114. The Best Money Moves We've Ever Made

In this episode  Julie, Sara, Michelle, and Emily discuss their best financial decisions and how they've positively shaped their personal finance management. Michelle shares her successful strategy of organizing money into separate 'pots' for different purposes - from taxes to holidays, allowing her to have a clearer picture of her finances. Sarah discusses the importance of active communication and shared financial understanding in a relationship. Emily reflects on smartly splitting an inheritance into short-term, medium-term, and long-term investments. Lastly, Julie chats about her '10 percent rule' for incrementally boosting her pension fund, thus securing her retirement. The episode encourages listeners to reflect on their own financial habits and think about how best to plan for the future.


01:21 Michelle's Money Management Strategy
12:36 Sara's Best Money Move: Communication
24:41 Understanding the Bigger Picture in Financial Planning
28:14 The Art of Financial Planning: A Personal Experience
39:30 The Power of Incremental Increases in Pension Contributions

YOUR HOST

Julie Flynn is an experienced independent financial adviser and financial coach. Justice and equality drive Julie. Which is why she’s spent years studying and researching how stress affects our financial decision making.

Julie is best known for her work with women who have lost their partner and coaching financial services business who want to implement fair and transparent charges.
Ebb & Flow Financial Coaching | Bree Wealth & Tax | Instagram


CO-HOSTS
Emily Pool is a Financial Planner and Will Writer. She is passionate about empowering people to invest their wealth (pensions and savings) sustainably and in line with their personal values.

Michelle Lambell  started her career in financial services as a Stockbroker in 1999 undertaking both advisory and discretionary investment management. Today she is a Chartered Financial Planner, specialising in retirement planning advice, pensions and investments and a Certified Financial Coach. 

Sara Walker is a financial planner and financial coach with 33 years’ experience in financial services. She wants all women to feel financially confident and uses her professional and life experiences to support and educate women over 40 so they in turn feel able to support and be role models for the younger women in their lives.

Jennifer O'Neil is a mortgage and protection specialist and director of Athena Mortgages. Having been in the industry since 2014 Jennifer decided to set up a company in 2020 that suited her core values as a broker – integrity, service, honesty and continuous improvement.
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Transcript

Julie [00:00:28]:

Welcome back to the Women and Money Cafe. Now today, I've got the usual suspects on the sofa with me. I've got Sara. Hello. I've got Michelle.

Michelle [00:00:43]:

Hi, Julie.

Julie [00:00:44]:

And I've got a very bouncy and energized Emily. Hello. Alright. So as we're Quoting this. I get that we're a little we're getting where are we? We're in the middle of January now. But as we're recording this, this is actually our first episode of the year. So we're a little bit rusty, folks, so forgive us. But we've come up with a cracking idea for an episode for you.

Julie [00:01:07]:

Okay? So you know how we've got lots of knowledge. Lots of collective knowledge. We thought, how do we share this with you? So for today, what we're going to do with you is we're going to share with you the best money move that we ever made. So bear in mind, we've got probably over a 100 year’s worth of experience sitting on the sofa. What we thought is let's plow our collective memories to think about a thing that we did with money that when we look back, we think, Oh, that was a cracking idea. I'm so pleased I did that. So prepare to have 4 amazing Money ideas shared with you today. So, as I say, we created chatting amongst ourselves.

Julie [00:01:47]:

We're looking for inspiration for an episode. We came up with this one. What were your thoughts, Michelle, when we when we toted this idea?

Michelle [00:01:55]:

I think for me, it's trying to think back to all the things that you've done throughout your life that have made the biggest impact with money. And For me, I've mentioned it many times on here before, and I will still stick by it because it's my little holy grail. And that I have lots of different pots of money, which I put money into weekly, monthly, which then allows me to dip into them when I need to for those things. So I feel a bit more organized, I think. And, yeah, I just feel a bit more in control of my money before when it was all in 1 big pot, and I had stuff coming out all through the month. I didn't have a clue where I was or what was left, and that Can leave you with less than nothing left at the end of the month, and I don't want to ever go back to that position. Does that make sense?

Julie [00:02:38]:

It does. So given that yeah. You have shared this with us before, but given that the episode is about our best money moves ever, I feel that's Kevin kind of give me permission to get really nosy about what's going on with your pots of money. So tell us, what do you have pots of money for? Tell us the different things you use.

Michelle [00:02:59]:

So I have a pot of money for each daughter. So when they need things, I've got something I can go to, and I add to that regularly. They don't know that, by the way. That bit's a bit of a secret unless they listen to this. But I also have Money for my tax because that's the really boring one, but necessary to have. Holiday, Christmas. I have extras account, which is which I just decide that I might want something. Oh, this is the mission this

Julie [00:03:30]:

is the Michelle pot of money.

Michelle [00:03:32]:

Yeah. I can't call it Michelle because then that makes it easier to spend. So if I just call it extras, it's there just in case I need it. And then sort of various savings accounts for different things. So sort of I'm saving for a house. So I'm hoping to buy a house in the next 12 months, so I've got a house deposit fund. So we'll load I've got loads of little pots, but it works really well for me psychologically.

Julie [00:03:54]:

Alright. So is it alright if I ask you a few more questions about this? Yeah. Okay. So you've told us some of the things that you have pots of money for. And what I'm wondering is then do you do sort of budgeting pots lots of money for, like, monthly stuff. So, like, a pot of money for groceries.

