Financial new year resolutions; starting 2018 on the right foot

WeWork Paddington, London. January 10th 2017

We realised this year that we’re not the only ones scrambling to work out what we’re supposed to have done with our ISA allowance and our upcoming tax filing, and for the 10th year in a row declaring ‘managing my finances better!’ as our new years resolution. So we re-hosted our fantastic speakers from last year for round 2, Claer Barrett from the FT and Emilie Bellet the founder of Vestpod, an exciting start up designed to help women get smart about money, to help us think about our finances for 2018.

Our top 10 lessons:

  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 don’t worry. We’ll be back again next year if you don’t manage to meet all your goals!

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