Help with savings - Goal to buy first property

Bringvaluetome

Wise to keep balance of £1 on credit card to keep it open and available? Then got £5k at disposal if ever needed.

eskbanker

Bringvaluetome said:

What about cashing out the HTB ISA and clearing the credit card? If I'm going to get a LISA then no harm?

Personally I'd leave your HTB ISA money where it is for now, and decide whether to use it to pay down the card or to pay into LISA (or even leave in HTB for relatively decent interest) in March.

Bringvaluetome said:

Wise to keep balance of £1 on credit card to keep it open and available? Then got £5k at disposal if ever needed.

No need to keep a token balance on a card, even if you pay it down to zero it'll still be there, but as above you may be in danger of throwing the baby out with the bathwater - a 0% balance is handy while it lasts so there's no rush to bin it.  It may even make sense to transfer it to another 0% deal next April if you can get one, as long as you focus on getting your credit files in shape well ahead of looking at mortgages - my message in earlier posts wasn't really 'get rid of debt at the earliest opportunity', it was more 'recognise that debt needs to be repaid but make use of it wisely while it lasts'....

Bringvaluetome

My HTB ISA interest rate is 0.75% and currently has a balance £2012.

DiggerUK

You haven't revealed what your annual income is. At this moment in time you have a net value of less than £1,000 and a desire to buy a house within four years. That will require up to £20,000 (£5k pa) to get a key to a door..._

Bringvaluetome

Annual income of £26.5k. At time of posting outgoings per month are £750.

Sailtheworld

Bringvaluetome said:

My HTB ISA interest rate is 0.75% and currently has a balance £2012.

You're looking through the wrong end of the telescope. You need to think about how to save a deposit sized lump of cash, get rid of your debt whilst still improving your retirement savings. Your deadline is 4 years.

If you're definitely on a home buying journey a LISA is going to help but the interest you'll get on this journey will contribute no more than £200 - it's hardly worth considering. The heavy lifting needs to be done by raising your saving rate (probably substantially) and getting it inside the LISA.

Bringvaluetome

Thank you for the replies. I think my mind set is getting debt to £0 as fast as possible. Then starting from the ground up. I'm in my early 30's so still time on my side.
Any recommendations on how to raise savings rate considerably? 

Sailtheworld

Bringvaluetome said:

Any recommendations on how to raise savings rate considerably? 

Take a good look at your spending and see what you can do without and what you could buy cheaper. When you get a pay rise increase your savings rate rather than inflate your lifestyle. Same for bonuses - save them. 

That's only one side of the coin - can you earn more? Extra hours / better job etc.?

It gets easier with time as you train yourself to live on a smaller % of your income.

wjr4

Do not cash in your HTB ISA as you can transfer this to the LISA and keep the bonus. Reduce your everyday spending to clear the debt. 

Bringvaluetome

Would anyone recommend the Hargreaves Lansdown LISA?