Michelle [00:04:14]:

No.

Emily [00:04:15]:

No. Alright.

Michelle [00:04:16]:

So I have 1 pot of money which is what can be spent throughout the Money, which can be so not necessarily bills, but things like food and everyday stuff if we go out. So I have one pot the money for that, really. And that's obviously the chunkier one at the beginning of the month and they're usually the one with nothing left at the end of the month because I've then dispersed it all out everywhere else. So that's sort of my control account. So if I know there's nothing left in that, then I've got a bit of an issue if I'm not at the end of the month.

Julie [00:04:45]:

Okay. So we want that one to be running reasonably healthy until we get around about the 30th. And so how long have you been operating like this then?

Michelle [00:04:56]:

So I've been doing this Emily, well, since I got divorced, actually. K. Since I separated from my first husband. I have only had 2, by the way, but since I separated from the first husband. And I suddenly had to budget the money that I had. And at the time, it wasn't a lot, and I had to make sure that I could meet everything throughout the month because I knew there was definitely nothing else coming at that point. So I started it probably on a slightly smaller scale. And it's just sort of grown.

Michelle [00:05:25]:

And as more things get added to my life, like becoming self employed or We go on different holidays to what we did back then. Obviously, the amount's just become different and bigger in some cases. But it started then, and it was the 1st time I think I ever felt in control of my Money. Because during my marriage, I didn't.

Julie [00:05:45]:

Right. Because that's interesting. Because that's one of the questions I was going to ask you then as a follow-up is how do you feel it's changed your life Being able to manage your money like this. So you mentioned control. What else?

Michelle [00:05:58]:

Well-being, really. I feel Like, I have money. I don't ever want to be in a position where I don't have money. And even though there's some of those pots might be quite small. So we're in January. So the Christmas one's rather sad. But it's about being able to look at it all as a Paul, and I might look at those accounts separately and think, well, there's a little bit in there. There's a little bit in there.

Michelle [00:06:20]:

But if I was to put it all together, it actually looks quite nice. And I think, actually, I'm okay. But what eventualities may come, I'm okay, and I could find money if I need to.

Julie [00:06:33]:

Right. And do you do this all with who you bank with?

Michelle [00:06:37]:

So I have I bank with Lloyds and Starling. Now my main accounts are with Lloyds, and that's because I've been there for years. So I've just naturally kept them, and that's where My daughter's savings accounts are that I have for them, and I can see them regularly. All the other spots, sort of Christmas, holidays, Tax are always stalling because I can't see them every day then. Because if I go into Lloyds to check my other one, I don't need to See them. It does come up on my Lloyds because you've got Women banking where it can come up as a grand total at the bottom, but I don't see them all the time. So it's not something where I think, oh, I could dip into there Because it's not straight away in my head.

Julie [00:07:17]:

I told you I was going to be super nosy about it, didn't I?

Michelle [00:07:20]:

That's fine.

Sara [00:07:22]:

And I

Julie [00:07:22]:

guess the other thing that I'm wondering is, Obviously, apart from, like, the tax pot of money and the host deposit pot of money, have your pots of money changed much over the years, like from when you first started doing this after your divorce to how you do it now.

Michelle [00:07:38]:

Yeah. They were probably more necessity pots Prior to well, just after, you know, getting divorced and being separated. Now I guess it's more What I would like, it allows me to plan. So I will sit down the 1st week of January and decide how much is going into those pots each week or each month for that year.

Julie [00:07:59]:

And I

Michelle [00:07:59]:

set up the standing orders, and that's done automatically then. So I know that money is gone whether I like it or not.

Julie [00:08:08]:

Right. I'm full of questions. Right? I've got more questions. So you mentioned the monthly or weekly standing orders, and I know from previous conversations just that you don't like all your savings going out right at the start of the

Michelle [00:08:19]:

Money. No.

Julie [00:08:21]:

Alright. So Is are some of them done on a weekly basis and some done on a monthly basis? And if so, why?

Michelle [00:08:31]:

I think for me, weekly means it's the same as popping to Tesco's and buying a few bits,

Sara [00:08:37]:

and

Michelle [00:08:37]:

it's just gone. I don't notice it being Money, if I'm honest with you. The larger ones are the things that I know I really do need to save for. So that sort of money towards the house deposit or tax. They go as lump sums at the beginning because it's important that they're aside. And Christmas is weekly because some weeks, I might actually add some more to it. But, again, I don't notice that being gone. But the So the tax and the more essential things do go in 1 at the beginning because then I know that I won't spend that.

Julie [00:09:12]:

Alright. The reason I asked that is because I think the psychology of it affects how successful we are, doesn't it? So I think that's what go on.

Michelle [00:09:22]:

I was just saying, because buying it to Tesco, and we're probably all the same. You go in to buy 1 thing, and you come out, and you've spent 30 pound, £35. And you think, well, those bin bags cost me an awful lot of money because I've just come out with a lot a lot of stuff. But to me so if I put £30 a week Into a port, it doesn't make any difference because I've quite easily gone and done that in Tesco's buying my bin bags.

Julie [00:09:45]:

Right. Alright. No. That makes sense. Sara, you look like you've got a right smile on your face there as you're listening to Michelle. Is there anything you want to grill Michelle about on a On a spending habit, are there any reflections you have for us?

