December 18, 2024 • 18 mins
Step into the new year armed with pearls of financial wisdom from A Little Bit Richer!
In this special episode, our host Kia Commodore goes through the archives to share her top ten favourite money tips from the series so far. From building financial discipline to smart investing, tackling debt and planning for your dream retirement, this episode is packed with actionable advice from some of the most insightful guests we've had on the show, including Orann Coyle, Timi Merriman-Johnson, Kim Brown, Emilie Bellet and many more.
Start 2025 strong and take control of your financial future. Whether you're navigating the property market, or exploring pensions and ISAs, there are plenty of ways to help make you a little bit richer!
You can play the podcast and find other useful content on Legal & General’s website:
www.legalandgeneral.com/podcasts/a-little-bit-richer
Kia and her guests share their own personal thoughts and opinions in this podcast. These might be different from Legal & General’s take on things. They give financial guidance for a UK audience that’s relevant at the time of recording. It’s general best practice, not the kind of personalised advice you’d get from a financial adviser.
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Episode Transcript
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Kia (00:02):
Hey, it's Kia. Welcome to another episode of A Little
Bit Richer, brought to you by my friends at Legal & General.
There have been so many nuggets of financial wisdom on
this show, too many to count, but I've been going
back through the archives and have handpicked 10 of my
favorite money tips from all of our episodes so far,
to send you into the next year as a financial
whiz that I know you are. So let's dive in.
(00:24):
Number one, first up is the toughie but a goodie.
Iain Russell from Money Hub talked to me about the
importance of financial discipline, and how not to lose sight
of your goals. Even though it could be hard, it's
worth it in the end.
Iain Russel (00:35):
So number one I say is, maintain that financial discipline.
Just take a second when you're thinking about purchases. Is
it definitely what you need? If it's new clothes, are you
going to wear it enough to justify the price? Would
you potentially visualize that money? Would you prefer it to
be in one of your savings accounts or knocking off
(00:56):
a bit more of your credit card? So it really
all adds up. So just taking that little bit of
time to just have a think before you spend. Number
two is living below your means. So again, we're going
back to looking at your spending habits. Look to make
those choices that prioritize the long term financial goals and
give you that ability to top up your emergency fund
(01:17):
and save for the future. And finally, start early. So
new year is perfect.
Kia (01:22):
Good time.
Iain Russel (01:23):
It might be cliche, but it really is the perfect time
to build those savings, pay off debt, pop some more
money into your pension, because the earlier that you start
to do that, the better you feel. And like I
said before, even if it's just 10 pounds a month
or it could be up to 100 pounds a month,
it really doesn't matter, it's building that habit, and the
earlier you start that, the better.
Kia (01:45):
Number two, before you do any kind of investing, it's
imperative you save towards an emergency fund that will look
after any unexpected short- term costs that might pop up.
No one could put it better than Mr. Money Jar himself.
Timi Merriman- Johnson.
Timi Merriman-Johnson (01:58):
The other thing to look at is, so we said
investing is a long- term form of saving, but short-
term savings are important too. And so the very first place
to start is your emergency fund. So the way to
think about your emergency fund is, if you were to
lose your primary source of income, or an emergency was
to happen, do you have enough money to get yourself
(02:21):
through that without having to rely upon debt? Saving an
emergency fund before you invest means that, should your investments
fluctuate in value, which they will do from time to time,
you have a pot in cash that you can draw upon.
The other thing to look at is things you'd like
to do or have in the next year or two.
As we said, investing's for the long term. We tend to think of
it in terms of years and decades rather than in
(02:42):
weeks or months. So if you're looking at the next
one to two years and you have things that you'd like to do
or have, this could be buying Christmas presents, going on holiday,
saving for a house deposit will be a big financial
milestone for a lot of people. Making sure that you're
saving towards those goals as well is very important. Then
anything over and above that can go into investments. That's
money that you don't need today and that's going to
(03:04):
work for you going forwards. And if you find the
concept of an emergency fund tricky to visualize, think of
it in the same way as an overdraft. So of an overdraft,
that's almost like the basement of your bank accounts. Your
bank account goes to zero, and then you have the overdraft.
An emergency fund is simply an overdraft that you fund yourself.
That's all an emergency fund is. So if you need
(03:25):
that cash, you're not going for a loan, you're not
reaching for the credit card.
Kia (03:29):
You're going for your own savings.
Timi Merriman-Johnson (03:29):
You have that money, you're putting yourself through that situation yourself.
Kia (03:31):
I love that. I love that. Number three, consumer debt can have
a massive impact on our finances, and financial advisor Orann
Coyle had some great advice around this and what to
avoid doing.
