A Little Bit Richer podcast

Kia: Hi. It's Kia. Financial abuse is a phrase that is becoming more and more widely used in modern society, partly thanks to high profile cases such as Britney Spears's controversial conservatorship where her family were in control of her earnings for many years. So it's a particularly important topic this week: how to recognize different forms of economic abuse and what you can do to help friends or family who might be experiencing this.

With me today is Katie Binns, an award- winning journalist who investigates financial abuse. Before we get into the episode, I just want to note that we'll be speaking about topics including domestic and economic abuse and coercive control, just flagging in case that's a trigger. We'll be including some places to go to for support in the show notes too. Okay, let's get into it. So Katie, financial abuse is a topic we're all becoming more aware of, partly due to celebrities such as Britney Spears, Mel B, and Kesha going public about having been subjected to it. Could you start by explaining more about what financial abuse is, please?

Katie: Yes. Financial abuse is something that is more common than you might think. One statistic that always shocks me and that I think is worth knowing is that 6 million people in the UK will experience financial abuse at some point in their lives. Shocking, isn't it?

Kia: 6 million?

Katie: Yeah, 6 million. That's what the latest research shows. And it involves someone, and this someone can be an abusive partner, an abusive friend, an abusive carer, an abusive family member, essentially denying you access to your finances and things that you own. And sadly, it doesn't exist in isolation. It doesn't happen in isolation. It happens alongside other forms of domestic abuse. And it can be someone controlling how you spend money, denying you access to work, running up debt in your name, refusing to pay joint bills, giving you a weekly allowance.

And I'm really glad that you mentioned Britney, Mel B, and Kesha, because they show us that financial abuse can happen to anyone. It doesn't matter how rich you are, how famous you are, how connected you are. Anyone can become a victim of financial abuse. I know that in the case of Britney, even though she was earning millions from her Las Vegas residency, she was given a weekly allowance. She didn't have access to her credit card. When I interviewed Mel B years ago, she told me how, when she left her husband, she didn't have access to her bank account. She didn't have a debit card. She didn't even have the money to put down for a deposit for a rental property.

Kia: Wow.

Katie: Yeah. Really wow, wow, wow. And in the case of Kesha, there's allegations of her being forced to work against her will with an abusive music executive. So three different women, three different situations, but they all really hammer the point that anyone can be a victim of financial abuse.

Kia: I think, like you said, when you see it not just from a normal person's perspective but from a celebrity's, it really just does show-

Katie: Yeah.

Kia: ... how prevalent it is.

Katie: Yeah.

Kia: And that it can happen to absolutely anyone. And the amount of power you have doesn't exclude you from that happening-

Katie: Doesn't matter.

Kia: ... to you.

Katie: Yeah.

Kia: I think wow. That's really powerful. So Katie, what are the signs of economic abuse then?

Katie: So economic abuse looks different in different situations. And actually, it can be really difficult to identify. Every person I've ever interviewed about their experience of financial abuse always says to me, " It started so gradually. And I thought they were so caring the way they offered to help me with my finances. And I thought it was really sensible that what they were suggesting." And so it starts gradually. That's one of the key things about financial abuse. And it can be sabotaging your access to income.

So we're talking about someone limiting the hours you work, maybe limiting your access to education and training so that you can work or maybe earn more money. It can be restricting your access to your finances. So someone essentially controlling how you spend or making you justify your spending, making you go through your receipts to justify your spending. Maybe giving you a weekly allowance, making you ask for money. Maybe gaining access to your benefits, restricting your use of your car, restricting your use of a mobile phone to apply for a job or something.

It can be exploiting your finances. So this is where we're talking about someone stealing your money, taking out debt in your name, which is truly devastating. It can be someone refusing to pay their part of the joint bills. It can be someone damaging your property, which obviously causes you financial harm. It looks different in different situations. And of course, this might make people really nervous about the idea of joint finances. And I'd hate that because joint finances are a brilliant way to manage your finances in a couple. Billions of couples benefit from joint finances, myself included. So joint finances are certainly a brilliant way to manage your finances and not to be scared of it just because of what we're discussing now.

Kia: I think it's such a wide spectrum-

Katie: Right.

Kia: ... of signs that you mentioned there that even just listening to you detail some of those, I'm like, sometimes you have friends who confide in you about things about their partners. I can almost identify certain situations where that could have led to that. It hasn't-

Katie: No.