Sara [00:09:58]:

No. I won't. I don't think you need to be grilled any further, I imagine. But that bin bags yeah. Yeah. Yeah. They you know, the you run out of Money thing, don't you? We I think everybody does that, or like going shopping when you're hungry. Yeah.

Sara [00:10:14]:

When I did the whole money pop thing really late, And I still don't break it down as small as probably I should, But I like I like the main things. I just have the main things. And since now we've decided we don't need to pay for our kids to go on holiday anymore, I definitely have a holiday pot. And I have a kitchen pot because my kitchen really needs to be redone, and it needs some structural work. So I have a kitchen pot, but I just think It just makes sense when it's just how it makes you feel, isn't it? It's that whole, you know, feeling in control, and I'm in control of this money. Not money is in control of me. I think it's in and, interestingly, again, it's going to be slightly different for everybody because I think we all do it a bit different, don't we?

Julie [00:11:04]:

Yeah. The

Sara [00:11:05]:

same kind of thing, but we all have a slightly different approach to it. Yeah.

Julie [00:11:10]:

Emily, just wondered if you had any reflections or questions for Michelle's money management system.

Emily [00:11:21]:

Which is the Money which is the one part that you resent putting the money into? Or are you all happy about each one?

Michelle [00:11:30]:

No. I probably say the tax one, if I'm honest with you. It's one of those things that when you're self employed, you have to put your money aside for tax and that and that's great. And you're actually really thankful that it's there when, Oh, end of January comes. However, throughout the year, you do get a bit sort of oh, okay. That's a lot of money that's sort of going over. But it is worth it in the end, but that is the one that you do sort of get a bit about and think, oh, I could do so much more with that.

Emily [00:11:58]:

And which is the one that you're very happy to put money into? So, for example, if you've got a bit of a windfall, Which one would you be clawing to put that extra bit of money into?

Michelle [00:12:09]:

That would probably be holiday or Christmas. Holiday because I love holidays. I love being somewhere hot and sunny. And Christmas, it's about me being able to spoil my family and do the things I want to do for them. It's not about what I spend on me for that. That's what I can then give to everybody else. And The experience of Christmas, what can we do together? You know, go away to London for a weekend or go and do things. For me, that's really important, and that's really special.

Michelle [00:12:38]:

So they would be the 2 pots it would go to because the house deposit fund is just will build on its own As I add savings, but they've been my 2 sort of special ones, really.

Julie [00:12:49]:

Alright. Hey, Michelle. Thank you very much for submitting yourself the grilling. I don't think it's a grilling. It's like a thorough questioning. Illuminating research for the listeners. It's not me just being nosy. Okay, so that is a cracking Absolutely cracking money move that you've made because it's left you feeling like you're mastering money now Money not mastering you.

Julie [00:13:13]:

So then as I move along the sofa, Sara Oh. What's the money move that you've made that you sit there and you think, I am so nailing it when I decided to do that?

Sara [00:13:25]:

Well, this is going back quite a long time now, but it was the one that made the biggest difference, out of everything that I've ever done. And that was with, my current husband. We Cafe together separately running independent separate homes. All our money was completely separate. And being a very independent, young lady, shall we say, I had no desire to share any financials of any sort. And we were quite away into the relationship. We've got children. I think you might know we were married, and we still had completely separate money.

Sara [00:14:01]:

But what that led to is when we were juggling young children, and quite frankly, life was quite hard. You know? There wasn't a lot to go around by the time you're both trying to juggle work and 3 young kids. It became that there was no sort of communication. So although there was, like, a joint account for the household bills, there was no real nobody really knew where all the money was going and how much was coming in, and it was it was ridiculous, to be honest. You look back now and think, what on earth? But we just we just didn't. And then one day, we just sat down and went, this is a bit silly. And there was a catalyst of a quite significant event, that led us to totally changing, how we do it. And then literally, I don't suppose I even realized at the time that I was probably sitting down doing a full financial plan, but we literally now have lots of conversations.

Sara [00:14:54]:

We share everything, and we went initially to the other extreme where we got rid of all the separate accounts and just had joint. And then we realized that that was a bit crazy as well. It worked for a bit when they were really young, and there was just all the money came me. And then we could know we've got money for childcare, money for this, money for that, as like Michelle was saying. But then it was like Well, you know, when you start to earn a bit more Money, and it was like, well, actually, you know, we can't afford to save for things or I want a bit of my money or you know, we knew if we bought each other a present because it all came out of the same account. So then it just gradually evolved. And by the time I got into more serious financial planning from a professional point of view. I could then look back on that journey and think, well, I went a long way around that, didn't I? But we worked it out in the end.

Sara [00:15:46]:

And I think the biggest thing was just sitting down and us going, why on earth are we not talking about this because we're making it so hard for each other. So, actually, it's less about the accounts joint single or whatever. It's more about the fact that we actually talked. Have a conversation, and we still do that. And one thing that we still do during Christmas New Year Women you get that nice little lull time when you're in, you know, Money is we just have that nice little reflection on the last year, the good stuff, the stuff we're grateful for, what we're worried about. What about next year? We talk about the kids and all those things. And in all of that is the money, the practical stuff. So we had certain policies that finished this year, for instance, because the kids got to a certain age, you know, protection policies and all that sort of thing.

Sara [00:16:37]:

So, again, it's just keeping that communication going. And I think that's been the biggest thing. Doesn't matter how it's evolved or what else has happened along the way, but the fact that we're able to have that conversation and, oh, I'm a bit worried about this. I've been a bit silly with this. What do we think about this? It's just the biggest thing, especially when you're in a relationship.

