Financial New Year Resolutions – starting 2017 on the right foot

For this important topic we were excited to have both Claer Barrett, the FT’s award-winning personal finance editor, and Emilie Ballat, the founder and CEO of Vestpod, an exciting start up designed to help women get smart about money, to lead a full and frank discussion. We were thrilled with the value of the advice offered by Claer and Emilie, and the quality of the questions afterwards. As one of our members said afterwards, who knew finance and investment advice could be so interesting!

We always pick the top 10 lessons we learn from an event, but this time we had pages of the stuff! With much difficulty we whittled it down:

  1. Women are statistically not as good at managing their finances as men, but changing this bias will be increasingly important – by 2028 women will inherit two thirds of the world’s wealth
  2. “Expenditure rises to meet income” – be warned! Commit to putting time aside to manage this on a regular basis, looking at this once a year isn’t sufficient.
  3. A good rule of thumb is to spend 50% of your salary on fixed expenses, invest 20% of it, and leave 30% for additional spending (the fun stuff). Look at new challenger banks such as Monzo who provide a brilliant interface to show you how you’re spending your money
  4. Save! Even if it’s small, the benefits of compound investment will start to benefit you. Look at investment or Lifetime ISAs. Women are over invested in cash ISAs which offer very low returns
  5. Additional income can be put to overpaying your mortgage to reduce future mortgage repayments (although in this interest environment that may not be the best use of cash), or go and talk to your HR teams about over investing in your pension – a highly tax efficient way of saving for your future.
  6. Ask for pay rises – while women ask just as much, we don’t have as much confidence we’ll get it. Don’t expect to be recognised and paid more by osmosis, you need to regularly communicate the value you add to your company. Don’t just wait until your pay review to do this.
  7. Passive investment funds are more often a better investment than active investment funds.
  8. If you want to invest in individual shares, make sure it’s money you can afford to lose. It is a gamble.
  9. If you need to manage down credit card debt, move the debt to a zero interest credit card. Divide the balance by the number of zero-interest months offered, and set up a direct debit to pay this much each month. Then cut up the credit card until you’ve paid it off.
  10. Pension or mortgage – ideally both. You shouldn’t look to sacrifice one for another

And remember, April is just round the corner so you should be reviewing your Finances and particularly ISAs now before the end of the tax year. Go forth and manage those finances!

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