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.

Until tomorrow,

Love Froogsxxxxxxxxxxxxxxx


  1. So very happy to hear about your windfall.
    You made a very wise decision....

  2. For the most part, in our house, the surplus goes right into the checking so we can pay any bills. What's left over at the end of the month goes to savings. I guess it all works to be the same as dumping it in savings in the end. But it's always a nice feeling for us to know there's cushion in our checking account in case there's an emergency.

    But I am happy for your windfall and your continued progress!

  3. You may be no more richer in pocket but are so much richer in the satisfaction of knowing how well you are doing with that mortgage.

    Well done on being so determined, I'm sure I would have waivered!!

    Have a happy staycation, they can be the best and a no spend staycation is even better.

    Sue xx

  4. that's great!
    about 8 yrs ago we were left some money and the majority of it went on paying a bulk off the mortgage which is now pretty low. i am now on a mission to reduce our outgoings and to pay off debt and i have even got my family all on board. thank you for such an inspiring blog!
    ginny X

  5. hallelujah! so glad for your extra blessings this week!! x

  6. I really admire your self control. Well done. The best thing we ever did was paying off the mortgage.

  7. Well done for being so determined.
    I'm sure you are having a brilliant staycation without having spent any of your windfall.

  8. We have been lucky enough to receive two tax rebates in the last 2 months. We choose to put a small amount into our Christmas/Holiday savings and the rest into our savings as we don't have a morgage.
    I think you have treated it very wisely :)
    x x x
    P.S I can't help having a mini daydream on how much fabric you could have sourced with your skills I'm thinking at least 2 warehouses!!!

  9. Great windfall. I hope you smiled. Little by little that mortgage is being eaten away. Soon be there.
    Love from Mum

  10. kudos to you, i would have spent it all and then kicked myself ;)

  11. We did the exact same thing earlier in the week. We received £1440.62 back from a PPI claim and it went straight off our debt. The car died 3 weeks ago and although it's killing us and we were very tempted to buy one on finance we are sticking to our guns, reducing our debt and saving for one. Until then it's public transport, our legs or bikes! Keep up the great work Jane. Xx

  12. We did the exact same thing earlier in the week. We received £1440.62 back from a PPI claim and it went straight off our debt. The car died 3 weeks ago and although it's killing us and we were very tempted to buy one on finance we are sticking to our guns, reducing our debt and saving for one. Until then it's public transport, our legs or bikes! Keep up the great work Jane. Xx

  13. Nice one! :) I got a £1000 tax refund this year (due to changing jobs twice and being on the emergency code for aaaages longer than I should've been!).

    I spent £80 of it: £30 to take my family out for a meal, £26 for some repairs to my pushbike, and £24 for two tickets to a concert for my sister's birthday. :) I saved the rest to pay for moving to Bristol, emergencies and £60 saved for travel next summer.

    A lot of people suggest spending 10% of a windfall, but I agree with you that it's best to put it towards your future (although mine went for rent, not a mortgage unfortunately).

  14. Hi Froogs
    That is super news. Well done to you and for paying it of your home. As you say, you didn't have it yesterday so you are not going to miss it. All the best. Love dropping in and seeing what you are up to. You have been busy. I say, you are a brave woman to garden in a bikini...I would scare the country if they drove past and saw me in one. :):):)

  15. Well done Froogs, congrats about your tax rebate and restraint in splurging. It is to be admired nowadays, - many people would have seen it as a green card to shop, shop, shop.
    My husband is awaiting just over £1000 tax rebate and it is earmarked for the savings pension pot.
    How do you feel about the hike in pension age? At nearly 56 I saw pension age in sight, though I do agree that with an ageing population that it had to go up. But come on Dave, six years!!!!
    I had just come to terms with five years and then it became 6. Also it just isn't state pension I won't receive till 66 but all the other benefits as well such as bus passes and winter fuel allowance.
    It does make me wonder sometimes that us frugal people you with your mortgage nearly paid and me with mine paid (though it is only a tiny house) will have to then sell our houses to pay for care. There are times when I wonder if it is worth saving.

    Sorry Froogs and fellow bloggies rant over!!

    I still think though that you can't beat that feeling of going to bed each night knowing that you do not owe anybody a penny and have a few pennies in the bank. Don't get me started on crap interest rates on savings!!! I better go lol, I feel another rant coming.

    Kathy x

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  17. Soooooooo pleased for you xxxx

  18. That is so true, I have often in the past had an unexpected windfall and used it as an excuse to treat ourselves. Your perspective is fantastic and turns "average" thinking on its head.

  19. Well done ! It IS a life-long journey !

  20. I have no mortgage and will never be fortunate enough to have one to pay off, so sometimes I wish there was less emphasis on home owning. Is it the be all and end all?

  21. Nice news ! I think you did great putting it towards your mortgage but for anyone who has credit card debt the money could go to that first.
    I was left some money ten years ago - I invested it and it has doubled - invest in yourself not in the banks and credit card companies.

  22. this is excatly how we paid our house off! every spare dollar was paid into our morgage and people would laugh at us. Like an extra 100 dollars would make a difference. well it did and we paid the morgage off in 19 years, 6 years quicker than the bank said. Best day of my life and those that laughed well they are still struggling.


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