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.

Thank you to OP amnd PPs talkng about LISAs. Does the government still put in 25%? I looked up LISAs online but saw nothing about Gov topping them up. How does that work?

@Indoctro do you mean you invest in it or you have gold coins you keep at home? Wouldn’t jewellery be better?

@imaginedis oh yes for sure! I plan to do a lot more switching now rates for savings accounts are improving!

Buying a house instead of going travelling after uni. Being careful about lifestyle creep when our wages increase and putting savings away on payday not end of the month.

@crabsaremisunderstood thank you, this thread has prompted me to open my LISA as I've been meaning to for ages and I've used moneybox too!

Great thread BTW @crabsaremisunderstood, thankyou!

LISAs -- here is the official page: www.gov.uk/lifetime-isa

We saved for our DC into a CTF which changed into a JISA. DD is now at uni and once a year she withdraws £4k from the JISA and moves it to the LISA, and plans on doing that until the funds run out.

(A lot of posters on MN don't advise putting savings into a CTF/JISA as the child gets full control when they turn 18. OTOH it removes it from your estate in case of death or divorce, so... Luckily DD didn't go wild with the cash.)

@sittingonacornflake sounds good and I’ll get DH to look into it when he wakes up. We aren’t very good with money nowadays. I used to be a Premium Bonds fiend, so determined. Then we took it all out when we bought the house and I just got out of the habit. I looked into it a couple of weeks ago but I have to update my address and one of the kids is an adult, another 16+, so I can’t manage their accounts by myself.

Thanks! I've just changed mine now!

Thank you. Have put in the diary now I have also made the move!

After making atrocious financial decisions in my early 20s, and being £30k in debt at one point (earning £15k), I attribute YNAB as one of my smartest decisions, obviously getting a higher paid job over the years has helped a lot, but I'm so much more mindful of how I spend now. I have no debt other than a mortgage and over a years gross salary saved/ISA

Envelope budgeting has helped me enormously. I had to pay for a new tyre last week - no issue as I have £500 sat in my 'car maintenance' pot. Christmas is coming but i save each month so already have the cash waiting in Dec.

I reconcile a few times a week, if not daily, so always know what's in each account. There's no chance I'd miss a rouge DD or fraudulent payment.

I also save in an account with higher interest than our mortgage is at, with the aim of having a chunk to pay off when it comes due in 4 years - although that reminds me to check if there are any new savings accounts with higher % than I'm at now...

No you buy actual gold coins - from the likes of royal mint, bullions by post etc.

It's not for investment reason ie to make money but to protect wealth , as a hedge against inflation.

Although it's getting harder to get hold of at the moment as the banks are buying a lot of it up.

I signed up to a LISA when I was 39 as MSE recommended them. I have a cash one, don't add much to it but the option is there if I want to.

what do you do with the physical gold later?

That is my weakness. I shop at Aldi but always find an excuse to nip to Tesco/Sainsburys/Coop and spend £30-£40 on nothing.

There are so, so many examples on this thread of how the rich get even richer in ways that are simply impossible for ordinary people.
eg. I bought a house at 24, or, we bought a holiday home because it worked out less than caravan holidays. This below is also a good example:

Putting the DCs Child Benefit into allshare tracker funds/CTF from 0-18. Then getting them to open LISAs at 18. Now they have tens of thousands to use for a decent house deposit.
Putting half of every raise onto the mortgage repayment each month, meant we paid it off in our 30s and have plenty of headroom to see the DCs through university

It is a huge privilege to have child benefit coming in that you don’t have to use straightaway.

Many of these money saving tips are only possible if you have ‘spare’ money but they are masquerading as ‘smart moves’.

@imaginedis Apologies - I should have stated that it was a cash LISA. I needed something stable at the time as it was for a house deposit, and I didn’t know enough about S&S.

@Indoctro thanks for explaining. It’s fascinating, never heard of it. Presumably you then insure it? Is that easy enough to do?

It is a huge privilege to have child benefit coming in that you don’t have to use straightaway.

I don't really understand how you can currently get child benefit but not need it as it's means tested. My parents saved mine for me but it was universal then.

Putting the DCs Child Benefit into allshare tracker funds/CTF from 0-18. Then getting them to open LISAs at 18. Now they have tens of thousands to use for a decent house deposit.

How much is tens of thousands considering additional children only get about £15 a week.

You can still get CB if you earn less than 50K pa, I think.

I agree you can only make some of these smart moves if you have enough cash sloshing around. But you can be on both credit crunch threads and on here.

Yes it's a sliding scale to 60k but childcare is prohibitively expensive & housing costs are so high that I'm surprised it's not needed. But I guess if you had your dc 20 years ago it was very different.

@Cocoaone

Same !

Mine started off in those sealed tins and I could only afford to put a few pounds in per month!
Then I actually used real envelopes and cash and for all other spends.
It really stabilised us but...we also had fun money set aside for takeaways etc.
Now DH has a spreadsheet and it's all done on line but it's a wonderful feeling isn't it to have these pots to draw on.

Another one who started paying into a pension early, I signed up in my post uni job at 24 (my dad was so proud of me!). I read somewhere that your pension contribution % should be half your age when you start and then keep it that for your working life. So I started at 12%, added a bit more after when I had payrises, and because I’d never had the money I never noticed it was missing.

Then in my mid thirties I realised that I was earning at least £10k more than I had been at 24, but without a huge increase in my essential outgoings, it had just been absorbed by lifestyle creep. So I decided to challenge myself to reverse the creep and save £10k in a year. A couple of years later I had a house deposit!

if I was doing it again I would prioritise saving for a house deposit from day one as well - but I did just assume I would meet someone and we would save and buy together, so I wasted some good saving/investing years. I haven’t been lucky to meet that person but I am financially independent on my own instead of having that worry.

It's means tested in a funny way though. A family with two parents working and earning £49k each will get the full amount, but a family with just one parent working and earning £50k won't (and once they earn £60k the family won't get any). So a family with a household income of £98k can get the full amount when a family earning £40k less won't.