Orann Coyle (03:42):
Consumer debt is a killer of people's finances, and it's
something that can really badly affect your finances in the
long run. When you make naive decisions when you're young,
I'm talking about credit cards, leasing vehicles, personal loans, payday loans, overdrafts,
anything that has a high degree of interest that once
you get into it's going to be difficult to get
out of. And a real- world example at the moment
(04:03):
is buy now, pay later. And so that is a massive,
massive impacting thing on your finances in the long run,
because if you are not able to service those debts,
or you get caught in that trap, in the long term,
that affects your ability to buy a home, your credit
be affected, it could affect your relationships, because money is a
massive part of personal relationships. And so my opinion is,
(04:25):
you have to be very conscious of your spending when
you're young. And leading back to when people should seek
out information in their 20s and 30s, that's why you should, because
you need to make sure that the bad decisions are
signposted so that you can try and avoid them as
best as possible. So things like high- interest vehicles, there
is no need for that. So trying to avoid those
things can make a big difference. And obviously just overspending
(04:47):
and frivolously spending money. In reality, the first thing that
you should be thinking about is, " I need to get
a rainy- day fund behind me so that I know
I'm safe." And yeah, if you spend some money, that's okay,
you have to love your life, but you have to
always be aware, " Do I have a cushion to fall
back on if things don't play out the way I
wanted them to play out?" And that's really important, and
that's the foundation of a conversation I have with anyone.
Kia (05:09):
Number four, if you know me, you know how much
I love talking about pensions. Legal & General's Kim Brown and
I went deep on workplace pensions, and she has some
inspiring advice on what you want your dream retirement to
look like.
Kim Brown (05:20):
But the amount that you should be contributing is based
on you. It's based on what's affordable, but it's also
based on when you want to retire and what that
retirement looks like. So my best advice would be to
use some of the tools available to help you plan.
There's some brilliant free resource if you go onto Money Helper,
they've got a retirement planner, you can put in details
(05:41):
about what you earn, when you want to retire, as
I say, and they will show you your projected income
at retirement. But they've also got good sliders that you
can adjust, " What happens if I paid more? What happens
if I retired later?" Companies like ours, like Legal & General,
will have similar things, retirement planner tools, so get on
one of those free tools through your pension provider or
(06:01):
generally available and just look and think about it. And
your point on younger savers is so true, save as
much as you can as early as you can, because
that money has a really long amount of time to
work for you.
Kia (06:13):
Amazing. I think that's really important, like you said, and
I'm not too far away. So 30 is, it's approaching
for me, it's coming. Is there a certain amount that
people like myself, around that age, should aim to have
in their pension pot?
Kim Brown (06:28):
I thought you were saying you're not that far away
from retirement, I thought-
Kia (06:33):
No, gosh, no. Gosh, no.
Kim Brown (06:33):
Not quite.
Kia (06:33):
Not quite.
Kim Brown (06:34):
Not too far away from 30. Okay. I think it's worth looking at, and thinking now,
but I would just regularly review it. So I think
what can be really important is when you get a
pay increase, before you get used to that money in
your pocket, log back onto one of those planners, think
about the difference it could make over the longer term
if you invest. Same is true if you get a bonus,
it's a really tax- efficient way of using your bonus money.
(06:57):
And again, before it goes in your pocket, think about
retirement you and what that could mean then.
Kia (07:02):
That's good. I'm going to, I think I've said this before, pina colada
on the beach, I'm going to have that in mind
when I come thinking about my pensions. That's really good. Number five,
when it comes to paying pensions, there are many gaps
between men and women. Emilie Bellet, host of The Wallet,
came on to share what women need to know about money,
and had lots of practical ways women can manage their
money and build their wealth.
Emilie Bellet (07:23):
When we think about money, finances, investing, that can be
quite scary and overwhelming and you don't know where to start.
So it's just trying to start with the basics, and often,
when we run our courses and boot camps, we try
to have these conversations about money. There's still such a
big taboo around money because they have this lack of
education and money being this thing where it's quite, I mean,
(07:43):
I've always been taught that it's quite impolite to talk
about money, that girls shouldn't talk about money. When you
look at the statistics, girls actually receive 20% less pocket
money than boys. So I think doing a little bit
of work on your money mindset by having a conversation,
trying to write your money story, maybe seeing a money
coach also. Financial advisors can also help you, but really doing
the work for yourself. And then it's organizing your finances,
(08:06):
not being worried about checking your bank account. And I
know that's quite scary for people who never look at
their finances, but on the morning, try to check your
bank account once a day, you'll feel empowered, you know
exactly how much you have. And the same is going
to go for debts, trying to understand how much debt
do you have, how much savings do you have, and try
to understand your basic numbers. So having a little spending plan,
(08:28):
trying to check for the past months or for the
past three months, how have you been spending your money?
