Money

Posted by stephen on Thursday, 19th January, 2006 @ 23:27

I've just watched a rather interesting and entertaining programme on BBC2 called Pay Off Your Mortgage in Two Years. As the title suggests, the presenter believes it's possible for most people to sufficiently reduce their outgoings and boost their incomes enough to pay off their mortgage in just two years.

How? Through two years of very hard work! Both in terms of living week to week on as little as possible and by exploiting your talents outside of your day job, even loosing the day job eventually.

One example of cutting down given tonight was the couple in question's lunchtime habits. By making their own vegetable soup and having that for lunch twice a week they saved ?8. Over the two years, that's ?832. Not a lot off ?90,000 perhaps? But it's one of many tiny details that really add up.

When I think about my spending it's actually quite scary how many unnecessary outgoings I have. For example, my NTL Cable Modem is currently costing me ?34.99 per month for a 10Mbit connection. I used to have a 512Kb connection when I first got broadband, and that seemed super-fast at the time. Now the minimum NTL will sell me is a 1Mbit connection for ?17.99 per month.

Do I really NEED 10Mbit access to the Internet? In two years I'd have an extra ?408 if I dropped to 1Mbit. That's a really bad example because it's something I really don't see myself doing!

I've got ?149,600 of mortgage repayments left over the next 22 years and 8 months. That's if it stays at ?550/month. Which it won't when my fixed rate runs out in nearly 5 years time. Even if it does, I've currently got around ?87,500 of capital left to pay off, which means I'm paying Halifax's shareholders ?62,100 for the privilege.

If I was able to pay my mortgage off in 11 years, I'd save over ?30,000! And 11 years feels like a more realistic goal for me than 2!

But how to save and how to earn?