A ‘smart financial moves’ thread

[crabsaremisunderstood]

A space to share anything and everything, big or small, that has helped your finances in some way recently. You never know - it might help another person on this thread!

My smart move was opening a Lifetime ISA 3 years ago. The government gives you 25% on top of everything you put in, on funds up to £4k a year. If you put in £1k, you get £250 extra! I bought my first house this year and wouldn’t have become a homeowner if it hadn’t been for this. For those that have already bought a first home, you can also use it to give yourself a retirement fund.

I might be wrong but a properly used credit card improves your credit rating?

@sittingonacornflake that lloyd club interest rate is only 5.25% for a year. What happens after that is less clear. Those sorts of accounts are aimed at getting in lots of new business quickly, to build up their capital, then hoping that most people won't move the money elsewhere when the year ends. So it's worth putting the maturity date in your diary for next year!

and also overpaying the mortgage.

Saving half of every pay rise.

Stoozing combined with an offset mortgage.

@imaginedis it says that after a year it becomes a standard saving account but you can start another of these high interest saving accounts. If I read it correctly.

Controversial I know, but I don't see paying off your mortgage as necessarily a smart financial move historically. Apologies, I know this divides opinion on MN.

As one PP pointed out, they're able to get a higher interest rate on savings than their mortgage. In fairness, this will be harder currently for people on variable rate mortgages given the base rate rises. But it's a risk free win if you're on a fixed rate mortgage, or a lower rate mortgage than savings products.

As I mentioned earlier, we've invested the capital element of our interest-only mortgage in the stock market. Admittedly I work in the FS industry so I'm comfortable picking my own investments and the risk/reward balance. But I've typically made 25-30% return per year and I'm paying 1% on my mortgage. Some funds nearly doubled in a year.

That said, the value of most of our investments has fallen over the last year so you have to be willing to take a long-term view and I think those bumper returns are unlikely to return for some time.

But over the years, not paying off my mortgage has meant I've made significantly more money. And you don't have to have an interest-only mortgage, you could not make the overpayment and invest that money elsewhere.

@LizBuin i thought that protection offered by credit cards had now extended to all methods of paying? Though I don’t know who’d do the chasing if you paid cash. But I think debit cards cover it now as well.

I got a credit card with a 0% interest deal, and moved my other debt to it (admittedly for a small transfer fee). Then set up monthly Direct Debit to pay off the loan over the interest-free period. It saved me money, but more importantly stress, as the balance just decreased (still use other cards for purchases).

@Labraradabrador can I ask which tracker funds?

Also, when I moved back to the UK from abroad, I set up "buying back" the missing years from my (public sector) pension, spreading the cost over my remaining career. I just have to hope that the public sector pension still exists when I retire in 10 years! (I know this would only apply to people who've recently relocated.)

We opened a SIPP for DD when she was a few months old and put a one-off £3k in. It's expected be roughly 50k when she retires

Based on 3k only & no top ups?

Definitely LISA here too. Really bad at saving, but it automatically takes £20 a week from my account. With the government bonus In ten years it should be worth about £14k+. I'm 33, can't take it until 60ish, so £14k X 3 = £42k. DH has one too, same amount. All on £20 a week! The fact that I'd lose the 25% bonus if I withdraw early is the motivation I need not to spend it.
We also use moneybox and i love that they provide cash back on various shops -booking.com etc. I use them all the time anyway so now I can book through them and have money put in my LISA.

Controversial I know, but I don't see paying off your mortgage as necessarily a smart financial move historically. Apologies, I know this divides opinion on MN.

It depends so much on age though. Lots of people giving advice here are talking about child benefit & very low mortgages. I've never qualified for CB & lots of younger people have much bigger mortgages.

Following!

I just got all excited about having a lifetime ISA but when I checked you have to be under 40 to apply 😥.

We used to be crap with money - cc debt & loans. 10 yrs ago we managed to clear it all and since then we have saved 50% of any extra - such as pay rises, small lottery wins, etc. We also still saved the amount we had on loans. This has enabled my DH (who is 6 yrs younger then me) to retire at the same time as me because we had enough in savings to cover his shortfall

Yes, it will go back to a rate that is similar to the one the poster had originally (see snapshot). But I don't think she will be able to take out another Club Lloyds Saver because the info says you can only apply if you haven't had one before.

Best financial move I had was a 6 figure gift towards deposit, obviously out of my control but wouldn't have been able to buy without it.

@imaginedis i think you’re right. Thank you.

Actually scratch that - I've realised you can only pay in until 50, so more like 14 X 2 (£28k) but still get interest over the following 10yrs. Plus I hope to raise my payments going forward. Still a great payout!

Following.

I recently made a budget using an online personal budget template. Included money to save for holidays, Xmas, birthday fund.

Going through my bank account regularly - helps to work out where the money goes (and means that if there's anything fraudulent happening it would get picked up quickly). Also shopping around every time that insurance/breakdown cover etc is up for renewal.

Some really great ideas on here, definitely going to start looking at a LISA.

I bought my first house at 24, a rental property while I was still at home. My mother in law still lives there and now at 37, the mortgage only has a few years remaining and is worth almost double what I paid.

We waited later to have kids and ploughed money into our mortgage so we had greater LTV and just moved into a beautiful home that we will downsize when the kids up and leave.

We use our credit card as our main spending, paid off in full each month and get lots of rewards and cash back this way.

Changed our expensive caravan lifestyle (7 years of sun but dead money), and bought a little holiday home in the same area instead. All in costs us around £100 extra per month than the caravan did but hopefully will reduce when mortgages right themselves again over time and we already have equity rather than the caravan depreciating.

@LadyWithLapdog

yes actual gold, gold coins.

@LadyWithLapdog you're welcome! I hope it makes a difference!