Just over a year ago I wrote an article called A Long Hard Look at My Financial Future.
You can read it here. It reflected on what I had been thinking about when it comes to my personal finances, three months after starting work at Bigmore Associates.
Now, a year on from that piece, I thought it might be a nice idea to give an update on where I have progressed and where I have not. Because all the education and resources in the world mean nothing if you don’t take action. Personal reflection and accountability only help ensure you make the moves you need to so you can better your situation.
So let’s take a look at last year’s prompts and see where I am today…
1. Put aside any embarrassment I have about my lack of knowledge
It’s quite helpful doing my job without an overwhelming amount of knowledge of financial planning. It means that I have the same questions as other people. I am coming at this role using my ignorance as an asset. Since a huge part of what the content we produce aims to do is provide a financial education, what better way to decide on topics than to utilise my own curiosity and need for education on the subject.
I think this has helped me feel less embarrassed about what I didn’t (and still don’t) know. The other thing that has been exceptionally helpful when it comes to letting go of that shame is the people I work with.
The team at Bigmore Associates understand that there is a general lack of financial knowledge in the population. They also understand the psychological factors involved in a person being inactive. As a result, they never once made me feel stupid for not knowing something or not doing something. They will answer any question I have without judgement. And they will offer encouragement to not only learn more but to take the steps I need for a secure financial future.
They also understand the reality that not everyone is in a financial position to do all the things they should immediately, and they never make me feel devalued because I don’t have millions to invest.
If they did, I wouldn’t be working here anymore.
Enhancement for 2024: Take More Action
There are things I have not covered in this or my previous article that I need to work on. That I need to put into place. There is also more knowledge that I need. My financial needs and wants will change throughout my life. So learning is a life long mission. I must focus on what needs to happen now and keep an eye on what my needs will be in the future, taking whatever steps I can, when I can.
2. Actually review my expenses
Last year I noted that I have a cursory understanding of what I spend my money on but that a deep dive was necessary. So a deep dive I did!
What I discovered was an over impulse in purchasing things for the kids. Not really toys but other things. Clothing, snacks, magazines, football cards, trips to the arcade and such. Some of it were needs, many of them were not.
Realising this made me take a moment to assess if there was a better way to manage what I spend, and if I could involve my kids in what money is spent on their extras. So we now have a system in place for pocket money and chore money. You can read more about what this is here.
There were certain other things that popped up, but this was the most obvious place where I was being frivolous and could enact a substantial change.
Enhancement for 2024: Do this More Regularly
Last year I looked at my spending maybe a few times throughout the 12 months. A monthly review of my expenditure will really hammer home what I spend that is unnecessary, and possibly show me places I could save some coins if I buy smarter. Like in bulk, second hand or by keeping an eye on sale prices.
It will also give me a monthly mental focus refresh. Sometimes when we don’t pay close attention to something often enough, we forget that it requires our time and energy. This could lead to backwards steps when we should be moving forward and solidifying our new habits.
Behavioural change is hard, yet it is possible. I just need to put in the effort to both check on and remind myself of what I’m trying to change.
3. Save money
I shot for the stars on this one. Maybe to my detriment.
Once the childcare bill for my youngest ended, I started putting away the maximum amount of money I thought I could save every month. This left me with near zero disposable income and meant that I was dipping into that savings account if I needed new socks or fancied a cup of coffee with friends. It was a silly move as it made me feel like a failure on my mission to start saving. And once I took some money out, I found myself thinking “well you’ve already screwed up this month’s savings, might as well take more out!”
Such a weird mindset.
Eventually, I made the money I put into my savings more realistic. I also actually allowed myself to factor in money for myself. Money beyond the bills and groceries and petrol and kid’s fund. As a result, I am not dipping into the account and no longer feel like I’m failing to save.
Plus, as per last year’s article, the aim of the exercise was any amount of money saved to develop the habit of saving. I’m happy to say I am now developing it!
Enhancement for 2024: Have Something I'm Saving Towards
Having an emergency pot of money which is easily accessible is important. But I think I can kick this up a notch if I have something specific to save for. Something that will get me really focused and excited to succeed. Like a family holiday.
And just as with overshooting a bit with the amount of money I was to save every month for the emergency fund, I want to temper the holiday I believe I can afford to save for. It will be unrealistic to aim for a £5k all-inclusive holiday in July as that would require me to put aside over £800 per month of the next 6 pay checks. Numerically, that is impossible given current circumstances. I would not be able to pay bills if I did this.
