MTTM Podcast Episode 460 – Home swapping, zero spend months & interest rate forecasts

Listen to Episode 460

In this week's podcast episode I discuss the benefits of implementing a 'zero spend month' or 'limited spend month'. We also provide tips on how to increase your chances of success. We then explore the advantages and disadvantages of home swapping holidays. Finally, we analyse where the market thinks the Bank of England base rate will be over the next 5 years before looking at the current trends in mortgage rates.

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Summary of Podcast Episode 460

In episode 460 of the Money to the Masses Podcast, we cover three key topics related to managing finances and saving money. Here is a summary of the topics covered:

1. Home Swapping or Home Exchange

Home swapping is a cost-effective way to holiday.

• Home swapping involves two parties agreeing to holiday in each other's homes for a set period at no cost. This practice is becoming popular due to rising costs of traditional package holidays.
• Key benefits include significant savings on accommodation, the ability to have someone tend to minor tasks and pets at home and the opportunity to swap other assets like cars and bikes.
• Safety and insurance considerations are important, such as having proper home and liability insurance and preparing the home for guests.
• Several websites facilitate home exchanges, such as Guardian Home Exchange, HomeLink, Love Home Swap, and HomeExchange.com.
• Costs include membership fees for exchange websites, insurance, and possibly getting the home ready for guests.

2. Mortgage Rates and Interest Rates

We discuss the current state of the mortgage market and the predicted path for the Bank of England base rate.

• The Bank of England base rate is currently 5.25% and is predicted to fall slowly over the coming years, before stabilising around 3.4% by 2029.
• The episode reviews the best available mortgage deals, noting that two-year fixed mortgage rates have decreased slightly since November.

3. Zero Spend Month

The concept of a zero spend month (or no-spend month), where you avoid all discretionary spending for an entire month, is introduced.

• This strategy can help save money for specific goals and promote mindful spending habits.
• Practical advice includes getting everyone in the household on board, planning meals, choosing an appropriate month, and setting small, achievable goals.
• Emphasis is placed on rewarding yourself at the end of the month to avoid feelings of deprivation and promoting long-term financial habits.
• We also touch upon previous related topics like zero spend days and loud budgeting.

Podcast Quiz Questions

Here are five multiple-choice questions to test yourself after listening to this week's episode.

Multiple Choice Questions

1. Home swapping is when you...
   1. Rent a home for a holiday
   2. Exchange homes with someone else for a holiday
   3. Sell your home to buy another
   4. Rent out a room in your home
2. What type of insurance is a good idea to get in place before you home swap?
   1. Rental insurance
   2. Travel insurance
   3. Liability insurance
   4. Property insurance
3. What is the current Bank of England base rate?
   1. 3.5%
   2. 4.0%
   3. 5.25%
   4. 6.0%
4. What is the expected Bank of England base rate in January 2025 according to current predictions?
   1. 3.0%
   2. 4.0%
   3. 4.6%
   4. 5.0%
5. Why might someone embark on a zero-spend (or no-spend) month?
   1. To increase their credit score
   2. To save money for a specific goal
   3. To reduce taxes
   4. To increase their income

Answers

1. B
2. C
3. C
4. C
5. B

Resources:

• MTTM Deals Page
• MTTM Podcast Episode 455 - Loud Budgeting
• How to budget for beginners
• MTTM Ep 393 - How to build good money habits