What are Help to Buy ISAs?

The governments new 'Help to Buy ISA" is launching on December 1. Today's post will explain what this new financial product is and who is is best for. 

ISA are Individual Savings Accounts they allow for tax free savings up the cap set by the government each financial year.  The Help to Buy ISA is very similar to a cash ISA but there is the opportunity for a bonus. Individuals can save up to £200 a month with an initial deposit of up to £1000 and received a 25% bond.  The maximum that can be saved and receive a bonus is £12,000 and this is topped up to £15,000 when the saver goes to buy a home. 

The property must be less than $250,000 in London or £250,000 elsewhere. The money must go towards a deposit and not other fees to be able to receive the bonus. 

It is still not clear how interest rate will fluctuate for these ISAs as It was seen with Junior ISAs that shortly after their introductions rates decreased significantly. 

It is also not clear how much of your overall ISA allowance you can contribute to Help to Buy and if you will be able to contribute beyond the £12,000.

The ISA is individual, not based on your household. So both you and your partner (or whoever else you plan on purchasing a house with) could take our a Help to Buy ISA provided that you are both first time buyers. 

Be aware you cannot open a a cash ISA and HTB in the same tax year. If you have a cash ISA opened this year then it will need to be closed and the balance transferred before opening up a HTB or just wait until the next financial year to start.  Though some banks are offering a split ISA allowing you to hold a cash and HTB ISA at present Nationwide offers the best interest rate for this product. 

Several banks have signed up to offer the product. Halifax as of present offers the best rates at 4% interest and you are able to transfer the balance of a cash ISA towards the £1000 deposit. 

How to set and achieve your savings goals

Setting goals is a fundamental element to any budget. When you are working to get out of debt this is the primary goal. However, its easy to feel lost after you've gotten out of debt and it is therefore, important to set yourself some financial goals. 

These goals should be a mixture of short, medium and long term. But try not to have too many goals (about 5 in total is best). A common shorter term goal is often having a large emergency fund (of about 6 months to a year worth of expenses). However, you may also wish to save for other things such as DIY projects or holidays. 

Mid-term goals may include paying off you house, or saving for a down payment if your are yet to get onto the property market. Whilst longer term goals may be retirement, children's college and school funds. 

Whatever goals you choose to set it is important that they are attainable. Below are some top tips to making this goals achievable

• Have a start date- it is so easy to postpone and procrastinate about starting to do something. Stop talking and start acting. Even if it means simply setting up a standing order to a savings account for the money to come out in the near future. Taking a positive action towards a goal is rewarding and has the same snowball effect as when paying of debt.
• Have a end date- There will be points at which it is hard to maintain the goal and it seems like the easier option is to just quit. Having an end date to aim for helps with this. An end may be a time or a financial amount. It will also help you to calculate how much you need to save on monthly basis (or however often you save). 
• Make sure the goals you have set are for you and your family. If you are setting a goals so you can 'keep up with the Jones' then it will be destined for failure. 
• Use a visual- I love spreadsheets and these help me to visualise our finical situation and I also find them very motivating. However, some people like to use visual progress charts. 
• Celebrate achieving a goal and break goals into smaller goals worth celebrating. 
• Keep your savings system as simple as possible- having regular payments on standing order is usually the easiest way to manage a savings goal 
• Dont overly restrict- Now you are out of debt, not every penny you have has to go towards your goals. Don't overload yourself with pressure but allow some money in your budget to enjoy life with. 

What financial goals do you have at the moment?

Why life is better debt free

We are loving being debt free and the blessings it has brought into our lives. We are thankful for our journey to becoming debt free and hope that the lessons we have learned will stay with us throughout our lives (and prevent us getting into more debt). Today we are sharing some of the reasons why we are loving life so much now we are debt free. 

1. We can plan for our future
We are in a position now where we are able to plan for our futures. For us this involves getting our masters debt free and saving for a house deposit. Before when there was debt in the situation that had to be the priority of the focus and it detracted from our goals of the future. 

2. The burden is lighter
We don't have to worry about who we owe. We don't feel enslaved to a lender (Proverbs 22:7). We can live our lives as we want not bound by the constraints of another. The budget is able to be a little bit more relaxed and luxuries we cut out we can enjoy every now and again. The stress is considerably less, there is no worrying about going into overdrafts (incidentally C has now cancelling his overdraft when we got rid of the card). Less stress means less of a strain on our relationship. Rows about money just don't seem to happen anymore, we are on the same page and working towards the same goals. 

