Are you too kind with money?
Speaking to a client the other day she told me she couldn’t afford to treat to herself to a spa day, costing around £150, due to having children. They had kids clubs and days out planned, which meant the majority of any ‘spare’ money went on them! We all like to treat our kids, but are we putting making treats the ‘norm’? Should there be a limit?
Another lady told me she had 3 older children still living with her but they were costing her a fortune in food and that she couldn’t change her mortgage from interest only to repayment because they were still at home. This would mean in 8 years’ time the mortgage company would expect the debt in full to be repaid; surely her children didn’t want that for her? If she asked them, I am sure they would have said no!
Would we be helping or hindering our children by providing more than needed? By giving and giving? Would it make them feel that someone else will bail them out in the future and they didn’t have to work for anything?
It left me thinking that maybe, women are putting their own children’s wants before their own basic financial requirements? Were they not investing or not making a pension or putting setting up an insurance policy because lifestyle costs and demands of children have grown so much? They are putting their children’s special treats before allowing themselves some sort of pleasure? As an experienced and qualified financial planning advisor specialising in helping women to take control of their finances and their future, I am passionate about changing the mindset around money and spending.
We all know that if you are on an airplane and there was an emergency that you are to put on your own mask before you help another, thus meaning you can help others around you. Many of us don’t seem to do this in life. We say to too much, making our lives busy and stressful. We say yes to spending money when we know we shouldn’t. We allow things to slide because it is easier…
Over the 20 years I’ve worked in financial services, I’ve met every kind of client there is and seen most situations there are. Early milestones like buying their first homes to later life planning. Through these conversations, I’ve discovered four types of clients.
Money Spending Habits #1 - The Splurger
Life is too short to deny yourself pleasures small and large. You're often careless with your money in the pursuit of happiness, and you know full well you'll have to pay for it eventually. Just remember, if you're not careful, you could end up drowning in debt, missing out on the fun, and regretting some of those reckless purchases.
Money Spending Habits #2 - The What Now?
You don't pay much attention to your finances as long as your cards aren't declining. Ignorance may be bliss, but chances are you're not saving enough -- and that may not bother you now, but when you don't have enough savings for a house or to retire comfortably, you're going to wish you watched your spending a bit more carefully.
Money Spending Habit #3 - The Hustler
You wouldn't call yourself frugal, per se. You're not afraid to take risks and some debt in order to get what you want-- but you'll figure out a way to pay it off before it drags you too far down. As long as you can stay ahead of the game and keep your side hustle strong, you'll be ok -- but consider saving more in case you get slowed down unexpectedly.
Money Spending Habit #4 - The Banker
The Banker: You've got your mind on your money (and your money on your mind). Your frugal mindset and financial instincts are sharp: You know where every pound goes and why, and you're making steady progress toward your long-term goals, even if it means some frugal sacrifices here and there. Keep it up!
Would you like to know which profile you are? I’ve created a mini quiz asking a few key questions to see what kind of spender you are, why not give it a go…
“Once you know where you are – you know what to change and where to head!”
This is my own mini mantra with clients and when are reviewing their position. Once we know where you we know what needs to happen, what changes need to be made and what improvements can be done over time, we know which direction to head in!
Knowing where you are with your spending will allow you to know where you are with your money and if you need to make any adjustments. It will certainly give you food for thought...
Where are you heading?
I love a plan! I would... I am a financial planner! I like to know what I am aiming for and where I am going. What am I doing this for? It allows me to make smarter and more informed decisions with my money and stay on track. Many of our clients come to us not knowing where their money goes each month, getting to the end of the money and really unsure where it has all gone. Often they don’t have a clear goal with what they want to do with their money, how they should start investing or they can’t start as they know they are spending too much and don’t know how much they could even consider investing or saving.
If you do one thing… love your money… I promise once you do, it will love you back!