Money Medics co-founder and finance expert Eve reminds us why we should be nurturing our finances and personal wealth before nurturing our relationships. She offers tips on paying off debt, budgeting, saving and investing. Have a read and let us know your thoughts!
Growing up, my mum always stressed the importance of financial independence. During one of our classic mother and daughter chats, I remember her telling me that my aunt had separated from her husband and the predicament my aunt was facing. Her husband had confiscated the car she used to take the kids to school! Unfortunately, this can be the same narrative for some women. According to the investment platform Nutmeg, 20% of women admit feeling trapped in unhappy relationships due to financial circumstances, in comparison to only 3% of men.
This early childhood memory shaped my approach to money and relationships. Relationship advice articles always teach the importance of loving yourself before you can love another human being. I believe we need to have the same attitude towards our money by creating some sort of foundation before entering into a relationship. I am not in any way saying you need to have a million in the bank but getting the basics right such as having an emergency fund, a healthy credit score, a long-term retirement plan, is essential. I don’t want to come across as pessimistic or as if I see relationships as purely transactional, but there is significant benefit to the relationship when both parties join assets in combination to the joining of love, families and companionship.
That being said, it is never too late to start building your foundations and there are several reasons for this:
Women are more likely to live longer
- Based on the 2018 National life tables women on average have a longer life expectancy than men as the life expectancy at birth in the UK for men was 79.2 and 82.9 for women from 2015 to 2017
Women are more likely to spend less time at work
- The House of Commons briefing paper on Women and the economy stated women are more likely than men to be working part time. 41% of women in employment were working part time in 2018. Furthermore, 1.8 million women aged 16-64 were economically inactive because they were looking after a family or home in comparison to 0.1 million men.
Women are more likely to make less money than men
- The same briefing paper on Women and the economy stated the median weekly earning for female employees working full-time was £509 in April 2018 compared to £609 for male full-time employees. Noting that female employees are more likely than men to be working in jobs paying the National Minimum Wage
Now, enough of the dreary bit. I firmly believe in taking a solutions-based approach to life so I’ve outlined some practical steps that have helped me in my personal financial journey.
Ready, Set, Goals!
When you start a new fitness programme you always have a goal weight and size in mind. Before you restructure your finances it’s important to set goals too. Working towards this encourages you to stay on track and provides a reference point you can use to compare your progress. These goals are unique to you and can range anywhere from saving an emergency fund to buying a property.
Be Your Own Repo Guy – Get Rid of Personal Debt
This should be your number one priority but remember not all debt is bad i.e business loans vs credit card loans. Paying off consumer debt (debt from goods that do not appreciate) is the main focus.
- Tackle the debt incurring the highest interest first.
- If you’re struggling to pay it off, call your lender and inform them of your current situation. You can negotiate to either freeze or to lower the rate of interest and arrange a debt repayment plan.
Be a Master Budgeter
Be omniscient when it comes to ALL your incomings and outgoings.
- Download budgeting apps like Money Dashboard and use neobanks like Monzo, Revolut or Starling to give you a real time view of where your spending your money. (If you’re a traditionalist you can actually export your data onto an excel spread sheet)
- Once you know where you’re spending your money, you can focus on how to better utilise it. This includes cutting down on unnecessary expenditure as well as finding innovative ways to do the things you enjoy at a fraction of the cost.
Have a look at my video where I discuss top tips of how to cut down on costs, including 50% discounts in Mayfair restaurants, cutting down direct debits and meal prepping your favourite foods.
Save, but don’t forget to have fun
Once you’ve got a savings goal for yourself, create a timeline and work backwards from there. For example if you need £1000 to travel in 10 months, you need to be saving at least £100 a month.
- Investing platform Wealthsimple recommend having at least 3 months of outgoings costs in a savings accounts in case of emergencies- I personally suggest at least 6 months. Look into high interest accounts such as the nationwide 5% current account or the HSBC 5% savings account.
- However, healthy eating without the occasional chocolate brownie is hard to maintain! Set aside money each month to spend on yourself- I call this my ‘enjoyment fund’.
Make Investing a Habit
Take time to understand how your money can work harder for you. I discovered a great beginners guide to investing www.stepstoinvesting.com when I started my investment journey.
- Consider robo-advisors like Nutmeg and Wealthsimple that provide automated investment management services.
- Consolidating your pensions if you’ve had multiple jobs over the years. Find your old pensions through https://www.gov.uk/find-pension-contact-details and look into setting up a SIPP which can be tax efficient way of investing for retirement.
Like I mentioned earlier, it’s never too late to start, no matter what stage of life you’re in. The important part is ensuring you’ll thrive come rain or shine.
You can follow Eve on Instagram @MoneyMedics and on their You Tube Channel – https://www.youtube.com/channel/UC14_1iyLVCX3PH99YJAe8qQ
About the Author
Eve Obasuyi is the co-founder of Money Medics, a platform that provides healthy money management to millennials. Through self-taught good financial practice she purchased her first property by 24, is now a landlady and a prolific budgeter and investor. Her mission is to empower others to financially flourish from starting school through to starting a family.
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