Welcome to Money Matters: GLAMOUR’s new weekly dive into the world of finance – your finance. These uncertain times have reminded us just how much understanding our money matters and yet… how little we talk about it and how much it’s shrouded in secrecy.
This stops now.
Keen to break that money taboo, we’re chatting all things personal finance from daily budgets to ISAs and pensions. Each week, a woman in a unique situation will give us an honest breakdown of her finances, and our expert will tell her easy tips on exactly how to tackle it. So, grab a cuppa, take a seat, and let’s talk about money…
Harriet*, is 27, living in Manchester and working in tech. This is her money month…
I now live in Manchester after relocating from London to live with my boyfriend of three weeks when lockdown occurred. I know, a bit crazy! But six months later it seems to have been a good gamble.
I work in tech for a bank, which means I am lucky to be able to work from home throughout Covid, and will look to work remotely for another while, however I have decided that Manchester is where I want to be long term with friends and family being located here. I am lucky that means I have no rush to move roles but still face a certain level of uncertainty in the future as I will probably have to take a sizeable pay cut to do so.
I was saving for a house before Covid in London and so had a sizeable chunk of a deposit, which means I am ready to buy into my boyfriend’s house, once the fixed-term period of his mortgage is over.
I also want to start saving more for the long term and get some more serious investing under my belt. I am comfortable with stocks and shares ISAs, and will get a higher risk one next financial year. However, I’m still a bit unsure on how to get involved in the nitty gritty of investing, and I don’t know if I am missing any tricks with my finances.
MY ACCOUNTS
Current account: £1,298
Savings accounts: ‘Fun’ savings: £755 in Monzo Pots for Christmas and holidays.
House/easy access savings: £43,200 in a Marcus by Goldman Sachs savings account, and a Help to Buy ISA
Investments: £5,380 in a Stocks and Shares ISA
MY INCOMINGS
Annual salary pre-tax: £55,000 (After pension and benefits)
Monthly wage: Pre-tax £4,663 (After pension and benefits); post tax £3,112
Monthly wage post Covid-19: Same
MY OUTGOINGS
Rent: £475 (Living with boyfriend on discounted rate)
Bills: Phone, £10; Spotify, £6.56
Other: Online fitness coach, £45; charity donations, £20; savings,£850 (over Covid, I normally put an additional £400); investments, £300
Splurges: £150 on a massage for me and Mum as a birthday present, and
£60 meal out for friends birthday. Throughout lockdown I have lost a lot of weight with a online coach, now I’m trying to build a new environmentally friendly wardrobe, so been a few splurges on nice jeans but doing it very slowly, and trying to do second hand as well to minimise impact on the planet.
Weekly budget: I do not tend to budget like this, I track against my remaining money ( using an app that takes of my upcoming bills and credit card) and number of days left before pay day. And notice if it’s going up or down too much. If I am underspending transferring to savings, and overspending I bring it back in line
What I spent this month: £2,600 So far since payday (£1,300 into savings)
MY DEBTS
Student debt £269 a month. I have about £15.6k left to pay off/
MY MONEY MOOD
What I want to save for: To buy into my boyfriend’s house I need £50,000 to match his deposit (+fees), if I remain on track it will be mid next year, however his fixed-year mortgage won’t end for another two years.
I want to maintain a ‘f*ck-off fund of three months’ salary in case anything happens. Once I achieve that, I’ll aim to save for six months. Also saving for (hopefully) a nice holiday next year.
How I want to plan my money for the future: I like having my three pots of money.
I would like to consolidate my pensions, I am contributing a good 7%, however would like to do more.
I want to start investing more seriously, moving a bit to a higher risk portfolio so I can look to retire earlier
My worst money habit: I have a few.
– Obsessively checking. I am always on Yolt, and updating my spreadsheets to see how I am doing, it is a bit competitive. But also makes me do things like paying my credit card mid month (which doesn’t help my credit score) and panicking if a big spend is coming up even when I know I can afford it.
– Gifts. I like sending people things, and doing nice things for people not just on birthdays. So I am trying to bring that down while aligning it to my values.
– Food/socialising. I love food, so being on a diet really helps as it brings my spend down, but I control this by not having the money in my account.
My biggest money worry: That I am not making the most of my money, or missing a trick. Though I know I am relatively OK, I worry that my income will stop or reduce, with everything going on and trying to relocate to Manchester. I will have to take a pay cut, and I worry that I won’t reach my goals.
Current money mood: 💪 🕵️♀️ ☀️
OUR SPECIAL EXPERT THIS WEEK IS PATRICIA BRIGHT, WHOSE NEW FINANCIAL CONSULTANCY PLATFORM, THE BREAK, LAUNCHED THIS YEAR. HERE’S PATRICIA’S ADVICE…
1. Stay positive!
Firstly, very glad to hear that six months down the line everything is going well with your new boyfriend. Everyone is feeling a level of uncertainty at the moment, especially when looking to the future. It’s a really tricky and stressful time, and there’s no knowing where we will all be in six months or a year, but even with your uncertainty about the future of your job it sounds like you’re in the right career working in tech (and that should give you some more confidence).
2. Cautious investments
From what you say about your savings, you have wanted a steady return on your pension and now you’re considering diversifying your pension fund and taking more risks. I think taking more risks can be a good thing, but it’s important to consider the climate when you’re taking these risks so that they are calculated. In the current financial situation, stocks are moving up and down constantly so you need to be aware that taking a higher risk could both yield a higher return but also a bigger loss. This might not be the best time to be taking risks, especially if you’re anxious that your salary may decrease. I would advise you to consider diversifying your investment portfolio outside of just stocks, and if that’s what you want then maybe move some of what you have in your easy access accounts into your investments. If you’re still keen to invest in the current climate, check out this video from my channel, The Break. It will help with tips for investing and savings when the economy isn’t at its best.
3. Home is where the heart is…
If you’re contemplating buying into your partner’s mortgage, there are many avenues worth considering. Personally, I think it’s a blessing in disguise that his fixed term doesn’t end for another two years. Six months into being together, this could add stress to your relationship as well as your bank balance. It may be helpful to reassess once his fixed term is up and then decide whether you can get a better rate together or if you’d want to move elsewhere. You will also need to think about the share of the current capital in the property amassed by your partner so far and on what terms you would be joint mortgagees.
4. Take your time
Remember: successful investment takes time. You are doing all the right things and just need to be patient. You’re in a fortunate position right now with your savings, investments and pension plan, especially as you’re also on a discounted rent rate. Have confidence in yourself, and if you feel like you want an idea of more specific options, then seek out a financial advisor. Either in person, or online (Nutmeg or Munnypot are good options) – advisors can help you articulate your investment goals and make a plan that will work best for you.
5. Stop worrying
It’s a stressful time, and it may feel like there are so many things to be worrying about – but try not to. You have a lot of positives in your life right now. Obsessively checking your accounts and apps won’t change your spending or suddenly mean you have a better plan. Try to set a limit to the amount of times you check Yolt and your spreadsheet, and it’s a good idea to set aside one time a month where you sit down to deal with your finances. Taking a moment to read some books or watch some advice videos to settle your anxiety and understand your habits a bit more. Have a look at my YouTube channel, The Break. I use my background in finance to help give beginners tips and information on investing, pensions and buying property – and help to break it down using normal everyday language. Some good books I’d recommend reading are: The Chimp Paradox, The 7 Habits Of Highly Effective People and Feel The Fear And Do It Anyway.
Check out more advice on The Break’s YouTube channel now.
*Name has been changed. Join GLAMOUR’s new Facebook group, Money Matters, for more exclusive finance content.
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