So this is the first part. And then thinking more
broadly about wealth, we all should think about wealth. And
of course here we're talking financial wealth, but knowing a
few numbers. So maybe trying to calculate your net worth,
which is the sum of all your assets, minus the
sum of your liabilities. If you are quite early in your working
(08:50):
life and if you have a lot of student debt, you will have
a negative net worth, but that's okay. It's just a matter
of improving this number over time and knowing your numbers,
knowing how much savings you have. So really knowing these numbers,
also your credit score, and writing them down, and having
maybe a little date with yourself and your money once
a month, and I'm sure you talk about that also
(09:11):
with your friends and communities and on your podcast, but
it's having this regular catch- up with money I think
is really helpful, and not judging yourself, really detaching your self-
worth from these numbers. They don't define you. The amount
of money you earn, the amount of debt you have,
they're not your personality, so trying to separate the two
I think is quite important. But be very realistic about
(09:33):
how much money you have, how much money you don't have,
and what are your goals going forward.
Kia (09:39):
Number six, we all love living in the moment, but Legal & General's,
Karen O'Byrne really taught me the importance of protecting your
future just in case the unexpected happens.
Koren Byrne (09:49):
Just because you're not having children and you're not getting
married doesn't mean that you shouldn't have any protection insurance
in place. I am my sole dependent, and if I
can't work or something unexpected happens to me, there are
still bills that need to be paid and I'm the
one that's responsible for them. So critical illness, income protection,
(10:10):
life insurance, explore them, read up on them, have conversations
about them, and just see if they're right for you.
And you can also have access to things like well-
being benefits, private diagnostics, counseling, private GPs, and these are
the services that you can access right now, which again
saves you money. So there are benefits to having these
(10:31):
products now, not just looking into the future as well.
I'm definitely of that generation of millennial that's very much YOLO.
I've just really aged myself there in saying that. I know,
I'm definitely not Gen Z. However, I think it's a
really great attitude to have sometimes, but don't do it
at the cost of your financial security for now and
(10:52):
in the future. By all means, enjoy life. Enjoy the
choices that you've made, enjoy the family that you've built,
whether that's you and your cat or you, two dogs,
three goldfish and a hamster, or whether that's you married
with children, don't put things off waiting to do other things.
So just be really mindful and don't disengage from your
(11:14):
finances just because you're enjoying your disposable income.
Kia (11:20):
Number seven, getting to know the benefits of ISAs and making
the most of them is really important to building a
personal wealth Legal & General's Fahad Ahmed explained all about stocks
and shares ISAs and how you can make them work for you.
Fahad Ahmed (11:32):
So first of all, you've got that tax- free element
that we spoke about. So any money that you make
through gains on the stock market, you don't have to
worry about paying tax on it. The good thing about
stocks and shares ISAs is that if you invest for
the long term, and we're talking about over five years,
you can generally expect to see better returns than what
you would see if you just left your money in let's
say your current account, or even a cash ISA. So
(11:54):
that's another thing that's really good. I do need to
stress though that with stocks and shares, ISAs, it's an investment. And
when we're talking about investing, it's all about the long term.
It's all about that minimum five years. That's the key
number to remember. But the longer you leave your money invested,
the more chance there is that you'll actually see positive returns.
As I said though, it's an investment, so your money,
it will go up and down, and you could actually
(12:14):
get back less than you put in. So if it's okay,
I could just touch on those different options for how
you can invest in a stocks and shares ISA. So
there's two main options. The first one is what we'd
call a DIY approach. So this is where you pick your
own investments. You can pick things like corporate bonds, government bonds,
unit trusts. You can even go as far as to
pick your own individual company shares. And for me, that's
(12:37):
what seemed a little bit daunting.
Kia (12:38):
It's very hands- on, isn't it?
Fahad Ahmed (12:39):
Exactly, exactly. So for me, it is not really the one. What
I like is the second option, which we call managed portfolios. Now,
with a managed portfolio, you can take a step back,
you invest your money, and you leave it to the professionals,
you leave it to the investment experts to invest your
money on your behalf. The only thing you've got to
do is pick what level of risk you want to take.
So providers that have this option, they'll generally have a
(13:01):
couple of managed portfolios, maybe three, maybe five, that all have
a different risk rating. So you've just got to decide
whether you want to go for the lower risk one,
a medium risk one, a higher risk one. Sometimes you'll
see different terminology, they might use words like cautious, adventurous,
things like this. But it's the same concept. That's great for beginners because
you don't have to have a huge amount of knowledge.
