What is the best financial decision you have made?

[Flyingfish111]

What is the best financial decision you have made and why?

If appropriate, has it helped you save for anything in particular?

Trying to rain in my spends and save as much as possible for a house deposit.. both myself and dp have a LISA and have done now for a few years!

I'm not so sure I have a best financial decision but one that stands out is staying at home during my time at university (of course there are downsides to this outside the financial remit) which means I will have paid off my student debt by the age of 35/36+ although I admit I wasn't as savvy as I wished I was in my 20s going on regular holidays and going out drinking etc!

Both myself and DP have also kept our savings in premium bonds and have worked out that we have won more than we would have gained interest, not a significant amount or a life changing amount but a small win all the same!

On the downside, DP is in a bit of a career rut at the moment, stuck in a particular 'specific' field in the civil service (his role is business support for a specific team with some project assistance work) and struggling to move upwards!!! Any other job in his field elsewhere is paid about 5k less. I know that this is something that is holding us back financially, something for my dp (with my support) to think about this year!

@Trinacham so are you overpaying the mortgage and then remortgaging over a longer period with lower monthly payments?

Worked overseas for 25 years.

Another thing I will be pleased with later, and can already see is a massive benefit, is working in the public sector and having a defined benefit pension. I will have got over 20 years in on the final salary version by the time McCloud extends these to April 2022 and then a few years on the Career Average scheme until I retire.

Reading up on it, the pension I will receive (most of it at 60 and some not until 67) would require a pension pot of well over £1m. My pension will be defined, index linked and includes life cover and survivors benefits. I will have never earned a significant sum and will have spent most of my working life as a part timer, but those pension schemes are good enough for me to retire early on and have a comfortable retirement with a pension far in excess of many highly paid private sector workers.

Lots of people move to the public sector for heir last 10 years for the pension. If you go to the Civil service and earn £43k per year, as the accrual rate is 1/43 you'd add £1k per year to your pension each year and have over £10k after 10 years. In the private sector, to get a pot which would yield £10k a year via an annuity or drawdown would probably need £400k-£500k and most won't accumulate that in 10 years!

Worked two jobs in my twenties and bought a flat. Now has tenants in it paying for itself.

DH and I live in a lovely house but could afford somewhere bigger, lots of friends are getting bigger houses with enormous mortgages while ours is almost paid off and we much prefer that.

Simplified our accounts. Separate account for DDs that all go out 1 week after payday. All spending is on a cashback credit card which is included in the DDs.
Wages in, transfer enough to DD account and the rest to savings. So nice and simple.

More by luck than judgment: had first baby in 1995, so while most of our friends were buying lovely 1 or 2-bed flats in nice areas we stretched ourselves to buy a huge but very run-down family house in a then-scruffy part of London on dh's salary as a newly-qualified teacher at what turned out to be the very bottom of the house-price curve.

Two years later our neighbours sold their one-and a half-bed ground floor flat for the same price we'd paid for the whole house.

Dave Ramsey and the cash envelope system. I did it for a couple of years, and now I do it digitally. Having a budget written down every month makes a huge difference for me.

Using a good financial advisor when I received a sizeable inheritance as at teenager.

@TheChild

When I got a new job I saved the increase in wage into a regular saver account that I couldn't access. We had never had the money so didn't miss it. It meant that after 2 years we had a 5% deposit for the flat we are in now, before I started that job we had nothing in savings and never thought we would be able to get on the property ladder.

Love this.

[quote PegasusReturns]@Trinacham so are you overpaying the mortgage and then remortgaging over a longer period with lower monthly payments?[/quote]
No. Kept the term the same (because we weren't sure when kids would come along, so didn't want higher monthly payments, so didn't want a shorter term if you see what I mean). We are on our way to being mortgage free in 2023, depending on whether a baby does come along in the mean time. If the latter does happen sooner, our mortgage will be about 20k, so either way we're comfortable!

Just moved 5 miles and halved our outgoings. Having thrown everything we had trying to maintain a 400 yr old cottage with eye watering bills we’ve moved over a county border, into a huge 1930s semi and we are finally comfortable!

Using a good financial advisor when I received a sizeable inheritance as at teenager

Second the use of a good advisor. I didn’t really use one until I was looking at quite complex issues with my business. But there would have been value in using one years earlier.

If you can’t afford a FI then there’s loads of really good podcasts which can give you an overview. Financial education will be a priority for my DC

I agree with you up to a point re the public sector WombatChocolate but I have twice now exceeded my annual allowance limit due to promotions! Nevertheless I have no complaints. However with a private pension fund some of the money can be drawn down to avoid cgt and iht, so it depends how one's finances are structured.

Yes, totally agree about need to be fully aware with pensions re annual allowance, lifetime allowance, tax implications etc.

For many on moderate salaries, a public sector final salary pension can deliver a decent retirement. Apparently the average pension pot from defined contribution pensions is only about £50k and will deliver a puny income in retirement. Fully agree that if your pension is looking good you might also need SiPPs or S and S ISAs as additional ways to save and fund retirement too, plus these give the flexibility to retire early and fund it before the public sector pensions pay out at 60/65/67 (although of course actuality reduced pensions are available from 55 and later from 10 years before state retirement age)

Now I know my occupational pension will be decent, plus I will get the full 35 years of NI to give me the £9k state pension at 67, plus Inhabe some spare money for saving, I’m also going for SiPPs and ISAs in a small way too...will fund a couple of years of retirement before the public sector pension pays out at 60,

Also something to consider, the civil service pension scheme is excellent. So that’s something you would need to factor in on top when considering other jobs.

To get rid of my husband. I'm not at all joking.

@Bagelsandbrie I love that you bought a ring. If it makes you happy every time you look at it, why the hell not!

My best financial decision was putting as much as possible into a pension during my twenties. It’s amazing how much it grows and it has taken the pressure off worrying about starting one in my thirties. (Fairly well paid job and company matched 4% of contribution)

Overpaying mortgage, bitcoin and moving a pension from a diabolical record of growth into a sipps pension

Being financially independent & not relying on anyone else, working FT

Paying into a private pension

Saved up & bought property

Lived within my means always

Marrying my DH! We met as poor students but over the years he has been incredibly successful at work and we are now very comfortable. He is also good at maximising our finances.

Stretching ourselves to buy a large family home in the late 1990s. Prices shot up straight after.

Realising I no longer needed life insurance so switching the premiums to income protection instead, then one year later getting ill with ME/CFS which means I may never work again. If I’d left it where it was or chosen critical illness I wouldn’t be covered.

Taking out Critical illness cover on my DH and I, now as we look to the future I'm glad we have life cover.

It's not cheerful thought knowing you have enough cover, however it's peace of mind to know the family is secure.

Keeping an agreement with an ex to keep a joint property together until I could buy him out. It was tough emotionally, but meant I solely owned it (with mortgage) in my twenties once my salary increased enough.

I have made plenty of money mistakes, but buying at 21 was my best decision.

Continuing to work when I had children. it was hard and at times very expensive, but it meant that I retained my independence, have grown my pension, developed a career that I love, and was able to divorce my H

I will never understand why women put themselves in the position of being reliant on a man, unable to divorce, and without their own income and independence.

Mine was listening to colleagues when I started work at 17 who encouraged me to joint the pension scheme. Not something that was high on my spending priority list at that age but 40 years later I am so glad I started early as now retiring early with no money worries at all