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.

My biggest smart move didn't come from spare money. It was changing my mortgage to a lower rate product and overpaying with the difference, so no extra going out.

I also switch many things yearly. Gone are the days of loyalty discounts sadly. Insurances, breakdown cover etc. Infact if you do a breakdown cover change each year through Quidco, you can get massive savings. Like £60/£70.

AA breakdown also gets you discounts, Quidco is great. Nat West Rewards account. £2 per month and cashback that exceeds that from day 1.

My best financial move was investing in home insulation, draft proofing and solar panels for my small home rather than using the money to trade up to a larger house. I made the changes for environmental reasons mainly, but it has proved to be a sensible financial move too.

• Be very lucky and be able to afford to save a little bit each month.
• Realise deals are only deals if you were buying it anyway, not if you thought "Oh I won't be able to get it that cheap elsewhere", because you wouldn't have bought it.
• Make do and mend.
• Buy what you can afford and need, what not you want.
• 1% Cash back Credit Card paid off monthly.
• ISAs.
• Once you get to 3K in savings then you have just about enough to pay for any rainy day (Boiler / Car etc...) so after that each time it hits 4K, either pay more into your mortgage or into fixed rate long term savings or into shares.

Overpay mortgage when possible
Sim only phone contact
Use Cashback sites - Quidco, topcashback etc
YNAB
Set all DDs to go out same day of month.
Budget council tax and water rates for 12 months. Keep the money you've set aside in Feb, Mar to cover the following year's uplift.
Paid surveys for extra pocket money
Set up a pension early (I was 19).
Use loyalty points for treats - clubcard, nectar etc
Involve DC in all of this (age appropriate) to help tech them money skills.

@Hudsonriver
It is a simple fact of economics that almost all money is made from money. The days are long gone where simple hard work and smart decisions could set you up. I know this because I was brought up in a working class family. My parents were smart and on the ball and worked very, very hard all their lives and yet could not have made many of these 'smart' decisions, because you need some money to make them in the first place. They were not victims or fatalists, they were resourceful, ingenious people who saved and saved, they just didn't have the basic pot of money to start them off on the road of making more money.

DH came from a middle class family and does a job that he and his colleagues consider demanding and worth the money they earn (it is not). In his family and social circle people often talk in a self congratulatorily way about the fact that they have made it by themselves. But they haven't. Help from parents when you are doing an unpaid internship, a small inheritance to fund an MA, a little deposit for a first house from your god parents will. All these things help, and they mean that you can save and be careful and make sensible choices for starting a pension or buying a house young whilst at the same time really believing it's because you have self control and you are smart. I know this because I am now one of those privileged people. I have been able to make all of my smart decisions because of the safety net provided by money from DH and his family. And most of their money has been made from other money (eg. property price increases and inheritance) rather than their smart moves or 'hard work'.

I agree with you @Byfleet

We are over paying the tiny mortgage on my DHs flat so that we will reduce the term from 9 years to 5 which conveniently is when the 2.4% fix ends. The flat is for our retirement, it's a ground floor and fully accessible as I'm disabled so future proofing is important to us. Then we will have 3-4 years to totally hammer into the savings account for his retirement. He is already over paying into his pension at 15%.

I “pay myself” on pay day which means I have a standing order that goes straight to my savings account

I also set a reminder on my phone for 9pm the day before pay day (as unlikely to spend between then and when I get paid). Anything left in my account, after I take pending payments into account, also gets moved over. Even if it’s a few pounds it adds up

This. Also as an over 50s self employed person I put all my surplus direct into my pension, from my business before tax and the government adds 25%. I can take out 25% of the pension from age 55, so I see it as an extremely high interest paying savings account. However has to be said overall my pension is rubbish compared to friends in public sector jobs.

@Sausagedoggy Recommend a SIPP instead then as you'll get 20% govt top-up (or higher, dependent which tax band you're in)

I always transfer a set amount of money into my savings account on every pay day. I quite like the idea of calling it “paying myself”

Protecting your credit rating by paying mortgage on time every time even if you have to eat baked beans.
Avoiding a situation where you could become a forced seller of your home and have to accept a big discount...
Avoiding credit cards.
Living within your means.

Absolutely spot on, @Hudsonriver! I changed my mentality towards money completely in late 2019 which has been a revelation.

And I'm certainly not rich by any means, but not struggling either on less than £20k a year. Before 2019, I had zero savings. Now I have enough to last me several months should I lose my job at any point.

How we view things informs our behaviours. 100%.

Set up SIPPs and pay into pensions for my young adult kids when they were early twenties so at uni or in scrappy first jobs. Get them started before they start a long term career or employment. Explained to my son why it's good to pay the £60 odd quid to get another full years national insurance from when he had part time work. Always told them to join the company pension/ nest pension. Basically pensions!!

Look up Alvin Hall
His motto was " pay yourself first"

Fantastic @DownNative !

Just to be clear I do understand privilege @Byfleet but it's disempowering to place your chances in life as whether you are rich or not and give up based on that.
Most of us aren't rich!
Go onto MSE and look up the stories there, or Stepchange/ CAP
ML and SC/CAP don't hand people money on a plate they empower people to make changes based on their circumstances.

That's exactly it @Byfleet - I would have made better decisions in general and done things differently if I'd had any financial back up.

Yeah. I try and mentally really notice what I am coming away with at the till. The odd tenner quickly becomes a couple of hundred pounds over a month.

My tip would be to choose a partner who is on the same financial page as you. It’s hard to be the saver and always looking / thinking to the future when your DH doesn’t have the same attitude.

Absolutely! Not just a saver though but someone prepared to invest rather than just save and watch your savings erode. Neither would I cope with someone scroogelike who counts every penny, buys the cheapest everything and can't enjoy themselves.

Oh yes. We were fortunate enough to receive a significant inheritance from my husbands side - enough to clear the mortgage. DH was insistent that this is what we did, even though I tried to explain that we could do more with it than that. And I’m an accountant so have some idea what I’m talking about!

Since the mortgage has been paid off, he’s taken his career in a different direction as he “doesn’t need to earn so much” with no thought to pension or home improvements or kids uni fees or holidays or anything ahead of what his monthly “running” costs are. It’s frustrating and, to be honest, it makes me rethink the whole relationship 😔

Thank you for your honest post, and so sorry. Hope things look up for you very soon

Cashed out a final salary pension when the cash offer was really high about a year ago and bought an annuity with some of it now you annuity rates have gone up.

Following

@Puddywoodycat

Do you have a separate bank accounts for all pots?