(13:22):
You can just take a step back and like I say,
let the professionals do their thing.
Kia (13:27):
Number eight, with higher living costs and inflation, breaking into
the property market has seen more difficult than ever. But Legal &
General's Hazel Johnston shares some great tips for getting a
foot onto the property ladder. What if you don't have
access to that kind of family support? Do those people
risk being locked out the property market?
Hazel Johnston (13:45):
Yes. I'm really interested to use the word overwhelming, because
it can be so easy to feel so overwhelmed looking
at the amount, but what I'd say, it probably comes
to three things. I'd say, first of all, no, you're
not locked out that market. If we're talking about savings
and actually being able to financially get there, I'd say,
if you're anything like me and you've got a pot
of money saved up, you want to try and keep
(14:08):
that there. And it's so easy to dip into that
or be tempted to if your friends, I don't know,
make a trip or something. So I would always say,
try and save on the side. So have your property
savings either in an ISA or whichever way that you choose
to do that, but then there are some apps and
tools that can help make saving on the side for
(14:28):
your little luxuries really easy. So I know for example
with my bank, it will round up automatically the spare
change to the nearest pound, and then that's my little
fund that actually builds up quite a bit over time.
Kia (14:42):
It does.
Hazel Johnston (14:43):
So I'd definitely say trying to utilize little tools and
techniques like that can help, without it then feeling like
a chore, trying to get those savings up. Thirdly, and
the more practical part really, if you really can't afford
to save or get to the savings that you want
to or all the schemes that are available, there's lots
and lots of details, which I'm sure mortgage advisors could
(15:04):
help you on that. And then you've also got lifetime ISA,
but essentially getting free money. They'll give you 1, 000 pounds
for every 4, 000 pounds you save, so it's 25%
of your savings up to 4, 000 pounds each year.
And I just think people need to be more aware
of that. So it's not just about buyers and purchasers
having to do all these different things to try and
(15:24):
get into the industry. A lot of big industry names
are also supporting new and innovative initiatives. So one being
Generation Home, that's a startup mortgage company. So there's lots
and lots going on to try and make it easier
for people to get on that property ladder.
Kia (15:41):
Number nine, you often hear the importance of diversification when
it comes to investing. Pension expert Michael Porter from Legal &
General shared an amazing analogy to help us understand it,
not just for pensions but for an investment portfolio. Have
a listen to this.
Michael Porter (15:55):
So diversification in its simplest terms, is not putting all of
your eggs into one basket. So not going all in
on equities or all in into a bond fund. So
if you think about it a bit like going to
a buffet, so when you go for a buffet, rather
than taking just one particular type of food, you're then
(16:18):
risking not liking that food and it might not be
to your taste. So actually, at a buffet, you would
go and try a few different types of food, and
the chances are then that if there's one part of that
meal that you don't like, then there are going to
be other options available to you that you will like, ultimately.
So that's the first thing. And the other thing I
would say is that you should probably have a balanced
(16:40):
diet as well. So not just all about pension savings,
you probably want to diversify where your savings are invested,
because they all serve a different purpose. So pensions, for example,
saving into a pension is going to help you towards
saving for retirement, but then if you've got medium- term
savings goals, you might want to invest in something like
a stocks and shares ISA or have a cash ISA.
Kia (17:03):
At number 10, we often hear and maybe dream of financial freedom, but how do
we actually get there? Jenny Hazan from Legal & General broke
it down for us.
Jenny Hazan (17:11):
Work on something that the industry sometimes like to call
the FU fund. And that is really about having power
and having choice. So this is the ability to walk
away in situations where they're not serving you anymore. So
that might be a job that you really hate that's
really impacting your mental health, it might be to walk
away from a relationship, it might be to walk away
(17:33):
from that awful flatmate that has not washed the dishes
since the day they moved in. And over time, you
can continue to build that fund. So I think that's
a really important one to think about. After that, you
can start thinking about those savings goals, so the short term,
the medium term, and the long term, and think about
what sort of money you will need for those goals,
(17:55):
and at what point in your life, because that has
an impact on where you want to invest that money.
So I think from a longer term perspective, obviously, a
pension is a great place to start thinking about long-
term saving. Pensions can be really tax efficient, so if
you wanted to put 100 pounds into your pension, 80
pounds of that would come from you, 20 pounds would
(18:17):
come from the government, and also, your employer will, if
you've got a workplace pension, will also be making contributions
as well. And I think it's worthwhile mentioning that some
employers will put more money in, they'll match your contributions,
and if you are not going to that level, you're actually leaving
free money on the table, and no one wants to
do that.
