Yesterday I wrote a post about our dream to own a home, the challenges we face and how we will be charting the journey as we go, that post can be found Here.
Today I will be following on from that and talking about the basis behind our plan of how to accomplish this, saving a quarter of a million is a double decade timeline project, but setting smaller targets will make things more manageable.
100k will get us a very good deposit, so that's our first goal - again what seems an impossible amount to save. So I will be breaking it down into ten more manageable segments.
So 10 x 10000 pounds. That's our goal!
saving £100000 sounds impossible, saving £1000 - 100 times? yeah that seems more possible!
How will we save our money??
Well interest rates are pitiful on savings, the best I can find is 0.4% ... This is not tempting. However I am not prepared to speculate on crypto, the stock market or gold as we have a limited time frame, I want to try and get enough for a deposit within a 4/5 year period and I don't think that's long enough to ride things out on speculative investments.
So - we are choosing premium bonds.
For those that do not know premium bonds are like lottery tickets, you can win prizes - they cost £1 each and by holding them you get entered into a monthly draw - the minimum prize is £25 and the maximum is 1 million. All winnings are tax free.
They are not perfect, and over too long they will erode the buying power of your money due to inflation - but for our current situation I think they are the best thing to do.
There is government initiatives to help people like me, one is called the lifetime ISA - both me and my girlfriend can put upto 4000 per year each into an account and the government will top it up by a further 1000 each, so a joint 8k will become 10k! great! the only thing is is can only be used on the purchase of your first home or retirement.
We will be making full use of this initiative, but will only put it in at the end of the tax year as the interest appart from the bonus is a mere 0.10%.
So everything into premium bonds, and once a year we put 4000 each into 2 x lifetime ISAs
First investment has been made!
