“Now what…?”

Simonne on how to make sure your future's a dream ...not a nightmare.

We love hearing about how Sheconomics changes lives. An inspiring review on Amazon recently told how it transformed one business woman's life. She cleared her debts and felt huge excitement about being back in control financially. 

Often clients are in crisis when they call up Simonne at Wise Monkey. She helps them plan their ‘debt free day’ and says it’s positively exhilarating when that day arrives and they suddenly look out at the expansive horizon and new possibilities.

But then, frequently, the next question is where do I go from here?

A little financial planning could help you achieve your big dream.

In answer to this question, Simonne has three suggestions:

Step 1) Build a contingency fund
When money is no longer going into debt repayments it can be all too tempting to rush out and spend it. Start to build an emergency reserve now so you don't plunge back into debt. Enough to live off for three months is ideal, saved somewhere accessible (e.g. in a cash ISA).

Build this fund by arranging a monthly direct debit to go out soon after you get paid.Then the money is automatically saved each month, before you can get your hands on it and spend it.

Step 2) Take a long view
Next look to that horizon and see how your financial future looks.

If you have an employee’s pension scheme review it regularly, especially the contribution rate. Sometimes the employer will match contributions up to a maximum limit. Simonne found that clients who were paying 1% of their salary into a pension pot, and the employer likewise, could get matched funding up to 8%. So by finding that extra 7% (as little as 4.2% after tax for higher rate taxpayers), they could be putting 14% more into their future.

In fact Simonne found one client for whom an extra £60 per month would result in having £238 per month invested (counting in the added contributions from her employer and top-ups from tax/national insurance savings)! Fortunately all companies are being forced to pay into pension schemes for their staff over the next few years through auto-enrolment. So check this out if you’re eligible.

Some people reduce their contributions during an expensive period in life, like buying a house or having a baby, then simply forget to increase them again.

And self-employed people, under the current rules, have to finance more of their future for themselves. Many of the self-employed hope their business will be their pension, but that can be risky. Starting to make small amounts of savings, with the power of compound interest, can make a big difference.

Simonne says it’s all about having a strategy and not necessarily at any extra cost. With some careful strategic planning now you can make a massive difference to your financial future.

Step 3) Mind the gap

Most people's financial strategy is to drift along, put a bit of money aside when they can and hope for the best. But doing some simple maths could take your future planning a step further: 

A = Assess where you’ll be a a future date. Maybe the mortgage will be paid off and the kids might even be off your hands? Work out how much income you'll need per month in today’s terms.
B = Then simply check out what state pension you'll get, and any company pension. And add in any other income, or circumstances, such as a property downgrade for instance.
Calculate A – B and you've got your shortfall

Once you know your shortfall online pension calculators show you what you would need to be saving to generate enough to provide the income you identified at A.

Pensions are boring and the future's a long way off, right? 

If that's how you feel, think of it instead as a gift to your future self. 

‘Know tomorrow comes’ is the 7^th Law of Sheconomics. That needn’t be all doom and gloom. See it as a gift to the woman you’ll be in 10, 20,30 years time. Look after her, make sure she’s ok, and she’ll be immensely grateful to you. The steps you take now could dramatically effect whether her life is a dream .... or a nightmare.

What can be more exciting than knowing the dream life you want in the future ... and planning how to get there?

WOMEN BACKWARDS IN COMING FORWARD WHEN IT COMES TO MONEY MATTERS

Money Chat campaign reveals over nine million women in the UK are uncomfortable discussing money;

and 16 million women are concerned about making ends-meet, compared to just 12 million men

Despite being known as the chattier sex, it seems that when it comes to talking money, women are more reluctant to open up than their male counterparts. New research released today from the Money Advice Service, has found that nearly two-fifths (39%) of women, which equates to 9.5 million people, are uncomfortable discussing money, compared to just a third of men (33% or 7.7m).

Worryingly, the figures, gathered as part of the Service’s Money Chat campaign, which aims to get the UK to open up more about money, also show that women are more concerned about their money, with nearly a third (31%) saying they feel stressed about it, compared to just over a fifth (22%) of men. And that nearly two-thirds of women (65% or 15.8m) are concerned about making ends-meet, compared to just over half of men (53% or 12.4m).

·       For some women, their reluctance to talk about money in daily life is related to confidence - nearly a third (30%) say they don’t feel confident talking about money, compared to just under a quarter (24%) of men.

·       A third (33%) of women say they find it stressful talking about money, compared to just under a quarter (24%) of men.

It’s not just in conversation that this lack of confidence may be putting women at a disadvantage. Men are also more willing to seek help when needed, with nearly half (45%) (10.5m) saying that they would tell their partner or family straight away if they were struggling with debt, compared to just under two-fifths (38%) (9.2m) of women. Outside of the home, nearly three-fifths (57%) of men, compared to just over half (52%) of women say that they are comfortable telling a professional or expert money adviser how much they earn for a living.

The survey also indicates:

·       Women are still quite traditional when thinking about earnings, with a third (33%) saying that they would prefer that their partner earn more than they do.