3. We can do things we enjoy
We can do activities or go on date nights without it being an issue. Since being debt free we can allocate more money to these areas of the budget (without going overboard). We are looking forward to visiting extended family over the Christmas holidays when we plan to go on a short road trip. These are treats that we can afford to include in the budget now we don't have to worry about paying down debt. 

4. We can give more generously
My family instilled in me the importance of giving to charity when you can and for many years sponsored children in less fortunate financial situations. When you live paycheck to paycheck there is little or no room in the budget to give. When we give we both give and receive blessings in our lives, being in a position to give is such a rewarding experience. Being able to pay it forward is such a wonderful way to make use of your money. 

What do you love about being debt free

1 simple tip to reduce food waste

Sometimes it can be hard to avoid food waste, even if you are diligent with your meal planning. You may have not needed as much as you expected, or unexpected been out of the house and not eaten a certain meal. But this shouldn't mean that we have to let good food go to waste. Today I'll share my favourite tip for avoiding food waste by turning leftovers into delicious meals. Granted this really only applies to vegetables (but for us this is where most of our food waste occurs).

Turn it into soup

Winter is coming and soups are a great dish for all the family. Plus put them in Tupperware and they store really well in the freezer. Soups are so simple to make and it doesnt matter if your food is no longer looking its best. They are great for pack-lunches and if you don't have a microwave at work/college then consider taking it in a thermos flask. Below I'm sharing one of my favourite recipes as we find carrots can be going off but are still great for in a soup. 

Simple carrot and coriander soup recipe

Ingredients
1lb of carrots
2 pint of stock
1-2 onions sliced
Coriander to season (fresh is preferable but not essential)
Little bit of butter/ oil

Method

1. Brown the onion in the butter oil for a few minutes.
2. Add the carrots and the stock and bring to the boil.
3. Allow to simmer until carrots are soft.
4. Blend the soup to the desired smoothness.
5. Add coriander to season.
6. N.B you can also use a slow cooker to cook the soup in. 

How to store your soup
- Store in an air tight container in the fridge for 2-3 days
- Store in tupperware in the freezer for up to a month
- For easy portioning pour into plastic cups and freeze. Then once frozen take out of the cups and put in a zip lock bag- I saw this idea on Pinterest a while ago and love it. This works even better with silicone cups as it means you can reuse them time and time again. 

How to reduce your water bill

The cost of utilities can feel like its spiralling out of control. But utilities bills are one of the easiest areas we can save money. Making a few simple changes to your habits can have a big impact on your bill. This tips are especially useful if you are on a meter bill rather than direct debits. Check out this tips to cut your water bill.

1. Hand-wash rather than using a dishwasher. Using a bowl of water uses considerably less water that washing using a dishwasher. Consider (depending on the size of your family) washing up every other day (or every few days) so that the water goes further and washes up more. Plus hand washing saves on the electric bill as well.
2. Shower rather than bath. Showers are much more efficient, and the shorter the shower the more efficient, try to keep them less than 4 minutes. We alternate shower days with 'strip-wash' days which use even less water and completely avoid filling the bath. 
3. Use your washing machine when it is full. Be efficient with your washing, putting it on when the load is full rather than doing lots of little loads. I find that if I'm going to run out of anything it is underwear so I will often hand wash this if I have run out. If you find it hard to get a full load try using a colour catcher so you can put both dark and light clothing in the same wash
4. Car wash with a bucket. Using a bucket and sponge rather than a hose when car washing is a much more efficient way of using water. Using a hose can use unto 140 gallons when washing your car, using a bucket is a fraction of this amount. If you can't use a bucket try getting an automatic shut off nozzle as this can save up to 70 gallons per wash.
5. Collect rain water. Using a water but to collect water for use in the garden and for washing your car isa  grey way to reduce you bill as these are activities that do not required sanitised water. What you are really paying for in you water bill is the cost of purifying and distributing the water so why not use the free stuff when you can. 
6. Flush efficiently. People used to put bricks in to displace water and reduce the amount being used when fluxed however nowadays you can get bags filled with silicon gel that do the same job, these bags save about 30% of the water per flush. However, if you have a newer toilet with a dual flush function be sure to use it. Though a little gross the 'if its yellow let it mellow' rule works quite well at night time and again reduces the amount of flushes.