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.

Really need to do this!

My smartest move was to start proper budgeting. I am using the YNAB app which links directly to my current account and our spending credit card. I've got a family budget and also one for my money.

We are in the fortunate position of having enough to cover everything essential but were constantly dipping into savings for annual bills eg car services, insurances etc.

I now know exactly where every penny is going and we're so much more stable now.

@LadyWithLapdog
you can hold it in a vault if you have large amounts, or hide it somewhere . The risk you take is a personal choice. Yes you can also insure if you wish.

@PackedlunchofRishiSunak

Imagine though if the government gave all children on CB an additional sum into a sipp, at birth, into index trackers, it would certainly ease cost of living crisis wouldn't it! .

I just looked at the Govt LISA page - it says the first home needs to cost £450,000 or less - that is a lot but we live in London

Yes, that's one of the issues & I would say in this economic climate with FTBs being older it's better to skip the flat stage & go straight to a house, particularly if someone wants dc.

Can we just remember that “not having a credit card” is NOT a good thing and is NOT a useful tip (unless you’re a spender that can’t control themselves)

Fusion same. Every pay day money flies into a the pots.
All that's left for me is the ocado budgets (which is still too high). Every single penny is accounted for however,it goes to nice thing's too like Xmas /holdidays, weekend spending.

I was in house of people worth a lot of money and the wife was complaining that she needed a new chair but her DH wouldn't buy one.
I was astonished that they didn't have their money organised??
If I needed a new chair I could see exactly what we have from which pot

There will be households earning up to £90k (ish, can't remember the exact cut off assuming two income household) who qualify for full CB. I doubt all of them are spending every penny of income every month with no savings.

Oh I didn't mean that someone earning that lived paycheque to paycheque just that when we paying high childcare we couldn't have saved for emergency fund, long term savings, maxed pension contributions, avcs & put away all CB if we got it. The vast majority of my savings have accumulated since dc started school.

new distributions are 40% US(S&P 500), 30% uk/europe(ftse100 and a low fee vanguard index of ex-uk eu stocks), and remainder in bonds or Asia (index of Japan and ex-Japan).

us has massively outperformed the rest, so probably should rebalance, but I think the us is likely to do better than the rest (from a market performance standpoint) than the rest at bouncing back from current difficulties.

This was the standard way to buy a house up till around 20 years ago. The investment plan for capital was called an Endowment plan. It wrapped in a life insurance aspect and may include a “ with profits” aspect that passed on any capital gained above the capital needed to buy your house at end of term
on the face of it a good idea
but only if market performance on sum invested, outstrips mortgage repayment totals.
They were quite rightly phased out during 2000 as literally millions of people were being told the product they’d invested into for years wouldn’t come close to paying of capital. This was because the market was not performing even at the lowest investment promise made. It led to many repossessions, and millions of people having to switch to repayment mortgages despite the money they’d wasted in the endowments. Since then interest only mortgages are considered very high risk unless you’re already wealthy and could afford to buy for cash anyway. Most banks, quite rightly, won’t allow them.
people of my parents generation who bought with endowments during 70s and paid off in 90s, did extremely well from them, with nice “ with profits” payments at same time mortgage was paid off.

we sold our endowments, despite general,advice, in early 2000s ( we’d already switched to repayment in mid 90s). Now that was a sensible decision and one we calculated thoroughly. They wiped off about 7 years of mortgage term for us- but only because some were close to maturity and e hunted down the best auction price for them.

And obviously 65k today is not worth anything like it was 10 years ago.

I’ve got 3 to share.

starting a side hustle.

Monzo savings pots. I have them for EVERYTHING! When I get spare money (see number one) I split it up into different pots. I have things like home renovations but also things like money for Black Friday sales.

overpaying my mortgage. I know not everyone can and number one helps me with this but even a tenner a month can shave a year off my mortgage.

But if one parent is ever not working for a period of time you still get their NI contributions paid so even if the net income is £0 it is still worth claiming. You don’t know what could happen in the future 18 years.

@Labraradabrador thank you I will have a look. I have some vanguard life strategy ones & a global one but only for 2 years & the performance hasn't been great. I also have some invested myself through Freetrade incl some ones mentioned above eg Rio T, BHP but performance also isn't great.

I've only know low interest rates as an adult, when interest rates are higher do s&s perform as well or is it less attractive?

It’s just with a generic investment company that I have my own pension with. But places like Hargreaves Lansdown do them too.

I downgraded my annual roadside recovery membership from having an all singing and all dancing cover which was not value for money to me, to a very basic local cover. I hardly drive now due to WFH and my car is old so I only drive locally. Anyway I saved over £200.

@Kennykenkencat I don't understand your point? Of course someone not working should claim it.
But my point is if you earn a certain amount you are not eligible for CB.

The best financial move I made was to subscribe to Money Saving Expert emails, so many of my good choices since then have stemmed from there. Also Monica's rich boyfriend in Friends (Tom Sellack) said always save 10% of your income which I've stuck to no matter how little I've had.

I'm at the top end of low income, single parent to one teen DD.
£5 a week + round ups to my Moneybox LISA for pension purposes
£25 a month to Premium bonds, I normally withdraw this to pay for any Mot repairs or car insurance.
£50 a month to the Help to Save scheme.

Maintaining good relationships with my parents has also helped me massively financially.
Left an abusive relationship when pregnant then focusing on improving DDs and my life and not dating/ having more children.
My parents provided most of my childcare when DD was younger.
Parents gave me an interest free loan when they inherited money from sale of GP house to buy a small property so DD and I could be secure - they didn't need the money then and there but would do for their own retirement in 20 years so I pay it back in small monthly installments which means I've been able to also build up my own savings and do things I couldn't with market rate rent or mortgage.

Post covid - pre Ukraine war following a couple of payrises I was looking at potentially moving and getting a mortgage on a bigger house - partly as I have new neighbours and the mother continually verbally abuses her very young children and nobody seems to care and partly because lots of work needs doing to update the place. DP advised against it, said improve kitchen and bathroom where I am and I'm glad I did because that mortgage I could afford last year would be completely unaffordable with the Cost of Living crisis.

Since then interest only mortgages are considered very high risk unless you’re already wealthy and could afford to buy for cash anyway. Most banks, quite rightly, won’t allow them.

My parents had an interest only mortgage, close to 100% I think. It seems crazy but massively paid off for them.

@yogiil but the cut off point for CB is still very high isn't it (maybe not high by London standards admittedly) £50k for one earner but two earners who each get £49k also get it.

@Singleandproud sorry I will get lambasted for this but I don't think 50k is a particularly high salary today in terms of actual living expenses particularly housing. Plenty of jobs that paid that 15 yrs ago still pay that, there has been real wage stagnation & of course as the tax bands have been frozen for years you pay more stealthily.

Hi @Indoctro , thanks for indulging me and replying.

@yogiil I live on £19k after tax so see £50k as a fortune as that's twice my earnings but as I said I understand in London it wouldn't go as far, I live in a much cheaper area.

The government does still top up LISAs. I put the money in premium bonds and then move it to my LISA in Feb (Moneybox deadline for topping up each tax year). You get the same bonus however you spread your payments - you can deposit up to £4k a year and get up to £1k bonus.

Pay into savings a set amount on payday rather than seeing "what's left" at the end of the month.

Being realistic about how much time we have to do stuff...e.g. every now and then I think "I should do a car boot sale/sell stuff on ebay" but it takes up so much time organising/never makes that much money. It always works out better DH doing an over time shift instead and just giving our old stuff to the charity shop.