You know when you haven’t exercised for ages and you have the little voice in your head saying “you really should go for a run”, or whatever your run equivalent is. You try to ignore it, you make up some excuses as to why now isn’t the right time, and then you eventually just get on with it and it isn’t as bad as you expected?
That’s what I’ve had for the last couple of months about my money. No, just because I talk about money and share tips and tricks for being savvy with money, doesn’t mean I have my sh!t together with my own personal finance - it does still fill me with a bit of dread. Particularly at the moment… it hasn’t been a cheap 6 months: 5 weeks off work, buying a flat, unexpected tax bill and the dog, it all adds up.
I bit the bullet and told instagram I was arranging a money date with myself and for some reason that did the trick! I just got on with it and here’s what I did…
I have never been one for saving for saving’s sake. You have to save for something or else, what’s the point? It shouldn’t be hard to think of expensive things to buy in future, but I was genuinely scratching my head. The obvious one is a house but I bought a flat last year and I really don’t plan on going through that again any time soon. I don’t have expensive taste (although I’m sure a certain boyfriend wouldn’t complain if my big saving goal was a sports car). Spoiler alert (for him) it isn’t!
Right on queue, facebook popped up with a memory “this time 3 years ago - you were living the dream in South America on a sabbatical with two of your best friends exploring, smiling and enjoying incredible experiences, unlike now where you are trapped in your house, working from home, in the middle of a global pandemic”. Cheers Facebook!
It got me thinking. My dream doesn’t exist in a physical form. It isn’t a material item that I can see today. My dream is freedom, flexibility and choice. In 5 years I want to know that I can afford myself options. That might be the option to pack my bags and head off travelling again (anyone free for some dog sitting?). Or a break from full time employment to do my own thing. It could even be buying a sports car (it won’t be, sorry Jack).
The idea of freedom is exciting to me. Exciting enough that I am committing my bonus (after I’ve paid my painful tax bill) and 10% of my monthly income to it.
That makes my breakdown:
Now the fun starts. By fun, I mean boring technical stuff but it’s worth persevering. If you’d prefer to see this in video form then tadaaaaa here you go.
Short term savings
Why cash? This is an emergency fund for emergencies. I don’t know when I might need it so I want to know I can access it quickly and easily.
Why Virgin Money? I tend to switch current accounts and savings accounts every couple of years. I was using Halifax then this weekend a message popped up saying “your interest rate is going from 0.5% to 0.01%”. Irrespective of the financial impact, I am moving on principle. It annoys me that you get sucked in with a juicy(ish) rate then they thank you for your loyalty by cutting your interest rate to zero. Well, f*** you too!! I was straight onto Money Saving Expert to find the best option. As always there are banks coaxing me in with hard cash or, in the case of Virgin Money, £135 of wine (they know the key to my heart) and £50 charity donation. Bolted on was a juicy offer of 2% interest on my balance up to £1,000 and 0.5% (dropping to 0.35%) on a savings account. I wonder how long that will last...
Medium term savings - i.e. my big dream
Why Stocks & Shares ISA? I’ve got a house and a pension so the Lifetime ISA isn’t right for me. The next best option to grow my cash whilst fiercely protecting it from Mr Tax Man is the S&S ISA. I won’t go into it now but everything you need to know about why you should start investing is here.
Why AJ Bell? Ok, this is my BIG NEWS. I have been a Hargeaves Landsdown S&S ISA customer for years - chosen because I didn’t know there were other options at the time. This year I wanted to really challenge whether they were the right provider for me.
Long long term savings i.e. my pension
Not much to say about this. My company uses Aegon as the pension provider. On my to do list is to look into consolidating my old pension with my new one but I’ll leave that for another day.
Why have a separate bills account? Maybe this is obvious but I’ve only just started doing it. It just helps clear up what’s spending money and what’s not. I have some big bills (service charge, ergh) that come out every 6 months so I just put all my bills money in a different account each month to keep it separate.
Why Virgin Money? I think I pretty much covered this under why I chose them for the cash savings account. Wine… wine wine wine wine wine. Oh and a high interest rate. There are accounts out there that give you cash back on your bills (Santander being the main one) but you have to pay £2 a month for that account and after some maths I worked out the cash back would be LESS than the monthly cost, which is no fun at all.
Why Yolt? I’ve always loved Yolt’s spending aggregator to see how I am spending my money across all accounts (see our Truth Bomb on Yolt here). They now offer a debit card and auto saving hacks like round ups (like Monzo). I just felt this was an area I could simplify my complicated money map and just move my spending account from Monzo to Yolt. I will be sad to say goodbye to the hot coral card though…
AND THAT’S A WRAP on my 2021 money map! I’m looking forward to checking back in this time next year. In the meantime, let’s keep talking money!