannot be accessed if needed for another purpose. It is less flexible than using a savings account. Whilst there is a psychological benefit to watching the mortgage balance decrease more quickly, I think I could achieve the same effect by mentally designating a separate regular savings account as the *mortgage overpayment account*.

There is very slightly less hassle associated with going for the mortgage overpayment as savings account rates need to be reviewed at least once a year to make sure you’re getting the best deal. However, since my other accounts and financial products also need to be reviewed once a year, I’m not sure that it’s too big a problem to add another account to the mix.

what about the long term?

Well, long term isn’t my forte. If, in the short term it doesn’t make that much of a difference whether to save or overpay, then in the long term the question is really about whether over the next 10-30 years I think the stock market will have a better than 5-6% annual return (the likely interest rate of my mortgage). For me, the answer to that question is probably. I expect my return from the stock market over the long haul to be in the region of 7% per year.

Whilst that 1% might not sound like it’s going to be lot, over the course of the remaining 28 years of my mortgage, and by the miracle of compounding, it would add up to 30% more money by investing rather than saving or overpaying. That’s a lot of money to turn down.

I mentioned the other week that I’d sort of thought that at some point I might want to live abroad. I don’t know if that’s something that I really want to do, or not, but I think that it’s fairly likely that in the next 3-5 years I may want to make some changes to my life. Although I’m settled, I’m not quite ready to say that for definite all my extra money can be tied up for 10 years.

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