Is your home going up in smoke?

Thanks for dropping by! Feel free to join the discussion by leaving comments, and stay updated by subscribing to the
RSS feed:

Here’s some stuff you probably don’t want to know, but it is quite mind boggling.
It’s that time of year when the resolutions you made last week are just about still being kept. And a major one throughout the country is quitting the dreaded weed. You know all the lines, “Giving up smoking is easy – I do it every year”. And, if you are a puffer, you have also probably worked out how much it would save. But have you ever really thought about what that money could mean to your finances over a number of years?
If you smoke 20 a day and a typical pack costs about £5.66 after a month you would have spent around £175 on your habit. That’s £2,100 over the year. Cripes!
If you managed to stop smoking, what could you do with all the extra cash? You could save it, buy yourself luxuries, or pay off a personal loan. But, imagine what an extra £175 every month would do to reduce your mortgage loan.
Let’s say you have a mortgage of £150,000 over 25 years and your repayments cost you £921 a month (at an interest rate of 5.5%). If you overpay by £175 — taking your repayments up to £1,096 — what will happen to your mortgage? Not only will you save £39,787 in interest, but you’ll also arrive at your mortgage-free day 7 years and 4 months earlier. Not bad eh?
Or what about using the money towards a retirement income?
By putting just £175 a month into a pension for the next 35 years, you could end up with a pension pot worth almost £134,000 by the time you retire. Pretty good when you consider that, if you spend the money on cigarettes instead, your pot would consist of precisely nothing at all. There’s also the small extra benefit that, if you quit, you’re likely to be alive and in much better health to enjoy your retirement!