Julie [00:16:59]:

Okay. So here come my questions. Are you ready?

Sara [00:17:02]:

Hello? Yes. You are.

Julie [00:17:05]:

You know what I'm like. So I guess as I'm listening Send to your talk there. And I can see how it's such a simple thing, but really, really powerful. But simple is not always easy. And so what I'm curious about is, have there been any challenges you and your husband have experienced along the way As you started, maybe probably more likely at the start of this trying to communicate money, aren't we?

Sara [00:17:31]:

Well, As I said, there was a catalyst of an event that was fairly a catastrophe. And so it was a it started from a very intense emotional journey of fear. We were going through a very, very tough time, not between us, but what was happening to it. So that was kind of what led to a series of events of things happening, and then it has hap you know? And it just it almost happened naturally. But now sometimes I might feel a bit of build-up of resentment if because I'm still the one who generally will manage. Not Michelle. Let me put some money, do things like that. But then he, you know, you have to say, oh, no.

Sara [00:18:13]:

Actually, why am I being then be resentful? Does he actually know? Have we talked about it? So, but no. Fortunately, my husband is very laid back about these things. If he wants to do something, he will say, thinking of doing this or doing this for 1 of the kids or something. Is that okay? Can we do that? Can that come out of x, y, and zed? And we just have a look, and we talk about it. But challenges between us talking about it are not usually the issue nowadays. It's usually the outside things that happen that put us into the point where we go Money of us or both of us might go, uh-huh. Might lead to a conversation that might start initially a bit up here, but then you gradually come back down to you know? So it's no I know, yeah, we had a we've had a lot of challenges a good few years ago now, but thankfully Jesus. I'm too good.

Sara [00:19:07]:

Love's calmed down a bit. Right.

Julie [00:19:09]:

So like you said, I think it's only it's perfectly understandable and natural that sometimes when we start conversations about money, it can occur when we're in slightly heightened it's in devotional state. So that you've been told about money with your partner now for a long period of time. So have you got any top tips on how to If the conversation started and 1 of you or, god forbid, both of you are in a heightened emotional state, any tips on how to sort of just decompress that a little bit?

Sara [00:19:36]:

Well, and, certainly, in my experience, unless it's something that you absolutely have to have a decision on in that next few minutes, He's just try and say, we're not helping each other here, are we? Let's just walk away and calm down because you have to come at it. And it's not easy when you're in a difficult situation, but you have to try and come at it when you're both feeling vaguely calm. And dare I say, you can't remember why you're with this person, and you do actually love them even though this is all a bit shit at the moment. But you kind of need to come To a calm space and hopefully where you're not distracted and there's an environment when you can be quite relaxed and say, okay. We know this is a bit of shit. What can we do? Well, how can we get around this? How can we talk about it? And it's not easy because when you're in those situations, it just happens, doesn't it? But being able to do that is, in my experience, the best thing. And that might mean sometimes that one of you has to walk away and leave the room Right. Depending on your relationship.

Sara [00:20:40]:

I mean, you know, quite lucky with mine. But, yeah, it's making sure you've got an environment where you can at least try and have a calm conversation.

Julie [00:20:51]:

Alright. So, Michelle, as you're listening to Sara talk there then about how her and mister Walker chat about money, Any reflections or questions for Sara?

Michelle [00:21:04]:

I think for me listening, it's one of those things that actually that's the position I would quite like to have alongside what I do. But because myself and my husband both Cafe from previous relationships, and we've both got children from previous relationships. Actually, mixing the finances becomes far more complicated because I might want to do something for my children and he might want to do something for his children. And then you become, well, that's my Money. That's your money. How much have you spent? How much have I spent? And I think I've often thought about could we do that? And that's always the thing that comes into my head because we do actually have 2 sort of separate lives aside from our marriage together. Does that make sense?

Julie [00:21:49]:

Mhmm. Yeah.

Michelle [00:21:51]:

So, you know, if I could find a way of having that, what you have, you know, Sara, with my husband, that would be great because I could have my pots and have that. But For me, maybe for other people in my sort of, you know, situation, that might seem a little out of reach. I don't know.

Sara [00:22:07]:

Yeah. It could be. Unless I mean, would you be able to have something where you still manage things separately, but there's a little small part that you both contribute that is your joint for your joint little your joint Which is

Michelle [00:22:20]:

what we're moving towards that. So

Sara [00:22:23]:

It does it does, doesn't it? With blended Money, it is always a challenge, I think.

Michelle [00:22:29]:

But, ultimately, that is something I would love. You know, for me, that would be you know? So I think that's great, Sara. I think it's a lovely way to be, and that's how I think it If I could have it that way and if I could get my head around it that way, that would be amazing. So I'm going to work towards that.

Julie [00:22:46]:

You're aspirational, Sara. Your aspiration. Emily. Emily, what are your thoughts on this?

Emily [00:22:55]:

Thoughts I was feeling incredibly energetic and bouncy when I came into this conversation, and it still got very serious. Anyway, meeting you on your level, In your sensible state. No. I think it's really interesting. Obviously, Sara and Michelle have both talked about the way that they do things, obviously, different Situations. I mean, similarly to Sara, so my current husband I like the way you use that word, Sara. Current husband. My current husband and I, have 2 children who are 12 and 13.

