Masterclass: How to be brilliant with money with Lisa Conway-Hughes
A BIT ABOUT ME
I’m a chartered advisor and also a fellow of the Personal Finance Society. Not many people are (less than three per cent of advisors), and I got my fellowship aged 30, which is very young. My publisher would also like me to tell you I have a high IQ!
HAVE A PLAN
Most people don’t think about money or what they want. Then, all of a sudden, they’re retiring. You need to have a plan, albeit a flexible one. Know when you’d like to buy a house, how much it will cost, what compromises you’ll make, when you’ll retire, what kind of life you’d like to live and what it all costs. People complain about not being able to afford it, but with a little planning you’ll make some big changes that mean you can.
There isn’t a financial magic wand. So many people think, “well I don’t have much, so what’s the point trying to save?”. But the point is to start and every time you get a pay rise, add more. You get addicted to it; start spending a little less, and saving more. Once you’ve worked out what you want, you work out where you are. The difference isn’t actually that horrendous. You’ve still got years to sort your money; just start doing something about it.
GOOD TO TALK
You need to get into the habit of talking to friends and family about money so it becomes less of a taboo. For example, why have we only just found out women in the BBC are earning considerably less than men? Because it suited the paymasters, I suppose. It feels odd that we were in 2018 and we found out that women were earning so much less; that should have happened in 1919.
TAKE THE HIT
Goals are either pain-free but will take forever, or short, sharp and painful. When I bought my first flat
I had all sorts of jobs. I made pizzas, and on Fridays, Saturdays and Sundays I worked in a bar. If you’ve worked out your goal is so important you’re willing to make sacrifices, then you should. It won’t be forever.
Get the most out of your employer. Negotiate hard (and regularly) on your wage, and get the maximum
for your pension. This contribution can also be negotiated, because while an employer might not be willing to give you a couple of grand in your pay packet, they might be willing to give you an extra percentage in your pension pot.
Money Lessons by Lisa Conway-Hughes is out on 25 April (£12.99, Penguin Life)
3 TIPS TO SAVE FOR A HOUSE
Know the real cost, things like stamp duty and solicitor’s fees: all the real costs of moving
Speak to an independent mortgage broker as soon as possible to work out how much you can borrow
If possible, think ahead. Move out a little to get more for your money so you’re future-proofing. If you’re planning to start a family, make sure you chose somewhere you could live in the next stage of your life, not just the one you’re in