Kia (18:40):
That wraps up our top 10 money tips. I hope
you learn as much as I did, have a lovely Christmas,
and we'll talk to you in the new year. I'd
love it if you could review the podcast, spread the word,
and help others get a little bit richer too. Keep
up with the show on TikTok and Instagram at Legal & General. Thank
you for listening. See you soon.
Hey, it's Kia. Welcome to another episode of A Little
Bit Richer, brought to you by my friends at Legal & General.
There have been so many nuggets of financial wisdom on
this show, too many to count, but I've been going
back through the archives and have handpicked 10 of my
favorite money tips from all of our episodes so far,
to send you into the next year as a financial
whiz that I know you are. So let's dive in.
(00:24):
Number one, first up is the toughie but a goodie.
Iain Russell from Money Hub talked to me about the
importance of financial discipline, and how not to lose sight
of your goals. Even though it could be hard, it's
worth it in the end.
Iain Russel (00:35):
So number one I say is, maintain that financial discipline.
Just take a second when you're thinking about purchases. Is
it definitely what you need? If it's new clothes, are you
going to wear it enough to justify the price? Would
you potentially visualize that money? Would you prefer it to
be in one of your savings accounts or knocking off
(00:56):
a bit more of your credit card? So it really
all adds up. So just taking that little bit of
time to just have a think before you spend. Number
two is living below your means. So again, we're going
back to looking at your spending habits. Look to make
those choices that prioritize the long term financial goals and
give you that ability to top up your emergency fund
(01:17):
and save for the future. And finally, start early. So
new year is perfect.
Kia (01:22):
Good time.
Iain Russel (01:23):
It might be cliche, but it really is the perfect time
to build those savings, pay off debt, pop some more
money into your pension, because the earlier that you start
to do that, the better you feel. And like I
said before, even if it's just 10 pounds a month
or it could be up to 100 pounds a month,
it really doesn't matter, it's building that habit, and the
earlier you start that, the better.
Kia (01:45):
Number two, before you do any kind of investing, it's
imperative you save towards an emergency fund that will look
after any unexpected short- term costs that might pop up.
No one could put it better than Mr. Money Jar himself.
Timi Merriman- Johnson.
Timi Merriman-Johnson (01:58):
The other thing to look at is, so we said
investing is a long- term form of saving, but short-
term savings are important too. And so the very first place
to start is your emergency fund. So the way to
think about your emergency fund is, if you were to
lose your primary source of income, or an emergency was
to happen, do you have enough money to get yourself
(02:21):
through that without having to rely upon debt? Saving an
emergency fund before you invest means that, should your investments
fluctuate in value, which they will do from time to time,
you have a pot in cash that you can draw upon.
The other thing to look at is things you'd like
to do or have in the next year or two.
As we said, investing's for the long term. We tend to think of
it in terms of years and decades rather than in
(02:42):
weeks or months. So if you're looking at the next
one to two years and you have things that you'd like to do
or have, this could be buying Christmas presents, going on holiday,
saving for a house deposit will be a big financial
milestone for a lot of people. Making sure that you're
saving towards those goals as well is very important. Then
anything over and above that can go into investments. That's
money that you don't need today and that's going to
(03:04):
work for you going forwards. And if you find the
concept of an emergency fund tricky to visualize, think of
it in the same way as an overdraft. So of an overdraft,
that's almost like the basement of your bank accounts. Your
bank account goes to zero, and then you have the overdraft.
An emergency fund is simply an overdraft that you fund yourself.
That's all an emergency fund is. So if you need
(03:25):
that cash, you're not going for a loan, you're not
reaching for the credit card.
Kia (03:29):
You're going for your own savings.
Timi Merriman-Johnson (03:29):
You have that money, you're putting yourself through that situation yourself.
Kia (03:31):
I love that. I love that. Number three, consumer debt can have
a massive impact on our finances, and financial advisor Orann
Coyle had some great advice around this and what to
avoid doing.