Emily [00:23:37]:

They are still very much, you know, needy. We just keep saying that we can't wait until They, are able to have their own jobs, so at least they've got a little bit of their own money coming in. But they're so incredibly financially dependent at this stage, obviously. And more than that, we made a commitment to them to send them to a private school, which is why we have to work very, very hard to do that. And I feel that we're hugely stretched in terms of making You know, having made these commitments, it's like we've got 3 mortgages, and we manage our finances on a separate basis. And given that we have so much joint expense, I do find that that is a bit bizarre. So it's not necessarily my choice that we manage it on this sort of quite separate basis. We have a joint account that's for the bills, Including mortgage, school fees, all of that.

Emily [00:24:41]:

But, Yeah. I think that it's crazy when you can't see the big picture. It's Because he doesn't understand what my picture looks like, and I don't really understand what his picture looks like. And all that does is cause a little bit of disharmony at crunch points when we start talking about, oh, where are we going on holiday? And I said, oh, let's go to Brazil. And he was

Sara [00:25:08]:

like, yeah. But you

Emily [00:25:10]:

how much are you putting towards the holidays? Oh, I don't pay for the holidays. You pay for the holidays. I pay for x, y, zed. No. Well, we can't afford Brazil. Well, you know well, what can we afford? Because it's these conversations all of the time is that we need to know How it looks on a joint basis, you absolutely need to know. And how are you going to know that unless you're Completely open, have access to each other's accounts, or you're communicating about it. And, yeah, I think we're extremely we have extremely busy lives.

Emily [00:25:41]:

The money comes in. The money goes out, and there's not enough communication. So I love the way that you're doing it. And, yeah, I think that is the perfect way of doing it. Right?

Sara [00:25:52]:

In practice. That, you know, I'd sat down and worked it all out. But it just kind of happened, and it's only when you look back that you think, oh, yeah. Yeah. I have used that. I have used examples like that with clients because if you're doing financial planning with a client, you're always looking at the bigger picture, the whole picture. That's what you do. If they can't each see the whole picture, that's quite yeah.

Emily [00:26:19]:

You can't ever answer. And so I had a lady in this morning To say, oh, I'm getting a settlement from work. I want you to tell me how much to put into my pension. On the face of it, it sounds like such a simple question. You can't even begin to answer that until you know the whole picture.

Julie [00:26:36]:

Me. So, Emily, having listened to Sara living in Nirvana, the promised land of joint finances, do you feel inspired to go and have a chat with mister Poole and say, you know what? I think we could be talking about money a little bit better, and I think it's going to make both of us feel a bit more secure and a bit happier.

Emily [00:26:56]:

Yeah. I definitely think so. I mean, I run the spreadsheet that says what our joint expenses are, so I'm aware of it. And but, frankly, that's not fair because I'm dealing with the stress sometimes of having to make it all work without Him and he's oblivious. So every now and then, I'll just have a bit of a meltdown and say, oh, well, you know, there's been you know, we've had to buy new sports equipment or trainers for everyone and, you know, we're a bit short this month and you need to put Money in the joint account. And when he's like, well, What do you mean I need to put my money to know what to count? You've been over spending. No. I haven't.

Emily [00:27:36]:

It's called life, and this is what children cost. And this is my biggest gripe is that our largest Joint expense, love them, are our children. And children are expensive.

Sara [00:27:49]:

Better.

Julie [00:27:50]:

You see

Sara [00:27:51]:

too expensive when they grow up too.

Emily [00:27:54]:

Children are expensive. And so I think I would be very interested to know the number of I'm going to be it's probably sexist here, but it is the Women in Money Cafe, so I think most of our listeners are

Julie [00:28:08]:

apologies to any Women for whatever Emily's about

Sara [00:28:10]:

to say

Emily [00:28:10]:

next. No. But, basically, the person running The day to day expenses is the one that is going to be aware of how much things cost. And therefore, they Poole like myself are not surprised by the fact that children cost money. My husband, I think, is sometimes a little bit surprised just how much money children cost. And I think there's probably a lot of the families in this country where 50% of the relationship is not really particularly clear on how much children cost. So, yeah, having that ongoing conversation is important.

Julie [00:28:48]:

I think in any relationship, they get you get distribution of tasks, don't you?

Emily [00:28:52]:

Yeah.

Julie [00:28:53]:

Yeah. But I think well, listening to you, Sara, what's really clear as that you'd both of you come to the conversational, generally, I'm going to assume, but there's no blame and there's no judgment. Not Women if some if you're if you're starting to feel yourself a bit art, you're like, okay. I've possibly not communicated this to him. So I don't know if Emily is finding a way to communicate to mister Pete in a way that he's going to be receptive to.

Sara [00:29:20]:

Yeah. Yeah. That's it's that latter comment is the one that's important.

Emily [00:29:25]:

They probably not spring the Brazil ID on him last minute, but kind of planned.

Julie [00:29:30]:

I would be building up to the Brazil thing. I would leave brochures lying around the house.

Emily [00:29:34]:

And I'll take Michelle's tip and set up a little pot. Brazil.

Julie [00:29:41]:

Alright. So that leads us on then, Emily, to what's the one thing that you have done with money that you're late. You know what? That was a super smart move. Check me out.