·       For nearly a third (30%) of women, planning to move in with someone is the time to start wondering how much a prospective partner earns, while under a fifth (19%) of men think about it then.

·       In fact, nearly a third (32%) of men say that they would never think about how much a prospective partner earns, compared to just under a fifth (18%) of women.

I suppose traditionally, money matters have been viewed as male territory and this may be one of the reasons why men still feel more confident discussing it and seeking help when needed. However, money is a topic we should all feel comfortable broaching, whether you’re a traditional type or not. This not only applies in times of difficulty, but also in our daily lives. Feeling comfortable discussing money makes it easier to assess our own financial situation, and see whether there are ways we could be making it work better for us."

To illustrate the results and highlight the differences between men and women across the UK, the Money Advice Service has created an interactive Money Chat Map at: www.moneyadviceservice.org.uk/moneychat   

The Money Advice Service is an independent organisation, here to help everyone make the most of their money with free, practical advice. This autumn, it launched its Money Chat campaign to encourage everyone to open up more about money and break down the barriers that stop us seeking help. To get the conversation started, you can use its free online health check, which identifies a list of short and long-term money priorities in a personalised action plan. Try the health check now online at www.moneyadviceservice.org,uk.

Customers can also speak to a Money Adviser on the phone via 0300 500 5000, or arrange a face-to-face meeting in their local area (see below for further details).

Don't forget Sheconomics devotes a whole chapter to Sharing Financial Intimacies, helping you to get that money conversation started. You can also download our tip sheet about How To Talk To Your Partner About Money.

Where’s a safe haven for your money?

Simonne gives some wise advice about savings:

We all want to sleep soundly knowing our money's safe....

The world’s stock markets continue to take up too many column inches, and it’s difficult not to worry about how your investments will weather the financial storm. 

So where do you stash your cash when there’s such turmoil the world over?

Investing in stocks and shares still makes sense if you’re happy to put away your money for the long term – in financial speak, that means at least 5 years, preferably longer. One approach to reduce the risk is to drip your money in over a period of months, rather than investing a lump sum and hoping for the best. If you’re worried about the recent turmoil in stock markets, watch this episode of Meaningful Money, with Pete Matthews offering sound advice.

But what if you don’t want to tie up your money for that long? 

Or you’re looking for less risk? Savings accounts are one way to go, but with interest rates so low what other options are there? Here’s are some:

Fixed Interest Savings Accounts If you’re prepared to tie up your cash savings for a fixed term like three, four or five years, you’re likely to get better returns than from ordinary instant-access savings accounts. The Money Advice Service offers some guidelines about getting the most from your savings accounts.

Social Lending This is a peer-to-peer arrangement, so you’ll be lending to individuals rather than to conventional institutions such as banks. The aim is to get a better rate than you would with a bank, but with that comes extra risk. The companies that manage this type of lending are not currently regulated by the Financial Services Authority (FSA) and your capital isn’t protected by the Financial Services Compensation Scheme, as it would be with an authorised firm. But there are methods used to control and minimise the risk to lenders. So you’ll need to weigh up the chance of a higher rate of interest with the increased risk and lower protection. Popular social lending sites include Zopa, RateSetter and Quakle. The Consumers Association, Which?, has a good review of some of the main social lending sites.

Inflation-proofed savings National Savings Certificates used to provide a guaranteed, tax-free interest above inflation and were in great demand, but sadly the door closed to new business early last month. Since then we’ve seen a few banks/building societies offering something similar, including the Post Office. But these accounts aren’t backed by the government and interest earned above inflation is taxable. However, if you hold no more than £85,000 in any one banking institution, your savings are protected by the Financial Services Compensation Scheme. And they offer a fixed rate of interest above inflation. The accounts currently available tie up your money for a fixed term. A good review of the current selection of savings accounts linked to inflation can be found on SavvyWoman, Sarah Pennell’s, website.

Regular savings accounts If you can commit to save a fixed amount for a fixed term - usually 12 months - there are better rates around, as much as 8% a year, compared to say 3% in a high-interest account. Savings may be limited to £250 per month, though, and you might not be able to access to your money for the whole fixed term. Moneysupermarket is one of a number of comparison sites, which help you weigh up different regular savings accounts currently on the market.

If you’ve got a lump sum of cash to deposit, you could make use of a regular savings account. Run one alongside a high interest savings account, making a monthly transfer from the high interest account to regular savings account, which should increase your overall return.

Structured products have increased in popularity since the credit crunch. They’re usually promoted as a safe way of investing money where you benefit from the upside of the stock market without risking the downside. Typically, your money is tied up for five or six years. At maturity, you get a proportion of the stock market return over that term, and your money back if the stock market has fallen. But be careful, and take time to read the small print. The ‘capital guarantee’ (the getting your money back bit) usually applies only if the market hasn’t fallen below a certain level. This means that if markets fall dramatically, you could lose a big chunk of your original investment. The product may also be backed by different organisations and if the sponsor goes bust, you could lose all your money. Moneyweek’s video warns about their risks.

If you want more advice on savings and some financial coaching, see Simonne's website.

I don't wanna talk about it...

