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A Long Hard Look at My Financial Future

December 20, 2022

A Marketing Manager in a Financial World

Working in a financial services firm is an eye-opening experience. I am not 100% financially ignorant but I am by no means educated in a way that best serves my future. I have a pension (or three) I own a home and there is a high likelihood that I will inherit a sum of money that will enable my retirement with minimal stress. However, nothing is guaranteed, and life is unpredictable. Between the rising cost of living, the volatility of the stock market and the potential for inheritance tax my current ignorance could be the downfall of my future self. 

So, in the interest of taking care of Future Jill and her children, it’s time to step up my game, educate myself and put a proper plan in place to best secure a financial future that can support life in 40+ years. Here is how I’m going to do that.

1. Put aside any embarrassment I have about my lack of knowledge.

Financial ignorance is not unique to me. Not having a proper plan in place for the future is not unique to me. Being resistant to putting a portion of my currently salary away for retirement is not unique to me. I need to move past my embarrassment and accept that I was not educated properly in financial matters and take the note that the sooner you start saving the better it can be for your future. And I can educate myself along the way!

2. Actually review my expenses

I have a very clear cursory understanding of what I spend money on. It’s mostly food and other household, family necessities but there is definitely room to cut back on impulse purchases (read: Amazon). The personal financial landscape has changed since my parents’ generation. Inflation has increased faster than salaries and the phrase “disposable income” is a misnomer. None of it is disposable, it’s just that some of it will be more useful if applied better. That is what the review of my finances should uncover.

3. Save money

Full disclosure, and to overcome point 1, I do not put any money into savings. If I do, it usually comes back out rather quickly to pay for an after-school club or holiday childcare.

I’ve been lazy with this because my husband makes more money than I do so in is a better position to put some aside. However, this is not an excuse for me to not do it. Especially after I no longer have a childcare bill. Because, let’s face it, childcare is expensive!

It might feel a stretch to put a bit of money a month into my savings, but no amount of money is too small. Starting now and forming that habit, if only with £20 a month, is still a step in the right direction. And if I follow through on step 2 and take an honest look at my expenditure over several months, there is likely to be a few obvious places where some of that money can come from. And with a bit of a deep dive into the nuance of my outgoings, there might be more I can uncover. (ie – That daily coffee that keeps creeping up in price.)

4. Understand the differences, benefits and drawbacks between a pension, an ISA and a savings account

This is a big one. There is so much to know and understand between these three products; tax implications, ease of access, potential rate of growth. Learning the nuance of each will certainly make me feel empowered, but it’s also important not to get too caught up in complete understanding. Knowing the basic differences can be enough to help me confidently start putting money into each, with a clear understanding of what I’m hoping to achieve by doing so. For me, it begins with putting money into my savings account until I reach a few months of expenses in the bank. After that, I plan to move that monthly sum into an investment ISA.

And then comes the pension. I have three pensions from three separate jobs. Two of which I have no idea about. Not sure how much is in them, how much they earn a year or what they are invested in. These three pieces of information will help inform a decision around whether I should combine them into one fund or not.

At my current job, my employer increases their contribution if I increase mine. So I’ve made the decision to max out my contribution once my youngest is in school and I no longer have a childcare bill to pay. For now, I just do the minimum. (This counts as planning for the future so I’m already making progress!)

5. Get a will

I’m a grown up and in some ways, I need to start acting like one. (Hence the thought around my future finances) This is another one of those instances where I have relied on the paperwork my husband has in place to cover my back, but this is not the best way to go about things. Even though my estate will be simple to allocate, I do have young children and for their benefit I must have this piece of paper in place. There is no reason to not make things as clear and easy as possible in the event of my passing.

6. Know how I view money

It would be wrong to say that there is no psychological or emotional attachment to money. It brings up feelings for everyone, whether you are aware of them or not. It’s a necessary evil in our world and it won’t be going away anytime soon. There are some tough questions you should ask yourself about money, including how important having it is to you. And be honest with yourself about the answer.

I need to face the reality of my relationship with money. What I know about it, what I think about it, what I feel about it, and not let my embarrassment cause inaction. It is that type of inaction that could lead me to a place of struggle in the future. A place that I could potentially avoid if I make a few changes now and develop smart money saving habits for the future.

Taking action

Overall, my aim is to not be overconfident in the expectations I have of my financial future. Yes, things will change for me financially when the childcare bill disappears, but a few months after that both our mortgage and energy fixed tariff are up for renewal. Based on current interest rates our monthly outgoings will increase beyond what I’ll be saving in childcare so really, my plan could go out the window.

But that’s the point. Nothing is guaranteed. Life always shifts, always moves. Sometimes up, sometimes down. As is the case with any new journey, you must start moving in order to take it. To go 12 feet, you first have to go 6.

As I take my first six steps, I encourage you to start taking yours. And if you don’t know which direction to go, I can’t recommend the team at Bigmore Associates enough. Not just because I work here, but because they have never once made me feel ignorant when I ask whatever question pops into my head. And trust me, I ask some random ones!

Remember, I’m not a financial expert, I do marketing. Sitting in this room with these experts, I wish everyone could hear what they have to say, what they want to teach. Fortunately, they have hired me to do just that.

"The best way to predict the future is to invent it."

Theodore Hook