Emily [00:29:55]:

I think it was probably a few years ago. I think it's that we joined COVID times, actually, beginning of COVID. And I think it was my grandfather's estate finally got sorted out, and I, I managed to get a small inheritance. It wasn't huge, but it was enough to have to think twice about, well, what do I do? I'm not just going to stick it in the current account. And, Obviously, the options that you have available as to what to do with your Money, of course, there's a lot of options. It's you can go and blow it on a holiday to Brazil. You can stick it in a current account and get hardly any money on it as it was then. You can, put it in your pension, and You can stick a Jennifer investor.

Emily [00:30:41]:

So many options, and that's why often, people use financial planners like ourselves is because they get this amount of money, and they don't know what to do with it. And I thought about it, and I did the usual, yeah, do I Pay off the credit card. Do I, spend it on you know? All of these options.

Julie [00:31:04]:

Handbags were in there, Emily, weren't they? Handbags were an option.

Emily [00:31:09]:

Handbags. No. I'm not a massive handbag fine. I did buy 1 Money, plus for that. I used the pop method. Thank you, Michelle, for that. I earned that one. So I was very proud of that handbag.

Emily [00:31:22]:

I'll let you know. No. So what I decided, though, was that I need to be sensible. It's an a chunky enough amount of money not to just chuck it at one thing. And I thought of it in terms of how I speak to my clients about financial planning, and it's to make sure you're Okay. In the short term, there's something for the medium term, and then you've got something in the long term. So breaking that down into products, If you like. I used so my short term was pay off the credit card, which wasn't massive, but it was, you know, enough to be an annoyance.

Emily [00:32:00]:

So I thought, oh, get rid of that, a little bit into the current account. And then the medium term money being the ISA because, obviously, ISA's a great place to park it, and invest it, but I've still got access to it if I need it. And then the last section was into the pension, which, you know, I won't be able to touch until the 9.57. But it was important to do that because if you worry too much About the here and the now, there isn't going to be anything left for your future self. And so, Obviously, I'm always talking to clients about, you know, short, medium, and long term money, and I have to therefore then apply that To this this bit of Money. And I basically split it about 3 different ways and did exactly that. And I think sometimes We can overthink these things. Oh, should you do this? Should you do this? How much? You know what? Well, actually, sometimes, if it's causing you stress and you're deliberating too much, if It's a large amount of money.

Emily [00:33:03]:

I'd definitely recommend seeing a financial planner. I will talk it through with you and make sure that you put it in the right place. Or if it's just you know, if it's not a massive amount, but it's something that you can sort out yourself because you could do it a lot worse than just saying, okay. Let's just split it 3 ways and go short, medium, long. That's I think that was very useful bit of advice to myself at that time.

Julie [00:33:24]:

Alright. So thank you for sharing that. I think I think maybe I speak to a lot more financial advisers than your average financial adviser for various reasons. And what strikes me about the story there, Emily, is You've done some classic financial planning and good financial advice there that we are all monumentally bad at doing for ourselves. Yes. Because I think I have I have been quite open before and confessed about I'm a little bit too medium long term, and I don't give a toss about today. Julie still hasn't got enough on cash. She's still got it all invested, but I'm working on it.

Julie [00:33:57]:

I'm working on it. So I want to commend you on actually doing some good financial planning for well. Thank you. But I'm curious. Like, having done that several years ago now, as you look back on it, Is there anything in particular that you take away from having made that decision that helps you going forward?

Emily [00:34:25]:

Yeah. I think that, I'm very

Sara [00:34:29]:

much

Emily [00:34:29]:

more engaged with my older self, my future self. They do say that that is the biggest problem that most people have with saving for the long term future is that they can't even you know, there are every there's so many people living in the here and the now that they're not even considering the future. Sure. So previously to putting that chunk of money into my pension, I have not long left the corporate world and had I have quite a large ish, final salary pension. And I think That when you when you're lucky enough to have a final salary pension, you tend to think not Emily think about pensions. You think, oh, yeah. I've got that. That'll be fine.

Emily [00:35:16]:

That'll look after me. That and the state pension, that's all I need. And I think anyone who falls into that category is probably missing a bit of a trick because they're not really thinking about their Retirement. They're just parking it and going, let's look after myself now and in the medium term. And the final salary and state pension will take care of the longer term. Done. And so, yeah, me deciding to put that money into my pension meant I reviewed my pension situation. I actually took out my ABCs from my from my final salary plan, which, you know, was little ancillary pot on the side and added that to the amount of money that I was putting in the pension.

Emily [00:35:59]:

I reviewed where I would put that pension. Obviously, you know that I'm into ethical and sustainable investing, and so I really looked around at which pension provider was going to suit me and then which funds Says not to be hypocritical and be invested in things I didn't feel right about. And, yeah, I feel confident and happy that I've got that report, and that's a report that I've continued to use going forward, not resting on my laurels and saying, okay. It's fine. I've got the final salary. I've got the final salary, and now I've got the defined contribution, which is the best of both worlds.

Julie [00:36:35]:

Alright. Fantastic. I'd say that's quite an important lesson to have taken away from it. Michelle, any questions or any thoughts on what Emily did with her inheritance?

Michelle [00:36:45]:

I don't need that. Really, it you've shared it between, as you say, today and the future, and I think that's something we all need to do even with the short term things in between, you know, if there are things that we want so say saving for a house, it's a little bit further out. I've been doing that for sort of 4, 5 years. So I think if we can always have a mind to what might come later I mean, I do a lot of divorce work with Poole, and they always think about today. Opposite to Julie. They think about today and not what's coming later. And it is quite hard to do, But it is really important. So now I just think it's you've done a proper financial planning job on yourself, which is, as Julie says, something we don't often do to ourselves because we're all a bit naughty like that.