Orann Coyle (03:42):
Consumer debt is a killer of people's finances, and it's
something that can really badly affect your finances in the
long run. When you make naive decisions when you're young,
I'm talking about credit cards, leasing vehicles, personal loans, payday loans, overdrafts,
anything that has a high degree of interest that once
you get into it's going to be difficult to get
out of. And a real- world example at the moment
(04:03):
is buy now, pay later. And so that is a massive,
massive impacting thing on your finances in the long run,
because if you are not able to service those debts,
or you get caught in that trap, in the long term,
that affects your ability to buy a home, your credit
be affected, it could affect your relationships, because money is a
massive part of personal relationships. And so my opinion is,
(04:25):
you have to be very conscious of your spending when
you're young. And leading back to when people should seek
out information in their 20s and 30s, that's why you should, because
you need to make sure that the bad decisions are
signposted so that you can try and avoid them as
best as possible. So things like high- interest vehicles, there
is no need for that. So trying to avoid those
things can make a big difference. And obviously just overspending
(04:47):
and frivolously spending money. In reality, the first thing that
you should be thinking about is, " I need to get
a rainy- day fund behind me so that I know
I'm safe." And yeah, if you spend some money, that's okay,
you have to love your life, but you have to
always be aware, " Do I have a cushion to fall
back on if things don't play out the way I
wanted them to play out?" And that's really important, and
that's the foundation of a conversation I have with anyone.
Kia (05:09):
Number four, if you know me, you know how much
I love talking about pensions. Legal & General's Kim Brown and
I went deep on workplace pensions, and she has some
inspiring advice on what you want your dream retirement to
look like.
Kim Brown (05:20):
But the amount that you should be contributing is based
on you. It's based on what's affordable, but it's also
based on when you want to retire and what that
retirement looks like. So my best advice would be to
use some of the tools available to help you plan.
There's some brilliant free resource if you go onto Money Helper,
they've got a retirement planner, you can put in details
(05:41):
about what you earn, when you want to retire, as
I say, and they will show you your projected income
at retirement. But they've also got good sliders that you
can adjust, " What happens if I paid more? What happens
if I retired later?" Companies like ours, like Legal & General,
will have similar things, retirement planner tools, so get on
one of those free tools through your pension provider or
(06:01):
generally available and just look and think about it. And
your point on younger savers is so true, save as
much as you can as early as you can, because
that money has a really long amount of time to
work for you.
Kia (06:13):
Amazing. I think that's really important, like you said, and
I'm not too far away. So 30 is, it's approaching
for me, it's coming. Is there a certain amount that
people like myself, around that age, should aim to have
in their pension pot?
Kim Brown (06:28):
I thought you were saying you're not that far away
from retirement, I thought-
Kia (06:33):
No, gosh, no. Gosh, no.
Kim Brown (06:33):
Not quite.
Kia (06:33):
Not quite.
Kim Brown (06:34):
Not too far away from 30. Okay. I think it's worth looking at, and thinking now,
but I would just regularly review it. So I think
what can be really important is when you get a
pay increase, before you get used to that money in
your pocket, log back onto one of those planners, think
about the difference it could make over the longer term
if you invest. Same is true if you get a bonus,
it's a really tax- efficient way of using your bonus money.
(06:57):
And again, before it goes in your pocket, think about
retirement you and what that could mean then.
Kia (07:02):
That's good. I'm going to, I think I've said this before, pina colada
on the beach, I'm going to have that in mind
when I come thinking about my pensions. That's really good. Number five,
when it comes to paying pensions, there are many gaps
between men and women. Emilie Bellet, host of The Wallet,
came on to share what women need to know about money,
and had lots of practical ways women can manage their
money and build their wealth.
Emilie Bellet (07:23):
When we think about money, finances, investing, that can be
quite scary and overwhelming and you don't know where to start.
So it's just trying to start with the basics, and often,
when we run our courses and boot camps, we try
to have these conversations about money. There's still such a
big taboo around money because they have this lack of
education and money being this thing where it's quite, I mean,
(07:43):
I've always been taught that it's quite impolite to talk
about money, that girls shouldn't talk about money. When you
look at the statistics, girls actually receive 20% less pocket
money than boys. So I think doing a little bit
of work on your money mindset by having a conversation,
trying to write your money story, maybe seeing a money
coach also. Financial advisors can also help you, but really doing
the work for yourself. And then it's organizing your finances,
(08:06):
not being worried about checking your bank account. And I
know that's quite scary for people who never look at
their finances, but on the morning, try to check your
bank account once a day, you'll feel empowered, you know
exactly how much you have. And the same is going
to go for debts, trying to understand how much debt
do you have, how much savings do you have, and try
to understand your basic numbers. So having a little spending plan,
(08:28):
trying to check for the past months or for the
past three months, how have you been spending your money?
