Friday, 10 August 2012
The frugal thing to do with an unexpected windfall
Hello Dear Reader,
Today, I had a tax refund. I started a job and was taxed at basic rate for a while as I was employed initially through an agency. I've just got the over payment of tax back. I didn't for one minute think of going out and spending a penny of it. I didn't have it yesterday and I did without.
On the very same day we got a few hundred pounds back of reclaimed Payment Protection Insurance. We didn't take out any new loans or credit after spring of 2009 and we rarely had PPI. We claimed back what we could (we had to have paper evidence) and between the PPI refund and the tax refund, we had a windfall of £938 this morning. Life went on as normal and on the first day of our staycation, where we didn't have any money to go out and do anything that cost anything, we carried on as if nothing had changed.
In fact, we made ourselves less well off by adding a few more pounds to the pot and paid of an entire £1000 off the mortgage balance. We are now just three years from owning half of our house! Each time we pay off some capital, we reduce the amount of interest we pay and in turn, can pay off more capital.
If any of you get any spare money, just remember you did without it the day before. You can do without it today. Take it to the bank or building society and pay off some of the capital balance of your mortgage.
I am no richer or poorer than I was yesterday but I am a tiny step closer to owning my own home.