So even if I’m just aiming for a long weekend somewhere in the UK, it’s something exciting to work towards and look forward to. And I can already sense how proud I will feel of myself for accomplishing this.
4. Understand the differences, benefits and drawbacks between a pension, an ISA and a Savings Account.
This is another one I have done well with. I understand the basics of what each product does, why and when I would benefit from using each one and how to maximise them for my retirement. I have not, however, increased my pension contribution as I wanted to. This just wasn’t doable thanks to interest rates and cost of living increases. I simply could not afford to do it all.
Putting the money into a savings account is a better option for now because I need to have a pot of money I can access in case of an emergency. So I’ve prioritised building that over my pension and ISA.
Though I do have a pension I contribute something towards, I should also note that I don’t have an ISA. Yet. It is something I want to be able to invest in at some point, but I am not there yet.
Enhancement for 2024: Start an ISA
This might be the most challenging of all of my 2024 enhancements but I suppose I can’t stop myself fully from shooting for the moon! But if I get my savings account where I want it to be, and manage my spending and budget well, by the second half of this year I might be able to make this happen. I’ll let you know in 2025.
5. Get a Will
Yes, this is a major fail. I literally sit across the aisle from our Will Writer and I haven’t done this. So if you’ve been putting off having a will written, you’re not alone. And really, I have ZERO excuse.
So then I need to ask myself, why haven’t I done it? Honest answers…
- My husband has one so I feel like that covers me too (it doesn’t)
- I don’t have enough assets where I feel it matters (it does)
- Even with an employee discount, I don’t want to spend the money
To be clear NONE of these are good reasons. I need a Will. Especially since I have children. I should probably stop by Luke’s desk…
Enhancement for 2024: Get a Will
No explanation needed.
If you need one too, here is Luke’s meeting link.
6. Know how I view money
Now, I’ve always felt I had a good understanding of my relationship with money. I even wrote an article about this last year if you want to give it a read. But I did have some serious questions and thinking to do about my relationship with money as a mother.
As per above, I have no issues factoring into my budget money that will be spent on the kids. Both for necessary and unnecessary items. I did not do the same for myself. This resulted in me dipping into my savings when I needed things. Which meant I not only felt guilty about taking money from my savings but I also felt guilty because the money I was taking was for me.
Why? Why do I feel badly spending money on me?
I didn’t use to. But now that I have a family, I feel like it all needs to be for them. Some, if not most, of it does need to serve the family. But why can’t any of it just be for me? I work and make money. I contribute to the household upkeep, to the child rearing. So what is the block when it comes to me, as a mother, spending money on myself?
Doing the work to answer these questions has been difficult and impactful. It has led me to a happier, healthier relationship with my personal financial needs and means I am putting myself higher on the list. A struggle which I’m sure many parents can relate to.
Enhancement for 2024: Don't Be Afraid of Bigger Purchases
This is still a hang up. I’ve come to terms with the occasional coffee with a friend a new pair of socks. But I’m still unwilling to spend a larger sum of money on myself. (see they reasons I don’t have a Will.)
Even though, arguably, the Will is about my family, it has my name on it. It’s MY will and for some reason I’m not willing to spend the money I need to spend on it because of that weird little nuance in my brain.
There are other proper self care things I should be doing that come with a hefty price tag and, honestly, I’m not sure it’s just about the cost. I’ve probably got some work to do when it comes to knowing I’m worth the money. But that could be a whole other article…
A Year in Review
To sum it up, I have made some progress. I set out last year to start doing the work and I’ve started. I’d be lying if I said I hit the ground running because I didn’t. It took me time. Time to get over my embarrassment. Time to commit to the effort. Time to be willing to put money towards my future rather than my present. And then time to make the adjustments I needed to make.
But the overwhelming thing I have come to learn this year is that none of these blocks, none of these issues, are unique to me. I am not the only one who struggles with financial management, life admin and saving for my future. It is my hope that by sharing what this process is like for me, it will let others know they are not alone. That there are resources available to you to gain the education and reassurance you need. And there are people who can help guide you if you still are not sure of what to do.
If not for my role, and the people, at Bigmore Associates I wouldn’t have started down this path when I did. Who knows if I ever would have felt brave and educated enough to do it. And I’m so glad I have.
Article by Jill Rensing