So this is the first part. And then thinking more
broadly about wealth, we all should think about wealth. And
of course here we're talking financial wealth, but knowing a
few numbers. So maybe trying to calculate your net worth,
which is the sum of all your assets, minus the
sum of your liabilities. If you are quite early in your working
(08:50):
life and if you have a lot of student debt, you will have
a negative net worth, but that's okay. It's just a matter
of improving this number over time and knowing your numbers,
knowing how much savings you have. So really knowing these numbers,
also your credit score, and writing them down, and having
maybe a little date with yourself and your money once
a month, and I'm sure you talk about that also
(09:11):
with your friends and communities and on your podcast, but
it's having this regular catch- up with money I think
is really helpful, and not judging yourself, really detaching your self-
worth from these numbers. They don't define you. The amount
of money you earn, the amount of debt you have,
they're not your personality, so trying to separate the two
I think is quite important. But be very realistic about
(09:33):
how much money you have, how much money you don't have,
and what are your goals going forward.
Kia (09:39):
Number six, we all love living in the moment, but Legal & General's,
Karen O'Byrne really taught me the importance of protecting your
future just in case the unexpected happens.
Koren Byrne (09:49):
Just because you're not having children and you're not getting
married doesn't mean that you shouldn't have any protection insurance
in place. I am my sole dependent, and if I
can't work or something unexpected happens to me, there are
still bills that need to be paid and I'm the
one that's responsible for them. So critical illness, income protection,
(10:10):
life insurance, explore them, read up on them, have conversations
about them, and just see if they're right for you.
And you can also have access to things like well-
being benefits, private diagnostics, counseling, private GPs, and these are
the services that you can access right now, which again
saves you money. So there are benefits to having these
(10:31):
products now, not just looking into the future as well.
I'm definitely of that generation of millennial that's very much YOLO.
I've just really aged myself there in saying that. I know,
I'm definitely not Gen Z. However, I think it's a
really great attitude to have sometimes, but don't do it
at the cost of your financial security for now and
(10:52):
in the future. By all means, enjoy life. Enjoy the
choices that you've made, enjoy the family that you've built,
whether that's you and your cat or you, two dogs,
three goldfish and a hamster, or whether that's you married
with children, don't put things off waiting to do other things.
So just be really mindful and don't disengage from your
(11:14):
finances just because you're enjoying your disposable income.
Kia (11:20):
Number seven, getting to know the benefits of ISAs and making
the most of them is really important to building a
personal wealth Legal & General's Fahad Ahmed explained all about stocks
and shares ISAs and how you can make them work for you.
Fahad Ahmed (11:32):
So first of all, you've got that tax- free element
that we spoke about. So any money that you make
through gains on the stock market, you don't have to
worry about paying tax on it. The good thing about
stocks and shares ISAs is that if you invest for
the long term, and we're talking about over five years,
you can generally expect to see better returns than what
you would see if you just left your money in let's
say your current account, or even a cash ISA. So
(11:54):
that's another thing that's really good. I do need to
stress though that with stocks and shares, ISAs, it's an investment. And
when we're talking about investing, it's all about the long term.
It's all about that minimum five years. That's the key
number to remember. But the longer you leave your money invested,
the more chance there is that you'll actually see positive returns.
As I said though, it's an investment, so your money,
it will go up and down, and you could actually
(12:14):
get back less than you put in. So if it's okay,
I could just touch on those different options for how
you can invest in a stocks and shares ISA. So
there's two main options. The first one is what we'd
call a DIY approach. So this is where you pick your
own investments. You can pick things like corporate bonds, government bonds,
unit trusts. You can even go as far as to
pick your own individual company shares. And for me, that's
(12:37):
what seemed a little bit daunting.
Kia (12:38):
It's very hands- on, isn't it?
Fahad Ahmed (12:39):
Exactly, exactly. So for me, it is not really the one. What
I like is the second option, which we call managed portfolios. Now,
with a managed portfolio, you can take a step back,
you invest your money, and you leave it to the professionals,
you leave it to the investment experts to invest your
money on your behalf. The only thing you've got to
do is pick what level of risk you want to take.
So providers that have this option, they'll generally have a
(13:01):
couple of managed portfolios, maybe three, maybe five, that all have
a different risk rating. So you've just got to decide
whether you want to go for the lower risk one,
a medium risk one, a higher risk one. Sometimes you'll
see different terminology, they might use words like cautious, adventurous,
things like this. But it's the same concept. That's great for beginners because
you don't have to have a huge amount of knowledge.
(13:22):
You can just take a step back and like I say,
let the professionals do their thing.
Kia (13:27):
Number eight, with higher living costs and inflation, breaking into
the property market has seen more difficult than ever. But Legal &
General's Hazel Johnston shares some great tips for getting a
foot onto the property ladder. What if you don't have
access to that kind of family support? Do those people
risk being locked out the property market?
