Things I learnt when my brother-in-law moved to Denmark

Two weeks ago we said farewell to my brother in law who has finally made the move to be with his long-term girlfriend in Denmark.  They have been long distance for almost the entirety of their relationship so it’s great to finally see them living together.  Now that he has somewhat settled into his new home, I had a chance to reflect on what his life changing move has had on us.

Keep your eye on the prize

Not that his girlfriend is a prize to be coveted, but once they had gotten through the initial ‘honeymoon period’ of their relationship, they both started to think about their future together and where it would be.  Both the UK and Denmark were considered but ultimately, my BIL’s job was more transferable and his girlfriend had just started her university degree (which might I add is fully funded by the state… not envious at all…) so Denmark seemed like the logical place for them to begin their lives together.  Once this was established, they set a date for him to move and steadfastly worked towards their goal.

The importance of regular saving and an emergency fund

As you can imagine, it can be a bit expensive moving to another country.  I know firsthand after moving to London from Auckland, New Zealand but my brother-in-law had never saved substantial amounts of money before but soon realised that he would need to in order to make his dream a reality.

He moved back home in order to save money paying rent, gave up expensive habits such as smoking and cut down on going out with mates to the pub.  Once he started saving a bit more, this motivated him to increase his monthly savings so he had a good cushion once he arrived in Denmark.

Time spent in planning and preparation is rarely wasted

To be fair, his girlfriend takes most of the credit for this next point.  My BIL is laidback almost to a fault so she found affordable accommodation near her university for them to live, researched the documents you need to live and work in Denmark (think the equivalent of a National Insurance Number in the UK) and started finding potential jobs he could apply to.  My BIL started learning Danish and has enrolled in a Danish school. He updated his CV and had an interview booked the same day he arrived, which he got. As a stroke of luck, one of his new coworkers is from the same town in the UK!

Read the T’s & C’s before you sign!

Unfortunately there was one pot hole in the road in the lead up to the move.  After deciding he would sell his car before moving to add some more money to his savings, he was a bit shocked to discover that he had purchased with PCP (Personal Contract Purchase) finance. With this kind of finance, rather than paying off the entire value of the car, you instead pay how much the finance company predicts the car will lose in value over the term of the deal (usually 24 or 36 months) minus the deposit you’ve put down. This means that the monthly payments are usually lower.  At the end of the deal, you can either give the car back or trade it in for a new one (less penalties for going over stated mileage or damage) or pay a balloon payment to own the car outright.

My brother-in-law had been hoping to add to his savings pot but instead found himself having to pay to give the car back.  Thankfully he had an emergency fund to cover himself but it does highlight the importance of carefully reading contracts so you know exactly what you are signing for.

Support networks are crucial

As I mentioned before, his girlfriend has worked very hard to ensure his adjustment to Danish life has been as smooth as possible.  Both her family in Denmark and his friends family in the UK have tried to do everything they can to support the couple as they enter this next chapter of their relationship. They have offered practical advice, reassurance when fear creeps in and moral support over Skype.  Although many people have moved long distances alone, knowing that there are people out there willing you to succeed can certainly help you when having a down day.

 

Have you or one of your family members moved a long distance away? Did you find yourself reflecting on the experience? What did you learn?

How we’re saving our house deposit

Hello!

So last week, I dipped my toe into the blogging world and wrote my first post explaining how I wanted to document our journey into home ownership.  For this post I’m going to go into how we’re saving and the reasoning behind it.

The seed is planted (2013-2015)

So I’m not originally from the UK.  I moved to London from New Zealand at the age of 24 intending only to stay for a short amount of time to travel and see more of the world…

Nearly six years later, I’m still here. Married with a child.

The reason I start with that is because while I was travelling and deciding what I wanted to do with my life, I wasn’t terribly good at saving.  Or, I did save, but it was all going towards short-term goals, like affording the next holiday.  I did discover a few Personal Finance (PF) blogs I enjoyed reading such as Mr Money Mustache, Money After Graduation and Making Sense of Cents.