“It’s the one topic we can’t bring ourselves to talk about” I heard Jenny say on Woman’s Hour last week. She was talking about incontinence. I won’t say more here – this isn’t weeconomics – but it reminded me of that other big taboo: money.

Did someone mention the M word?

Women aren’t as comfortable talking about their earnings as men, according to new research from the Money Advice Service. But neither sex is too fond of shouting their salary from the roof-tops. Just 5% of women and 10% of men would tell a stranger how much they earn.

We have our hush-hush places too – one in four of us feel it’s wrong to discuss money at the hairdressers (where we'll share every other intimate detail of our personal life), others wouldn’t bring it up at a party or down the pub with friends (28%).

As I've said in earlier posts, it really is time we tackled this taboo. Why? Because money secrets wreck marriages and make people downright miserable. And money problems and mental health problems seem to go hand-in-hand.  According to the Royal College of Psychiatrists:
 - One in two people with debts has a mental health problem.
 - One in four adults with mental health problems is in debt.
And being in a financial mess can make you feel:

• As if everything is out of control and there's nothing you, or anyone else, can do about it.
• Hopeless, especially if you have debts that are growing.
• Embarrassed to talk to anyone about your financial situation.
• Guilty - that the problem is your fault, even if it's due to mental or physical health problems.
• Anxious and depressed.

Talking about money problems is the first step to sorting them out. Our friends over at the Money Advice Service are running a Money Chat campaign. They want to break down the big taboo and get people talking more about money*.

They even have this fab Money chat map so you can view the regional figures

So, if you have been keeping mum about money, maybe we can help you open up?

Check out the downloads section of our Sheconomics website for useful tip sheets.

Tip sheet no 5 is about How to Talk to Your Partner about Money and Tip sheet no 6 is How to own up to a Money Problem.

Plus in Sheconomics we devote a whole chapter (Share Financial Intimacies) to tackling the great taboo. The money taboo that is. Sorry - we can’t help with incontinence, although you may be able to catch the programme again.

*The Money Advice Service has Money Advisers available on the phone or face-to-face. To help get the conversation started, there’s a personal action plan produced by their free online health check, which identifies a list of short and long-term money priorities. Available online at moneyadviceservice.org.uk and on the phone via 0300 500 5000

Have you got a money mate?

According to new research only a fifth of us have someone we can talk to about money.

There are times when we all find it reassuring to talk over our concerns in life - from careers to relationships, but when it comes to money matters, it seems many of us don’t have anyone to confide in. Results from a new survey by the Money Advice Service reveal that 76% of us admit to feeling generally happy about life when we feel good about our money, yet only 19% of us say we have someone who we trust to confide in about our money situation.

It's time we talked about money folks!

Today, the independent Money Advice Service launches the Money Chat campaign and 

we're right behind their aim to get the UK talking about money. 

The campaign will run from now until the autumn, offering free tips and tools to help people get their conversations started – online, over the phone, or face-to-face.

To launch the campaign the Money Advice Service surveyed over 2,000 adults to find out how the UK population feels about money matters.

Their results, published today, highlight that while money can’t necessarily buy us happiness feeling on top of it really can.  Having financial control gives us a positive boost that helps us cope better with other aspects of life, for example:

· 44% of us feel more in control of our lives overall when we feel in control of our money 

· 33% of us feel more confident when our finances are in order

· 37% of us can get on better with other aspects of our lives when our finances are in order

It's good to know you're not alone...

Being able to talk about money is key to getting on top of financial matters. 

In Sheconomics we have a whole chapter called Share Financial Intimacies in which we show you how to understand each other's money mindset, start a money conversation and even achieve joint account harmony (yes, it can be done!).

You can even download a tip sheet on How to talk to your partner about money.

The Money Advice Service’s free unbiased money advice is available nationwide - online at moneyadviceservice.org.uk and on the phone via 0300 500 5000. 

So - what are you waiting for? Go and have a money chat with someone today.

New money advice service launched

Are you one of the many women who, when it  comes to asking for advice about money, has no idea where to go? The friendly bank manager is now a distant memory and even friends you trust can offer nothing but financial horror stories.

Or perhaps you’re scared about approaching organisations who offer ‘advice’ for fear you’ll get sold something you don’t want, or get charged for advice?

We’d like to allay those worries and point you to a safe pair of hands.

The Money Advice Service.

It’s the government advice service (formally the Consumer Financial Education Body) launched today that really does offer free, impartial money advice. 

We think it's a friendly site that's easy to browse without getting tripped up by horrid jargon. Perhaps it's the green colour scheme and homely images that makes it particularly relaxing and non-threatening? And there are free printed guides on offer, as well as face-to-face services and a free helpline (0300 500 5000).

A big plus is that it's very female friendly, with great sections on childcare, finance for parents, and help with those less-than-happy events like divorce and redundancy.

We particularly like the way they acknowledge that seeking financial advice isn't just a fact-finding exercise, and that money induces a lot of anxiety in people. There's a section headed 'Money Worries' especially for those wobbly times.

Check out www.moneyadviceservice.org.uk