Michelle [00:37:31]:

A bit like your builder's house that's a complete wreck. Mhmm. You know? So yeah. No. I just think it's good. And if we can all have a little bit of short, medium, and long term when we think about what we want, we can plan for that. And if we can plan in little chunks, that's better.

Julie [00:37:50]:

Alright. Thank you, Sara. Any thoughts or reflections or questions from yourself?

Sara [00:37:57]:

Well, I think we've pretty much covered it, but, yes, good bit of self financial planning there. It's funny, isn't it? As soon as you receive any sort of money like that. I find myself because years ago, I'd have been definitely time out, shorby or holiday book, whatever. I was the world's worst. Live for today. Spontaneous. And I find myself not okay at home to put almost putting, like, your professional hat on. Okay.

Sara [00:38:26]:

So what are we going to do with this? I'm just totally because otherwise, it'll just be you know, the inner self will come off, and it will be blown in about 5 minutes. Mhmm. And I don't mind admitting I'm buying that quite hard because I always think, well, it's not money we've worked for. I've just Money, you know, therefore it's you know? So I love I love what you've done with that. And I have to make not make myself. That's probably a bit Emily, but I do sit down and, you know, do things like that very similarly. But I always take The View with that whole short term thing because I'm, again, the opposite of Julie, and I think we've talked about this before. I love living for today.

Sara [00:39:05]:

I wouldn't have any problem with, with not having anything long term, especially in the past before I, you know, knew all my things that I do now. But, obviously, I do have long term stuff. But I take the view that if I want to live for today, for the rest of my life, Then I have to do a bit of long term planning to ensure

Emily [00:39:25]:

I get noise. Go, yes. Today, we're going to go and do this. So, yeah. I I've also applied this short well, certainly yeah. I guess I have applied the short, medium, long term philosophy to my health. I think wealth and health should be sort of very much approached in the same way. And I know it's January, and ask me in February, and I'll probably not really dry and, you know, whatever.

Emily [00:39:51]:

But, yeah, I'm really this is I think one of the consequences of thinking About pensions and retirement is that I'm also now I'm really thinking about what kind of retirement am I going to have if I'm not healthy, and I'm still young enough now to make decisions that hopefully will allow me to maintain my health. And so I heard a statistic the other day that said, Women on average spend the last 19 years of their life in ill health. And men

Michelle [00:40:22]:

felt that

Sara [00:40:23]:

brought the mood down, doesn't it?

Emily [00:40:25]:

Alright. Yeah. No. I'm just saying, also bring this long term thinking to your health. Yeah. And then yeah.

Michelle [00:40:32]:

Yes. Because trust me, by

Sara [00:40:33]:

the time you're in your in in on the wrong side of your fifties, it definitely is in your mind. You know? At least in your mind. You know?

Emily [00:40:39]:

There's no point in having all of those pension pots if you can't go to Brazil.

Sara [00:40:45]:

Yeah. Quite.

Julie [00:40:47]:

Alright. Thank you for that, Emily. I think, listeners, what I'm taking away from that, and I don't know if you caught it there. It's like a brain hack that Emily's done on herself Because she wasn't that focused on future self. But the act of splitting that that sum of money at that point in time into sort of no money and later money It's kind of reengaged with being able to plan for a future self. So here's a little experiment for you. If you've got a 100 pound or something spare, Go and cut it into 3. Just go and stick £33 in some Cash Instance account.

Julie [00:41:21]:

Put £33 somewhere that's made your Money, and go and put 33 in the stock market and just see if you can hack your own brain to engage with your future savings. Just a thought. Okay. Now Nobody's going to be surprised, are they, that my thing is a long term thing, are they?

Sara [00:41:41]:

So That's good. Definitely not follow them.

Julie [00:41:44]:

So, obviously, I clearly need to work on my impulsivity and my live for today thing, but not right now. So there's loads of things that I've done with Money over the years. I look back and think that was a cracking idea. There's also plenty that I think We're absolutely bloody stupid ideas, but that's a different episode. But the one that I'm going to share with you today is and I think I might have touched on this in previous podcast episodes. I never really paid that much attention to my pension until I was in my early forties. Right. Just wasn't paying attention.

Julie [00:42:16]:

I'll let you in a little secret. Why not? Because Emily kind of hinted at it. Right? You're not going to believe this. Right? But I only joined financial services for the 6 week course. No. I did. I think that was, like, 25 years ago. I was going to go and be a teacher.

Julie [00:42:35]:

Well, they got final salary pensions. Boom. I'm sorted. I didn't actually intend on staying for this long. And then it dawned on me in my early forties like, oh, shit. That teacher thing isn't really working out. You best sort out a pension love. So I started paying attention to my pension.

Julie [00:42:54]:

So I went and rounded up all the little bits that I heard from previous employers. I do have a small final salary Money. But, like, the pot of Money, it isn't the final salary one. It wasn't very big, folks. I think it was about £30,000. Like, oh, That's not going to get me very far, is that? And so I started put I think, put in a Poole a month to start with. And then I invented the 10% rule. They have just invented this.

