5 ways to get out of a rut

I’ve been meaning to write a blog post for some weeks now but the ideas weren’t flowing nor did there ever seem to be the time to actually sit down and draft something out.  I’m off for a week over Easter and I finally had some time to consider what was wrong.  I would like to share a few tips that I’ve used over the past few days.

Consider external factors

You’ve probably heard of Maslow’s Hierarchy of Needs or seen it displayed as a pyramid with the most basic physiological need such as food, sleep and shelter are at the bottom, progressing through to self-actualisation, or the need people have to achieve their full potential.  You cannot begin working on the more psychological growth needs until the more basic needs are satisfied.

Over the past few days, our son has been having trouble sleeping at night, constantly waking almost every hour. This has led to an unhealthy lack of sleep for both of us.  The off shoot of this is as well as being chronically tired, we’re not taking time to eat well or exercise which perpetuates the cycle.  If you’re not feeling particularly inspired, have you stepped back to ensure all of your basic needs are being met?

Try the 5 Whys Technique to establish the root of the problem

The 5 Whys technique was created by Sakichi Toyoda, founder of Toyota Industries in the 1930’s and the company still use it today.  I first read about this in a blog post and have found this an excellent way to pinpoint the exact cause of my worries.

You begin by defining the problem and then ask ‘Why?’.  When you have answered this question, ask yourself why in response to your answer.  This process continues until your answers to why produce no more useful responses.  The five in the 5 Whys is subjective, you may be able to reach the root of the problem in only 2 or 3 whys or you may need to keep questioning further.

In my situation, I felt the cause of my lack of productivity was caused by uncertainty about our housing situation. I’ve previously written about where we want to eventually live but we are still currently saving our deposit so feel a bit in limbo at the moment.

Look at your long term goals and check the short term goals that you need to achieve them

It’s important to set goals however it can sometimes be overwhelming considering the steps required to take action. Unfortunately simply dreaming about what you want will not get you where you need to be.  Similarly, dwelling on potential problems can be as equally paralysing.

Instead, break the goal down into smaller, easier-to-tackle parts. Completing these smaller steps can generate positive momentum, a bit like the debt snowball you frequently read about on personal finance blogs. If you need help with setting goals, the SMART method (Specific, Measurable, Achievable, Relevant, Time-bound) is a useful tool for drafting them.

Our end goal is to own our own home.  To do that we need a mortgage so one of my smaller attainable goals has been reading everything I can about the process to maximise our chance of a successful application.

Take action

“A journey of a thousand miles begins with a single step”

– Lao Tzu, Chinese philosopher

Of course, writing your goals down is the easy part.  Enacting them is the challenge which is why it is important to have a time scale in mind. Regularly review your goals and check your progress, are you on track to achieve them in the time you’ve set?

Taking action can also mean admitting to yourself something is not going to plan and rethinking and potentially abandoning that goal. Some of the bloggers I have read that have been steadily working towards FIRE (Financial Independence, Retiring Early) have achieved the goal, successfully retired early and then have found that it’s not the right path for them. Have they failed? Certainly not! They had to reach that point in order to know it wasn’t right for them and now they are setting new goals for the future, with far more financial resources to help them.

One of our mini goals was filling one of our Lifetime ISAs for the current tax year. And it does give you a boost to know that you’re on the right track.  We now need to check our goals for our next achievement towards that ultimate goal.

Take a break

Sometimes, you just need to take a step back to recharge. Scientific studies have shown that the brain is able to perform better when given the opportunity to divert from a task. A chance to rest and the time away can give you a fresh perspective when you return to the task and help avoid getting into a rut in the first place.

I’m only a couple of days into a week off work and already spending time with my family and using my free time to pursue my hobbies and even just sit back and watch Netflix has enabled me to approach my projects with fresh eyes.  I was able to look at some of our house buying goals and not feel hopeless anymore. Incidentally, I do believe this is going to be my longest blog post to date so I’m going to accept that as evidence that taking a break works!

 

 

 

 

 

 

We filled a LISA, mini-goal achieved!

I didn’t really know what to post about, afraid that I didn’t have anything interesting to share, but then considering this blog is about our journey to home ownership, this seemed particularly relevant. Sometimes you just have to celebrate the small wins.

When saving up a seriously large amount of money, like a house deposit, you may need to set yourself a few smaller goals along the way.  We achieved one of these today by filling one of our Lifetime ISAs for the year.  For a reminder of what that is, check my previous post on the topic.

This means that in May some time, the government will top whatever is in the account by 25% which is pretty exciting.  There may be a spot of constant balance-checking over that time period!

What next? We’re going to try and fill my husband’s LISA as much as possible before the deadline of the 5th April.  And then we begin saving towards the 2018/19 allowance.

Are we disappointed that we haven’t filled both this year? No! There are loads of people who haven’t even opened a regular savings account. so in that respect we’re ahead of the game.

Have you reached a savings milestone this week?

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?