Your financial rules.

[Drago]

Stuff like a home phone or mobile phone contract, paying your car insurance monthly instead of in one hit, etc, will all boost your credit rating without the need to take a loan or a credit card.

 

[gbb]

It's a bit swings and roundabouts I think.

I don't think there is anything wrong with your approach, but it suits a certain type of person. On the one hand, it's good to manage your money, but on the other hand you could be dead tomorrow.

As I mentioned in another thread, my dad died aged 44, about 8 days before his birthday. He'd never been anywhere except Ireland, Jersey and Norway. Since I met my wife we've been to Malaysia (twice), Disneyworld and associated attractions 4 times, Slovenia, Croatia, Italy, France, Mauritius, Portugal, Spain, Germany, Canada and have so many memories from our holidays, nice hotels, fun times with the kids etc.

I could have just been like my parents and gone to Wales or Devon every year. We'd have paid off the mortgage by now.

Personally I'd rather have had the holidays, the fun and the memories. You're only young once, and if you are unlucky you don't get to be old.

Its al swings and roundabouts thats true, no right, no wrong whichever route you take, its what suits the individual. as long as its under control

 

[SpokeyDokey]

A couple of thoughts:

We don't generally consider our savings/investments as money to spend. Rather they are an income producer, the product of which, we do use to spend. Obviously, in the unlikely event that we would need to, we would 'dip in' to our reserves. We have managed our money, etc, in this fashion for several decades and it has worked well for us.

Cash ISA's - do many holders consolidate their holdings into 1 ISA or do they have multiple ISA's?

We have ours spread across a wide range of providers and of different values within each provider. Partly the result of investing whenever we have had spare chunks of cash and partly because we like to have some lower value ISA's that, should we have to break into them, the penalty hit would be of a relatively low value.

 

[nogoodnamesleft]

We don't generally consider our savings/investments as money to spend. Rather they are an income producer, the product of which, we do use to spend. Obviously, in the unlikely event that we would need to, we would 'dip in' to our reserves. We have managed our money, etc, in this fashion for several decades and it has worked well for us.

I used to think like that but found it gets a bit "intangible". Do you maintain the investment relative to inflation? ie only take the interest amount after the capital has manintained itself against inflation? And then do you look at CPI or the inflation applicable to your lifestyle (eg recently food inflation has been somewhat above CPI but not lower ...).

But keep capital at the same number of £ and in effect over time you are dipping into savings ...

Hence for me it became "intangible".

 

[PaulSB]

What is the key rule that you apply to the management of your finances? Just one, not a list...

Never buy something one cannot afford nor use credit for day to day living costs. In other words only put the weekly shop on a credit card if you pay it off at the month end.

In our household our financial management has varied over the decades. Young, three kids and skint we would work out the monthly budget every month. That was broken down per week for the month. We had "the book" in which every penny spent was recorded. If the weekly budget was £80 and we spent £100 the following week we only spent £60.

When the kids left we enjoyed ourselves while boosting pension contributions and paying off the mortgage.

Now retired we're lucky to have a good pension income and have enjoyed it but avoided spending capital.

In the near future my wife will pass, the household income will reduce and I'll have to look at budget planning once again.

 

[SpokeyDokey]

I used to think like that but found it gets a bit "intangible". Do you maintain the investment relative to inflation? ie only take the interest amount after the capital has manintained itself against inflation? And then do you look at CPI or the inflation applicable to your lifestyle (eg recently food inflation has been somewhat above CPI but not lower ...).

But keep capital at the same number of £ and in effect over time you are dipping into savings ...

Hence for me it became "intangible".

We maintain the appropriate capital amount to counter the effect of inflation. We take the rate of inflation as that generally recognised by the BoE, etc. Doesn't need to be hyper-accurate just ballpark.

 

[Pat "5mph"]

I've never used credit yet got a mortgage offer no problem. It would be a very unfair system if those of us who simply managed to stay out of debt were penalised when a mortgage is needed. I suspect "you need credit to get credit" is advice discretely provided by credit card companies?

30 years ago, on applying for my first mortgage, the bank only wanted a few wages slips and savings for a deposit of £500 (haha, those were the days!), not even utility bills - I was sharing a flat with a friend anyway, all the bills were in her name, I couldn't have produced a bill in my name.
Fast forward to 15 years ago, at the time I wasn't using CCs or had loans, even though I had had in the past.
I wanted to change my Internet provider, got refused for not having a credit history!
Go figure.

 

[tyred]

It must be the fact that i pay my bills that has resulted in me having a good credit rating despite never using a credit card or taken out a loan.
Would a lender say 'yes' to an agreement in principal, and go onto making a mortgage offer without being satisfied with my credit rating?

I never had a loan or anything like that, I always tend to deal in cash so all the bank seen were my ATM withdrawals. They did questione about it and said it would have been easier if I had have had a car loan or something, but they still gave me a mortgage.