This valentine’s fall in love with your finances
We are never short of ‘days’ for spending money. It was long decided that we needed a special day to celebrate ‘love’. It is a lucrative market after all. If you are generally blessed by cupid on this day, then I am happy for you. Truly am. For you, this might be a good time to sense check how you are doing trying to show ‘love’ (which seemingly is best felt by the heart, so I heard!).
Return on investment from cupid related businesses are notoriously lower for consumers and higher for corporates. Make sure, your financial condition is suited for that purpose. And for the rest of us, who may prefer to keep it subtle: take my two cents and this valentine’s choose to fall in love with your finances.
No heartbreaks. No downside. No broken promises. How?
1. Marry that budget!
OK, it seems I have jumped straight to marriage. But when it comes to finances, make that relationship official ASAP! Allow yourself enough time (with amble breathing space) to design a budget that works for you. A budget should be something you absolutely love to stick to. And unlike humans, best part about promising to stick to your budget is that, when times are tough, it is OK if you cannot.
Make your budget flexible by building up sinking funds and looking out for higher future expenses. And please don’t put yourself down on days when you slip. There are plenty of people out there waiting to do just that. Be kind.
2. Put your future self first
This one especially goes for your present self. You put your future self first by being a long-term investor. Use the time and money you have now to accumulate a healthy pot of investment assets. This is so that your future self does not have to worry when the time & age is no longer one of your best attributes. Quick check: Are you paying into a pension? Do you have a personal investment account? (ISA in the UK).
When that monthly income hits your bank account before anything else happens to that money –put it away in your savings or an investment account. Forget that it even existed. Like your ex.
3. Feed your brain for success
Nutritious food is good for our health. And educational books are good for our brain. Just the way you may enjoy flexing that muscle, flex that brain too. Trust me, it can flex more than you give yourself credit for.
It doesn’t even have to be books to be honest. Everyone learns differently. You can learn by watching, listening, or even talking to people!
Little self-promotion, have you checked out my YouTube channel?
4. Set regular “money dates”
Dating your finances is important. More consistently you date, the better. I would suggest once a month is a good frequency. You don’t want to overdo it. Even your finances need some breathing space. Find a re-occurring time in the diary, ideally over the first few days of the month to track how your relationship is going with that budget you married. Make sure the setting is fit for purpose.
A quiet space, a hot cup of coffee and maybe some instrumental music in the background. Also use this time to plan for medium to longer term goals. Are you planning to buy a house? Do you want your investment account to reach £100k in 5 years’ time? Anything really.
Make sure, your other half, I mean your finances is OK with that. You don’t want to set an unrealistic goal which can make your finance fall out of love with you.
5. Move on from debt
Yes, a tough one. Like exes, some debts just don’t want to go away, especially the ones with extremely high interest (rates). If you are struggling with debt, it could be worthwhile to think about how you can permanently move on from it.
In one of my previous posts, I talk (rather emotionally) about debt, mental health & strategies to come out of it.
6. Priorities your health
I mean both physical and mental. It’s game over if you can no longer think or function properly. While physical health issues are easier to notice, mental health can lurk behind for a while without you realising it. And before you know it, it’s reining over your beautiful world. Touchbase with your self to make sure you are doing OK. If you are not, talk to someone. There is always someone out there who is ready to listen. Here are few useful links to mental health charities that you may wish to check out if in need:
7. Give back
If possible, give back generously for a cause you care about. Don’t limit this to just charities. Look out for family and friends around you, who might need a little help. While a £100 might not mean a lot to you, it could mean a lot to a struggling family trying to pay the bills or bring food on the table.
There is something truly magical about giving back. If you can do this selflessly (without expecting anything in return), you will experience true love. You know the one that cannot be seen, but only felt by the heart? Yes, that one.
8. Treat yourself to some company
Once a while (or maybe more), when you feel lonely, why not buy some stocks, and shares to get some company? Love the pun? Me too. While investing in funds (both active and index) are one of the best ways to invest and grow your money, it can be quite exciting to buy single stocks. Single stocks and shares are far riskier than funds, but they also give potentially higher returns. There is no harm in educating yourself about basics of stock investing and explore the fascinating world of the stock market!
For example, I use Trading 212 for my regular stock investing (as they don’t charge on trades). When you feel comfortable to invest in stocks, you can use this link to open an account with them and get a free share worth up to £100.
9. Attract positive real rates
There is absolutely no sign of interest rates increasing anytime soon. While this is good for mortgages and loans, it is not so great for your bank’s savings account. Especially with inflation around the corner, it has become ever so important to keep it real and keep it positive.
Here’s a cheeky side note:
Real interest rate = Nominal interest rate minus inflation
The interest rate you get (or see) on your bank’s savings account is the nominal rate. However, as savvy person who is in love with their finances, always focus on the real interest rates. You get this by taking away inflation (increase in general prices in the economy) from the nominal rate.
In the UK, BoE targets inflation at 2%. Therefore, if your bank is only paying you 0.1% on your savings you are essentially losing true value of your money by 1.9% every year!
A true buzz killer.
10. Enjoy frugal activities
This comes back to the first point I made right at the beginning, about not overdoing it. Don’t fall into the trap of commercialising love. Sure, a romantic card is a great way to express how you feel, but does it really have to follow with a lavish materialistic “thing”? I’ll come clean, I’m not very frugal generally. I enjoy spending money on experiences, eating out and buying gifts for others. But I also enjoy going for a walk with my husband (ah! all these times you thought I was a self-loathing single lady with 50 cats….), playing board games, watching movies, and planning for our future holiday experiences.
The summary
No summary for this post. I’ll stop here.
By now, I think I may have ruined your valentine’s. Please note: I cannot be held liable for any human level breakups.
Thanks for reading though, subscribe for more?
*The link to opening an account with Trading 212 includes my referral code. If you open an account with them we will both get a free share worth up to £100