YES! I finally got the call. It was my friend Natalie (name changed for privacy). She asked if I could help with her money management.
^Was my response.
Managing money is one of my FAVOURITE subjects.
I love learning time efficient ways to accumulate more money. I love time efficient ways of managing money. And above all, I love pretending I’m some sort of money coach whenever my friends agree to role play with me.
During our sessions we go through:
- Their current spending habits
- Their beliefs about money
- Why they want to get out of debt/what awesome experiences to save up for
- My beautifully formulated spreadsheet (Including budget & expense tracker)
Of course, I was over the moon when Natalie called and I insisted we schedule a meeting that instant. She kept saying things like “Are you sure?”, “I don’t want to burden you”, blah blah blah. I was like “Dude, do you even know me? I love this stuff! Please. You’ll be doing me a favour.”
If you haven’t yet gathered, I am bizarrely passionate about managing money. Always have been.
Ever since I could count coins.
My Dad always had coins left in random places in his house. I would spend hours collecting them, counting them, dividing them up into £1 piles (obviously I put all the 50ps together, all the 20ps together… and the few £1 I found I would put in piles of £5). When all the coins were counted and piled up I would smile with glee, then recount the coins to make sure I’d got it right. I don’t care if it sounds sad, I loved it!
As agreed, Natalie came over a few days later. I was stoked! Then we discussed her current spending habits, I was shocked.
Natalie’s current spending habits
It genuinely did not occur to me that people:
- Don’t look at the price of items when food shopping.
- Buy fresh fruit and veg which consistently gets thrown out.
- Don’t look at the bill in a cafe before entering their PIN number.
- Go over their overdraft limit without realizing and then get a hefty fine.
- Buy luxury handbags and clothes when they are currently in debt.
- Buy food from an expensive cafe next door to their house, instead of cooking herself.
As Natalie was explaining the above her face turned to disgust. She realised, “I have been so mindless. I’m literally throwing money down the drain on things I don’t need!”
When we look at Natalie’s beliefs about money, her spending habits will make more sense. Natalie then asked about my spending habits which I am happy to share with you guys.
My current spending habits
- Always check the price of items when food shopping. Is there a cheaper brand that has the same quality? Is there a deal on food items I can store? Also, I don’t buy the cheapest brand. I buy the best value brand. Value = price and quality.
- Before I order anything in a cafe I work out how much it will cost in total. If that number doesn’t come up on the bill, I question it.
- I check my bank account a couple of times a week to check rents and make sure there are not any weird transactions.
- I don’t care for designer stuff. I buy most of my clothes from charity shops. It’s cheaper and I’m contributing to something good.
- I only buy what I need. Then I go full out on experiences. For example, this February I’m going to New Zealand to visit friends for 2 weeks. The plane ticket is less than two Louis Vuitton handbags which are on sale. Seriously –> http://bit.ly/1PTehI0
Beliefs about money
There is a story behind every action. This sentence is such a great life reminder. There is a story, behind every action. There is a story behind the grumpy cashier in the bank; the creepy guy who keeps staring at you on the tube; and the guy who told you “You can’t do it.” His parents probably said the same thing to him.
Every action we take is based on a belief of ours. A belief that was likely formed from when we were young by watching and observing our parents. How do your beliefs impact your behaviour?
Natalie’s current beliefs and behaviours around money
- “Whenever I get money I spend, spend, spend, and get rid of it immediately. I can’t hold on to it. That’s what my Mum does too.
- I hate checking my bank account. I am always scared I’m going to see something horrible.
- If I’ve had a bad day I will go out and buy a new handbag or something, even if I can’t afford it. But I think it’s good to treat myself, right?
- Price dictates quality. If I look at food prices, I will always buy the most expensive brand. Quality is so important!
- Even if I’ve got a full fridge I will still get a takeaway if I fancy one. I usually get a takeaway 3 -4 times a week, but then I have to throw out most of the food in the fridge.
- I wish I could afford to go on holiday.”
These are Natalie’s beliefs around money. And before passing judgement I have to remember, she only knows what she knows. I only know what I know. As before, Natalie then asked what my beliefs are.
My beliefs and behaviours around money
- I love money. I value every £1 I have.
- This is demonstrated through only spending money if my perceived value of the item/service is higher than or equal to it’s price.
- There is an abundance of money.
- I am going to be a multi-millionaire before I’m 30 years old.
- I am a money magnet.
- Whenever I give a tip, I give the money an intention to bless the person who is receiving it.
- I have a monthly direct debit to a savings account.
