Your financial rules.

[PaulSB]

I feel this is relevant in here. My wife is terminally ill and may only have two or three months left. We don't know as she's defied every prognosis to date. She's one tough lady. On a practical level this means the loss of 55% of household income. It won't be as severe as that sounds as I will receive a survivor's benefit which will be between 33 and 50% of her NHS pension. Add to this I have a pension fund from which I don't currently take an income, I'm investigating how best to access this and questioning if I use this or live off capital. Quite a big question as the pension is taxable and the capital spend would not be.

That's the background. Over the last 12 months I have focused on a future budget to understand my solo costs. In common with many when we were younger we had two bank accounts, one current, the other savings into which we monthly paid 1/12th of our salary to cover annual expenses etc. It worked to an extent but never very well......................not least in the month Mrs P accidentally used the wrong cheque book and card.

I've discovered Monzo. I really like this bank and the very practical services offered. I now run a Monzo account alongside my main c/a and transfer a fixed amount to Monzo monthly. This then automatically splits into Savings Pots, each with 3.15% interest. The organisation is more important to me than the % interest. The user names the pots individually, adds a £££ target, target date and monthly transfer amount (usually 1/12th for me). For example I have a Home Insurance pot, target date is December, target ££££ is £450 and Monzo shows me I have reached 94% of the target. I'm finding this a very good way to save/budget for annual and bi-annual costs. When the Home Insurance is paid, the pot will empty, I can then use the current figure for my 2027 target, adjust the target date etc.

I'm finding this an excellent way to budget. I have £1600 stashed away towards annual costs, can view progress per pot, adjust the transfer rate etc if I wish. In 11 months I haven't once been tempted to raid a pot. Typical pots are car service and MOT, VED, car insurance, Christmas, birthdays, TV licence, cycling subscriptions; basically all the small costs that can come as surprise and throw out a monthly financial plan.

I'm currently running 14 pots.....................the most important of which is the monthly cafe stop fund!!!!!

 

[Gunk]

My two financial rules (not working in the public sector) was to shovel as much as could into my private pension and over pay on my mortgage to get rid as quickly as possible.

Once you are genuinely financially free, your life is so much easier.

 

[nogoodnamesleft]

and over pay on my mortgage to get rid as quickly as possible.

Advice I would echo to all mortgage holders. Everybody has financial constraints but as much as possible as early as possible and it can make a massive difference.

In my case (from many years ago and having avoided the Endowment Mortgages so popular back then) I had full flexibility but subsequently have been told that these days mortgages are more "constrained" and flexibility on repaying early can be limited. I'm unsure of what options are available today but at one point over-payments were only relevant when next years instalments were calculated so ef if recalculation done 1 Jan then instead on repaying through the year, you were better putting the extra you could afford into an instant access savings accvount then use that to repay in Dec ready for the recalculation.

But much has changed these days so my understanding as to what people can do is probably way out-of-date.

 

[SpokeyDokey]

Advice I would echo to all mortgage holders. Everybody has financial constraints but as much as possible as early as possible and it can make a massive difference.

In my case (from many years ago and having avoided the Endowment Mortgages so popular back then) I had full flexibility but subsequently have been told that these days mortgages are more "constrained" and flexibility on repaying early can be limited. I'm unsure of what options are available today but at one point over-payments were only relevant when next years instalments were calculated so ef if recalculation done 1 Jan then instead on repaying through the year, you were better putting the extra you could afford into an instant access savings accvount then use that to repay in Dec ready for the recalculation.

But much has changed these days so my understanding as to what people can do is probably way out-of-date.

We had an old Direct Line flexible mortgage that we took out back in the day - overpay when you like, take it back when you like.

We almost paid it off about 15 years early but kept it owing about £1k (£13 per month) until it's full term expired. The theory was that if we needed some short term cheap money, then it was there.

Never used the 'facility' but it was nice to have it there.

 

[nogoodnamesleft]

We almost paid it off about 15 years early but kept it owing about £1k (£13 per month) until it's full term expired. The theory was that if we needed some short term cheap money, then it was there.

I also left mine open owing just £1 (or something trivial) more because as the mortgage was still active the Building Society kept the "deeds" and for my house back then they were an A4 "book" several inches thick (and very complex apparently). Saved me the cost of having to find somewhere safe to transfer them to for safe storage.

 

[SpokeyDokey]

I also left mine open owing just £1 (or something trivial) more because as the mortgage was still active the Building Society kept the "deeds" and for my house back then they were an A4 "book" several inches thick (and very complex apparently). Saved me the cost of having to find somewhere safe to transfer them to for safe storage.

We got our thick slab of Title Deeds sent to us before our mortgage ended.

Fuzzy memory but I think most lenders did it because proof of title switched to online.

The paper deeds are an interesting read but are meaningless now, AFAIK.

We also have a downloaded copy of the electronic version - only costs a few quid.

 

[SpokeyDokey]

Thus far into the thread we do seem to be a thoroughly sensible and pragmatic membership.

A product of a relatively aged & wiser population or something else?

Were we more financially feckless in our younger years?

We both grew up poor and have always been sensible with money & commited savers, and careful spenders, as a result of this. Our offspring are the complete opposite, sadly.

 

[Pat "5mph"]

For those of you who getting on a bit and have lots of savings/ investments. What provision have you made so all your money doesn’t go in to paying your care home fees.🫣

It's a thought!
I don't have immediate family, but would like to leave something to charity and to friends.
I guess, let's hope for the best!

Care fee annuity. In oversimplified terms its an insurance policy to cover such fees.

Ill be taking hostages and going for suicide by cop before you get me in a home.

I didn't know such an insurance existed, probably too late for me now, the premiums would be astronomical at 63 years old.
@Drago you obviously think there's a possibility you could end up in a home, otherwise you wouldn't have taken out that insurance.
Sadly, if we get dementia we won't even be able to commit suicide, we won't have the mental awareness.

Were we more financially feckless in our younger years?

Not me, I had several thousands in the bank in my early 20's, working in a low paid job but earning good tips.
Then, at 30, I thought I was in love: he and I had different financial views!
I was skinned till we parted ways, in my early 40's.
Took me years to get back to where I wanted to be financially!
Never mind, it was life experience.