Hazel Johnston (13:45):
Yes. I'm really interested to use the word overwhelming, because
it can be so easy to feel so overwhelmed looking
at the amount, but what I'd say, it probably comes
to three things. I'd say, first of all, no, you're
not locked out that market. If we're talking about savings
and actually being able to financially get there, I'd say,
if you're anything like me and you've got a pot
of money saved up, you want to try and keep
(14:08):
that there. And it's so easy to dip into that
or be tempted to if your friends, I don't know,
make a trip or something. So I would always say,
try and save on the side. So have your property
savings either in an ISA or whichever way that you choose
to do that, but then there are some apps and
tools that can help make saving on the side for
(14:28):
your little luxuries really easy. So I know for example
with my bank, it will round up automatically the spare
change to the nearest pound, and then that's my little
fund that actually builds up quite a bit over time.
Kia (14:42):
It does.
Hazel Johnston (14:43):
So I'd definitely say trying to utilize little tools and
techniques like that can help, without it then feeling like
a chore, trying to get those savings up. Thirdly, and
the more practical part really, if you really can't afford
to save or get to the savings that you want
to or all the schemes that are available, there's lots
and lots of details, which I'm sure mortgage advisors could
(15:04):
help you on that. And then you've also got lifetime ISA,
but essentially getting free money. They'll give you 1, 000 pounds
for every 4, 000 pounds you save, so it's 25%
of your savings up to 4, 000 pounds each year.
And I just think people need to be more aware
of that. So it's not just about buyers and purchasers
having to do all these different things to try and
(15:24):
get into the industry. A lot of big industry names
are also supporting new and innovative initiatives. So one being
Generation Home, that's a startup mortgage company. So there's lots
and lots going on to try and make it easier
for people to get on that property ladder.
Kia (15:41):
Number nine, you often hear the importance of diversification when
it comes to investing. Pension expert Michael Porter from Legal &
General shared an amazing analogy to help us understand it,
not just for pensions but for an investment portfolio. Have
a listen to this.
Michael Porter (15:55):
So diversification in its simplest terms, is not putting all of
your eggs into one basket. So not going all in
on equities or all in into a bond fund. So
if you think about it a bit like going to
a buffet, so when you go for a buffet, rather
than taking just one particular type of food, you're then
(16:18):
risking not liking that food and it might not be
to your taste. So actually, at a buffet, you would
go and try a few different types of food, and
the chances are then that if there's one part of that
meal that you don't like, then there are going to
be other options available to you that you will like, ultimately.
So that's the first thing. And the other thing I
would say is that you should probably have a balanced
(16:40):
diet as well. So not just all about pension savings,
you probably want to diversify where your savings are invested,
because they all serve a different purpose. So pensions, for example,
saving into a pension is going to help you towards
saving for retirement, but then if you've got medium- term
savings goals, you might want to invest in something like
a stocks and shares ISA or have a cash ISA.
Kia (17:03):
At number 10, we often hear and maybe dream of financial freedom, but how do
we actually get there? Jenny Hazan from Legal & General broke
it down for us.
Jenny Hazan (17:11):
Work on something that the industry sometimes like to call
the FU fund. And that is really about having power
and having choice. So this is the ability to walk
away in situations where they're not serving you anymore. So
that might be a job that you really hate that's
really impacting your mental health, it might be to walk
away from a relationship, it might be to walk away
(17:33):
from that awful flatmate that has not washed the dishes
since the day they moved in. And over time, you
can continue to build that fund. So I think that's
a really important one to think about. After that, you
can start thinking about those savings goals, so the short term,
the medium term, and the long term, and think about
what sort of money you will need for those goals,
(17:55):
and at what point in your life, because that has
an impact on where you want to invest that money.
So I think from a longer term perspective, obviously, a
pension is a great place to start thinking about long-
term saving. Pensions can be really tax efficient, so if
you wanted to put 100 pounds into your pension, 80
pounds of that would come from you, 20 pounds would
(18:17):
come from the government, and also, your employer will, if
you've got a workplace pension, will also be making contributions
as well. And I think it's worthwhile mentioning that some
employers will put more money in, they'll match your contributions,
and if you are not going to that level, you're actually leaving
free money on the table, and no one wants to
do that.
Kia (18:40):
That wraps up our top 10 money tips. I hope
you learn as much as I did, have a lovely Christmas,
and we'll talk to you in the new year. I'd
love it if you could review the podcast, spread the word,
and help others get a little bit richer too. Keep
up with the show on TikTok and Instagram at Legal & General. Thank
you for listening. See you soon.
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