The seed begins to grow (2015-2017)

It wasn’t until early 2015 when we were saving for our wedding later that year that I started saving in earnest.  I also started investing in index funds.  This was after reading a tonne of articles and books about the topic until I felt confident to part with my money (and even then not too sure!).  I found the Monevator blog incredibly helpful, especially since it was UK specific.  I also subscribed to Rockstar Finance to gain the perspective of many other people in similar or better situations.

Our accounts

Stocks and Shares ISA

I first put £150 into a Stocks & Shares ISA (Individual Savings Account) in April 2015 and have been investing monthly ever since.  The monthly amounts have ranged from £50 when times have been tough to £300 when we’ve had enough to do so. We’ve never had a lump sum to put away, the most important thing has been depositing the money and letting it grow. Buy and hold.  It seems to be working so far.

Help to Buy ISA

I first read about these on the Money Saving Expert website.  Basically you can deposit up to £1200 in the first month you open the account and then a maximum of £200 in subsequent months.  The UK government then tops up your contributions by 25% when you buy your first property (as long as you have a minimum of £1600 saved up).  This seems like a great deal however there are terms and conditions to look out for.  Particularly the value of the property you’re buying and whether it is in or out of London.  You also won’t get the bonus to help with the deposit which has thrown a few people.  Still, since opening this account in December 2015 and contributing to it every month, I’m surprised at how quickly our contributions added up.

For more information about H2B ISAs, check out the Moneysaving Expert website

Lifetime ISA

This is a relatively new product launched in the last year.  Anyone aged 18-39 can open a LISA account and contribute up to £4000 in the tax year.  The government will then top this amount up by 25%.  Although it sounds very similar to the H2B ISA above, there are a few key differences.  The money saved in a LISA can only be used to buy your first property or for your retirement otherwise you will be hit by a 25% penalty when you withdraw funds.  You can invest in stocks or cash with the LISA but there aren’t many providers out there and only one who has the cash ISA with a not so great interest rate.  A strategy that many people are employing (ourselves included) is transferring their H2B ISA into a Lifetime ISA as for the first year only, the government will pay the 25% bonus on all of it.

For more information about Lifetime ISAs, check out the Moneysaving Expert website

Our strategy

Currently we have a Stocks & Shares ISA, a cash Lifetime ISA (with our transferred H2B ISA amount) which we just received the very first bonus payment for, and a regular savings account that pays slightly higher interest rate.  We’re hoping to put more money towards our deposit fund in the coming months as I am back at work and that October deadline is rapidly approaching!

I think no matter how you’re saving for a deposit/downpayment for a home, the most important thing is to be consistent with your savings and put something away regularly (we found monthly was best for us as that’s how we’re paid).

How did you end up saving for a deposit or another large purchase?

Yet another personal finance journey

Updated: 28th April 2018

In the words of WordPress, thanks for joining me!

I am a big personal finance blog fan.  Reading the articles selected for me by Rockstar Finance is a daily ritual.  My husband has often said I should start my own blog but I’ve never had the urge to.  To be honest, I never really thought my personal finance journey was one of note.  I still don’t, but some of my favourite blogs are those of people who are documenting their progress to achieve a goal, be that freedom from debt, financial independence, moving to their own homestead, you get the idea.

Which is why I’ve started writing.  We want to buy a house.  In 2018.  We have been slowly saving since before we got married in 2015 but now the lease on our rental property is up in October, we have the impetus to turn the dream into a reality. Although sometimes it’s easy to get stuck in a rut, I feel that documenting our progress will help us stick to our goals.

We currently live in London, which has insane property prices.  There are flats for sale on our street that are simply out of our price range, even if we cut out the avocado toast and fancy coffees. So part of our journey will be deciding where we want to move to.

Mortgages, and more specifically how to get one is also something else we need to learn about.

We have a baby boy too.  I took seven months maternity leave and using Shared Parental Leave, my husband then took four months off from work to care for him.  I’m not really sure what we would have done had we not been able to take SPL.  He now goes to a local childminder, who although excellent, is quite expensive. A bit like London property prices.

So that’s where we’re are at the moment.  I will continue to delve into further detail in future posts but I already feel accomplished having written this.  If you have any questions about our journey, please let me know, we do love the feedback.

Talk to you next time!

 

Good company in a journey makes the way seem shorter. — Izaak Walton

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