Of the many things starting this blog has taught me; to follow my dreams, take a chance, learning to cope with failure, the fact that I am horrifically bad with my finances has got to be up there at the top. The irony is that a job managing other peoples’ money has facilitated a fairly unhealthy spending habit. I didn’t know just how bad it was until I quit my finance role, my husband questioned “where does your money go?” and I started to put pen to paper to calculate my excessive spending.
I’m ashamed to say I’ve lived my life for too long wanting for very little. If I came across clothes I wanted I’d usually buy them and now have an extensive wardrobe with a handful of items still with tags on, probably never to be worn. Too often I shopped on a whim, enjoying the rush from making new purchases without applying a practical mind as to whether I would really “get the wear from this!”
As an exercise-aholic I thought nothing of spending money on personal training, sporting clubs, gym membership, yoga classes, all of which amounted to an eye watering £300 a month! Now that I can no longer afford to sustain that lifestyle, I realise I am no less fitter (or fatter) than when I was paying through the nose for my health kicks and that there are loads of alternative ways to push yourself physically but thriftily.
The sad truth is that in today’s world we seem to feel that we are getting more if we pay for something and the more it costs, the more it must be worth having! This is all the more true in the world of finance in Jersey, where impressions count and you can get caught up in materialism if you allow yourself.
In the spirit of embracing self-improvement, it’s high time I started acting like an adult and managing my money a little better. Here’s what this last year has taught me about looking after my pennies:
Make a list of what you spend, seeing it laid out on paper is a sure dose of reality that can be quite shocking. Look at where savings can be made. Do you need to be paying for all those memberships? Create a savings plan and update it regularly in line with your fluctuating income and expenses. Have an idea of what your outgoings are and allow yourself a defined budget for luxuries.
You should still be allowed to spoil yourself, but make sure treats don’t become commonplace. We teach our kids the value of saving for something extra special and working hard for a goal, then it all goes out of the window when we grow up and have a high paid salary! Make treats a reward for achieving your goals; losing weight, running a 5k race or passing an exam. Experts recommend you should be setting aside 20-35% of your salary for the finer things in life.
There’s nothing like halving your income to force you to take a look at where savings could be made. I slashed my exercise budget, preferring to work out with friends for free who could give me the motivation I used to seek from a personal trainer. I stopped food shopping everyday at the supermarket, which saw me buying more than what I would go in there for. Making the most of items in the fridge and cupboard has dramatically cut our food bill. I’ve also gone car boot crazy for my son’s needs and would you believe it, just discovered the joys of selling second hand goods on social media!
There is an art to saving and in my case certainly, this does need to be re-learnt. Ludicrous as it sounds, only at 35 am I now educating myself about the value of money and the need to lay foundations for a financially secure future which mean planning for my son’s education, refurbishments at home, a pension plan and budgeting for unexpected emergencies. It’s so easy to lose touch with the value of money and quitting my job has proved to an invaluable exercise in that respect. How well do you really know your finances? Could you benefit from a lesson in managing your money more effectively?