What’s an “unpopular” spending or money decision that actually works well for you?

[HonestTealPoster]

For me, it’s not budgeting. I’ve tried it before and found it quite stressful, I ended up overthinking every purchase. These days I don’t follow a strict budget. I just spend fairly naturally and because I’m quite frugal anyway, I still tend to save more than I spend.

Is there anything you do that might go against the usual advice but works for you?

Purchased an ex-council house on the edge of the local estate when our first child was 5 months old. 4 bedrooms and 80 foot garden was £58,000 in 1996. Mortgage was paid off within 20 years and we’ve never moved as we have all the space we need. People just can’t understand why we’re still here and haven’t moved to a ‘better area’. However, we’ve both just retired (aged 54) and have lots of disposable income for fun, meals out and holidays. Won’t touch our pensions for at least another 12 years 😊

I don't buy or join in rounds of drinks as a general rule.

If there is only two of you then it's different obvs, that's not a "round".

We came to the same conclusion as you on pet insurance. As you say it’s a gamble, but we’ve also saved thousands and reckon that if something serious came up we’d probably still be quids in or break even over having paid out on years of pet insurance.

I ask for jewellery for Birthdays and Christmas presents from people! It holds its value, lasts a lifetime and could be liquidated into cash in an emergency.

I mostly wear silver jewellery (I am allergic to 9ct gold) and in the last year it’s doubled in value.

It will also be a nice collection to hand down to my Daughters, and each piece holds a special memory!

Yes many finance gurus online dont advise it either, but I have yet to hear a convincing reason as to why not.

It is quite suspicious isnt it!

My mortgage was 0.68%, my investments earned 14%.

Are you in the UK?

This just doesn’t work where I live. I used to do it pre Covid now there are only 3 places I can use cash - the car wash, barbers and local pet food supplier.

So your Tesco or wherever refuses cash?

It’s not about being “convincing”, it’s just different people having different priorities. The mortgage is not my priority, and my advice to others who have young children is to prioritise living and memories; I’m not trying to convince you or any one else of anything, completely ignore it or relate to it, your call.

Finance gurus will likely be advising from the point of viewing of paying down the most expensive debt of which it might not have been the mortgage the last few years, or savings/investment was a better use of money, again it’s not about “convincing” you, they’re just being factual, if you’re someone who feels burdened by the mortgage, you’ll have a different priority.

It's not just about those percentages though, actual figures matter.

As well as that, whatever % you're paying to a mortgage provider, is still money going to them that could be invested to grow an investment portfolio instead.

It doesn't make any difference what the actual figures are

If the % return is higher, you make more through investments than you lose in mortgage interest

I've been fortunate in never having HAD to budget. But I have quite frugal tastes. I never throw anything out while it's still working, even if it is a bit tatty!

I STRONGLY believe in giving away a minimum of 10 percent of my income! Practiced this for over 3 decades!!!

I don't believe in fixing my interest rate on a mortgage. I have always got discounted floating rates or trackers.

That is because dh and I are in a strong credit position and can pretty much get the lowest rate tracker in the market. Hence, we take the risk that the interest goes up mid-term because if it did, it should within reason be affordable.

The reasoning behind this is to take the bird in hand of current lower rates. If interest rates were to subsequently rise, we would already have had a period of low rates to offset the rise and hence we could still come out quids in before the end of the discount period.

You only do well on fixed rates if at the time you fix, interest rates happen to be relatively low. Otherwise you will be stuck with a high fix for up to 5 years!

Spending on credit cards. I know how much I have left over from pay after bills each month. So spend on the credit cards up to this (minus any savings i set aside) I get cashback from credit cards, put all pay in an instant savings account and only pay the card off in full each month just before the due date. I earn quite a bit each year basically doubling my interest on money that if spent from a debit card as I go, I wouldn't earn a penny off.

Not good advise for someone who isn't good with controlling their spending as I can see how some people could end up in a hole with this. But works for me

Hello Fresh once a fortnight..actually saves me money.

Yep, we do exactly the same, I have no idea what he earns either, or spends...most people frown at it, we've been married 33yrs

I buy a new car and run it to its death
Dont care about depreciation it wasn't and investment piece. Its a car for getting to work and back

But one of you is more generous i bet. And the other more petty, taking advantage ;) If you are happy with it i bet you ars the petty one lol. just joking...i admire this arrangement if its working for you

I don't budget because it would make life not worth living for me. I simply can't stick to a plan, or even remember it. Instead I "navigate" my finances in a vague direction.

It's not the recommended approach, but it works for me. I could probably spend less and save more if I was stricter, but I don't live that way. I enjoy living this way.

I'm not bothered about size of house, car, holidays, or any luxuries. I don't have expensive clothes, handbags, jewellery. I don't go for any grooming stuff like nails, bottom or even haircuts. I don't travel much.

So it works.

We don’t buy into all the “experiences” that families are sold these days: Breakfast with Santa, Easter presents, Christmas Eve boxes , pumpkin picking etc. It’s a personal choice but I’ve had other mums act surprised that we don’t

I don't believe in investing in property or buy-to-lets. I do not want the hassle of being a landlord.

We have a home. It is no bigger than what we need to be comfortable for the size of our family. The rest in invested in Stocks & Shares ISAs and Pensions (basically low cost index funds). Our investments have done very nicely over the past 20-30 years. It is almost shocking how much they are worth now compared to what we put in. So in terms of capital growth, I think we are doing alright compared to property but for zero hassle and grief.

Cycle instead of taking the car.

But I do take the car, I am very mindful of the congestion charge. I choose my route carefully and leave home 30 minutes earlier to get into work at 7:10. Saves about 50 p a day. Over the course of the winter months, that'll be about a 60 quid. Actually now I have written down, I may as well get extra sleep 😂

An unpopular opinion, with my parents at least, is that I buy just what I want/need at full price rather than buying stuff that isn’t quite the thing I want/need but has a reduction or yellow sticker on it.

It literally took me years to get out of the mindset of ‘getting a bargain’ to realise that buying say some jeans in a style I didn’t want, because they were £10 cheaper than the style I did want, wasn’t saving money because I wouldn’t want to wear them and I’d end up buying another pair of jeans weeks later because they were in a sale. So now I just buy the one more expensive pair and I don’t feel the need to buy any others.

Of course the figures make a difference, 0.68% on a mortgage of £500K+, and 14% from £10K of investments would make it foolish to not pay down the mortgage. You're literally giving money to the bank, when you could have it cleared off, and keeping that money to build wealth instead.

Having a low interest rate mortgage and high yield through investments doesn't automatically mean it's better not to pay off the mortgage.