How I organise my money
Even though parents told us to “mind your own”, let’s face it, most of us are fascinated by other people's finances. And cards on the table, I don’t think we should feel guilty about it.
How are we supposed to make better financial decisions or understand our worth if we hold up a vow of silence on anything with a pound sign in front of it? Money secrecy sucks, and in my opinion it holds most of us back while benefiting very few.
Since working for Multiply I’ve learnt a lot about finance and it’s definitely made me more conscious of how I manage my money. So I thought I’d share with you how I run things, as a small crusade against money secrecy.
To set the scene a bit, I’m 26 and I live with my partner in a two-bedroom rented flat in Dalston, London. We’re getting married in October so that’s been our major savings goal. We’re not particularly bothered about buying a house right now and even if we were there’s no way we’d be able to buy in the area we live, so homeownership has been pushed back a few years. Neither of us have any debt (outside of student loan) but we do use 0% credit cards for larger purchases from time-to-time (flights, furniture etc).
Each month I split my salary into three (pretty much equal) parts, a third on my half of rent, bills and essentials, a third into savings and investments and a third for “living” aka gym membership, Urban Outfitters orders and nights out.
Our rent and bills are unsurprisingly expensive but to be honest the convenience of living a seven minute cycle from work makes up for it - I'll let you Google the average rent in Dalston rather than shamefully admit it here. We usually spend about £40-50 a week on the food shop which covers toiletries and cleaning supplies too. Bills combined are about £50 a month and the only other shared essential expense is new stuff for the flat.
“Savings and investments”
Let’s start with my pension. I won't try to dress this up as anything other than a shameless plug, but go and use the Multiply pension calculator. I’d bet most people reading this aren’t contributing enough and the calculator is a wicked way to work out what you should be putting aside. I recently increased my contribution to around 10% of my salary, but that might not be best for everyone. What you need to contribute will vary based on your age, the size of any existing pensions, the age you want to retire and the income you think you’ll need.
We’ve just reached our savings goal for the wedding but I’ve decided to keep up my monthly contributions even though we’re not aiming for anything specific. I set up a direct debit to a cash ISA so I don’t really miss the money because it’s only ever in my current account for about 24 hours. On top of savings I put a small amount into a Stocks and Shares ISA each month. I don't have a huge appetite for risk but I also felt conscious about protecting my money from inflation, so figured a small amount each month is good to get started with.
So the biggest of big money tips is move your essentials and your savings out your account before you start spending on the sexy stuff. When you stop looking at your entire take home salary as disposable, you’re on a home run. Even if you need to dip into savings for the first few months, getting the money out of sight and out of mind actually gives you the freedom to spend without guilt with what's left.
So there’s a whistle-stop tour of my money, if you’d like to share yours and help start the conversation on money, drop me an email on firstname.lastname@example.org.