- Money is a tool. A tool that helps me have amazing experiences
My special red purse
While reflecting on this topic, I am remembering ‘silly’ little habits I used to have when I was a little girl. I want to tell you about my special red purse. See if you can see any parallels between what I have shared with you in this article so far and my story below.
When I was 7 years old I had a piggy bank which sat on my bookshelf and two purses. One main one, and a special red purse with a tiny bear on. I would only use my special red purse for school fetes and days out with friends, so not that often.
Let’s rewind to summer, 1998. The Chipping Norton Primary School Fete was approaching. I excitedly went to the back of my wardrobe to pull out my special red purse. I opened it up and my seven-year-old-self gasped! Inside was 20p. I was over the moon! I had totally forgotten I had left 20p in there.
This meant I could have an extra go on the swing boats! I couldn’t wait to tell my Mum what I had just found.
The glorious school fete day arrived. Mum kindly gave my brother and I a few pounds each to spend. This was essentially our budget. I asked my friends if we could walk around all the stalls and rides first, before deciding on what to spend our money on.
As we walked around I noted what I wanted to go on and kept a tally in my head. Sadly everything I wanted to do was too much for my budget, so I prioritised.
My friends wanted to get their face painted, but based on my budget and the level of enjoyment I would get out of having my face painted, it wasn’t worth the price to me. So I watched and it made me happy seeing them get excited about it.
I like how we are all different and see value in different things. The world would be very samey otherwise.
Now I’m 24, there is one thing I would like to confess to Mum and Dad. Whenever they gave me money for a specific event (e.g a school fete) I would always budget so I had money left over. Even if I wanted to go on the swing boats one more time, my mind wouldn’t consider it an option if I had already spent what I had budgeted.
Because my mind had decided that the money leftover was being saved, I wasn’t tempted to spend any more money. That was that.
When I got home from my exciting day of budgeting, spending and saving I emptied my little red purse (counted the change) then went to put my little red purse at the back of my wardrobe again.
But then I thought, “Why don’t I put a whole 50p in there this time?” If I was excited about a 20p, imagine how excited I’ll be when I find 50p! So that’s what I did. I put 50p in my special red purse with a tiny bear on and hid it in the back of my wardrobe.
I counted the remaining money again, just for fun. Then excitedly picked up every beautiful coin and carefully placed each one into my piggy bank.
Every time I got out my special red purse I had completely forgotten I had left money in there. I was equally surprised and excited every time. Remember, it was months between uses and, as a child, my brain focused on whatever was happening right that second.
Every time I went to put my special red purse away I would try and put a little more in then I had found. Can you imagine my face when I started pulling out £5 notes.. and £10 notes!!!
As you can tell, I really enjoyed the feeling when I found the money, so I thought, “Why don’t I start hiding money in more places?”
Again I started small and put 20p in one of my handbags. Same as before, I forgot about it; got excited when I found it; put in a little more if I could afford it and eventually it turned into notes. I saw it as my emergency fund.
17 years later I arrive back in Hammersmith station after an event on the east side of London and am bursting for a wee. For some reason, I chose a different handbag for that evening.
Anyway, because I’m so 21st century, I only have my debit cards and a £20 note hidden in my phone case. There is no way I’m breaking a twenty-pound note for the sake of getting 50p to pee.
Sorry but my illogical female brain won’t allow that. I’d prefer to run outside and piss in the car park.
So this posh but annoying bag has all these different compartments. Knowing what I am like I take a deep breath, cross my fingers (and legs) and open the back zip pocket. What the heck!? I have £4.86 in there, this is amazing! I could pee 9 times if I wanted too!!
And that ladies and gentleman, is the story of my special red purse. I think we were all relieved it ended well. Ha. Ha. Ha.
Be mindful or your spending will suffer
Our beliefs about money determine how much money we have; and how much money we have the ability to acquire.
Reflect on your own beliefs about money. If you are not sure what they are, look at your spending habits. Next time you are in a supermarket, be mindful of what you are doing. This will give you an indication of how you treat money.
I always make sure I have enough money to put into savings each month. This gives me the reassurance I am not spending money I don’t have. Plus it gives me security knowing I have savings in case anything unexpected happens.
If you’ve found this article helpful, please share it with your very own Natalie, and give our Facebook page a like for updates straight to your newsfeed.
Here are some more of my adventures for you to enjoy:
- 3 lessons my hilariously awkward dating life taught me about property
- How I was able to raise £250,000 in 7 days
- Here’s what happened when I bought my first property