Julie [00:43:19]:

It's not a real thing. Don't Poole it. So what I would do is I would just keep putting up the contribution whenever I could. And then every January, So round about now, I have to increase my pension contribution by 10%. And you could do 5%. You could do 3%. You could do whatever. And the act of making sure that I'm always increasing the contribution is what's totally turbocharged my pension.

Julie [00:43:44]:

So I've gone from early 40 having a pension pot of about 30,000 pound to being well on track to being able to retire when I want with the amount I want. So Anybody that's listening that's in the forties or even in the fifties thinking, shit, I've left this too late. What's the point? I guarantee you, It is doable. And it was this 10% rule that has really got me from, like, this late little, tiny, tiny pension that someone in financial services should be ashamed to have To being on track, to be able to retire when I want, with what I want. Because I thought that was unachievable. So that's the thing I did. I'm really happy I did it.

Michelle [00:44:26]:

I think it's amazing.

Julie [00:44:30]:

Right. Great. So no grilling. No questions. No reflections for joining. We'll just go with that. That's brilliant. Perfect.

Emily [00:44:37]:

I've got a question. Why 10%? Because that's just a little bit normal. Why not It's easier on the maths. 17%.

Julie [00:44:46]:

By 10%. Because I can remember when I first started in financial services, you get pensions. You could have them escalating where they'd either go RPI, CPI, or 5%. That's just what you got back then. And I thought and I looked at it. If I put it up by in fact, who wants to be messing about with CPI and RPI? Not me. No. Right? I want a number that's easy to work with.

Julie [00:45:05]:

Now I looked at what putting out by 5% would do, and I thought, well, that's not really stretching me. I can afford a bit more than that.

Emily [00:45:11]:

Mhmm.

Sara [00:45:11]:

So I

Julie [00:45:12]:

just start with 10%. It's a round number, and it stretches right

Emily [00:45:15]:

at the end.

Julie [00:45:16]:

Yeah. And it's just it stretches me just that little bit, But not so much that I'm going to pause it, stop it, reduce it because that's a whole motivation thing on there.

Sara [00:45:28]:

But I

Julie [00:45:28]:

love the idea when

Michelle [00:45:29]:

you think about when we had the episode before about sort of the bills that went up with inflation, so your mobile and everything that would CPI plus the 3.9%, and it still really bothers me.

Julie [00:45:41]:

12 months on, listeners. We still don't have an answer.

Michelle [00:45:46]:

No. We don't. But it's one of those things actually. We all had to do those with all those other bills. And we all you know, we have to suck it up. We get on with it, and we did it. And we managed it, and it was fine, you know, on the whole. So actually, by doing the 10%, you're doing the same thing.

Michelle [00:46:02]:

It's enforcing it and making the change happen without giving yourself a choice, I guess. So I think, you know, the mind Set behind that is brilliant because it happens with everything else. Why shouldn't it happen with your pension contributions?

Sara [00:46:19]:

Yep. Very true. I had a critical illness we had. I still have critical illness policy that I took out in my very, very late twenties. And I don't know. I think at the time I did it, I was single. I thought I don't need life cover and all that kind of stuff. It was just me.

Sara [00:46:36]:

But I knew that I didn't want to be stuck with a mortgage and everything else. I want to check out this critical illness. It was a whole of life, which, for those of you who are old enough to remember that you could do a whole of Cafe. And I did it on an escalating basis, so it did used to increase each year. And, again, you'd get your annual letter saying, oh, it's coming up. Never really took Money but you did. You're right, Michelle. You just you just go within because it was the Money thing I knew I should never let go of.

Sara [00:47:04]:

It was really, really essential. I kept that going. And then I think it was I think it was when I turned 50, they suddenly go, oh, you're dodgy now. We're going to charge you a lot more money. And I think the 1st big hike I stuck with. And then after that, they review it every so many years. And then it got to the point where I thought, well, now I know how much I need. So I was able to say, okay.

Sara [00:47:28]:

I won't let the premiums increase anymore. But the amount of cover I started with to what I've ended up with, you know and the benefit that would benefit me and my family even now. You know? It it's it and I didn't really notice it all those years, all the other stuff that I probably would have stopped, but I kept it going, so it does work. It does work. There are just certain things you just don't stop unless you're really up against it. But, yeah. Mhmm. So one that's one good thing I started when I was younger.

Sara [00:47:59]:

I can't go wrong.

Julie [00:48:01]:

Alright. So then as we draw to a close then, just a quick summary. So the 4 cracking things that we did with money that we're really pleased that we did, Michelle has got her pots of money, which is allowing her to feel like she is totally mastering money, and she's completely in control. Sara is the queen of communication and has the most harmonious marriage, apparently, out of all of us as they chitchat about money. And then you've got Emily who's done who, for a financial adviser, has done the best financial advising job for herself with her short term, medium term, and long term money. Then you've got me with my magic 10% pension. So these are our 4 massive, massive money lessons That we did for ourselves. So if you've got another one that that you think we need to know about, do drop us a message because we love to hear this stuff.

Julie [00:48:51]:

But it just remains for me to say thank you to my lovely, lovely co-hosts, Sara, Michelle, Emily. Thank you. That's it. You're welcome, Jules. Yeah. Anytime. You're welcome. Same time next to me.

Julie [00:49:08]:

No. That's it. I've remained there. I'm going to thank you. The listeners, thank you for listening to us. And until next time, please do take care of yourselves.