Kia: ... fortunately, from anyone that I know personally. But it opens up to your mind to what it could look like-

Katie: Yes, yes.

Kia: ... and begin to move into, which I think is just very key for people to be aware of.

Katie: Yeah.

Kia: So we can see how devastating economic abuse can be for people. Like you said, we've read so many stories about people that it's happened to. So is it classified as a crime now then?

Katie: So economic abuse is recognized by the law. Since 2021 it's included in the definition of domestic abuse in the Domestic Abuse Act. However, this doesn't make economic abuse a crime in its own right. What this inclusion in the Domestic Abuse Act means is that police and other agencies should be aware of the issue of financial abuse and they should be more likely to recognize a pattern of financially abusive behaviors as coercive and controlling behavior.

And this is the really important part because financially abusive behaviors are recognized and prosecuted under the coercive or controlling behavior offense. And people have been prosecuted and sentenced to prison for financially abusive behaviors under the Controlling or Coercive Behavior Act.

Kia: I think that's good to know that there is that out there. So if someone is experiencing that, you can pursue a legal route and see where that does take you. So I think it is good to know that that is there. How can we take action? So whether it's someone who is experiencing economic abuse themselves or whether we know someone close to us that-

Katie: Yeah.

Kia: ... we believe experiencing that themselves?

Katie: There is help available. There are things that you can do. So if you are a victim, there is a hardship fund that you can apply to via the wonderful charity Women's Aid. I think you can apply for up to 500 pounds. Your bank may be able to help you. TSB, for example, has an emergency flee fund. HSBC has its safe spaces in all of its branches. Interestingly, your employer may be able to help you. Just a few days ago, I saw in the news that Kellogg's has put together an employee benefits package essentially for its employees who find themselves in domestic situations and that they want to help.

So your employer might be able to help you. If you have a joint current account with your partner and you want to deal with it, then you must speak to your bank about that. That's something you can do now.

It used to be that to close a joint bank account down, you'd have to have the two parties put in writing that wish. Now because of Domestic Abuse Act, that rule has been eased. So if you need to deal with a joint account, you must speak to your bank or building society. Another interesting one is the credit reference agencies. So Experian, TransUnion, they've set up a password system so that if your abuser tries to take out credit in your name, the password will stop them.

And so obviously that's a brilliant system to have in place. There's also the charity Surviving Economic Abuse, which is an excellent source of support for victims. They have a telephone support line, they have a survivor's forum.

If you are in that unfortunate position where you are watching a loved one who is in that position, what can you do? Well, again, there are things. It's about being there for them, telling them that you're concerned, telling them that you're there for them, that help is available, some of the help that I've just mentioned, for example. And to keep checking in with them because, more often than not, it takes people time to make a decision or to act.

I think be careful what you say around their abuser and be careful what you put in messages because their abuser might be reading them. That's another big one. Always have information about domestic abuse to hand so that you're ready for them whenever they're ready. Obviously it's a no- brainer if you're in a position to help them, lend them money, offer them a spare room. And I think emotional support is a big one that you can offer. De- linking in your finances from someone can be a lengthy process, so emotional support is a big one.

Kia: That's some amazing advice that you've given there. And I think even hearing how much building societies and banks and credit reference agencies are actually putting in place to help victims, I think, is stuff that even I didn't know was there. But it's really good for people to know about whether they're in that situation now or maybe they're not, but maybe that does happen later down the line just to know that you can-

Katie: Yeah.

Kia: ... do those things. And if you are someone who is observant, it happens to a loved one-

Katie: Yeah.

Kia: Then everything that you mentioned there is just really key and crucial. Thank you so much for your thoughts on this, Katie. As we all learn more about financial abuse, are there ways that the situation is getting more positive? For example, are there three things that are giving you hope?

Katie: Definitely, Kia. I think the first that the law recognizes economic abuse, the fact that people have been prosecuted and sentenced to time in prison for financially abusive behaviors. That's something that we can take heart from. I think the fact that banks and building societies are equipped to help you, they have specially trained staff. And increasingly, other companies and sectors and industries are training their staff to recognize the signs of financial abuse.

And I suppose the most positive thing I've encountered over the last five years of writing about financial abuse is the charity Surviving Economic Abuse. They are a brilliant charity and they have campaigned and advocated and supported victim survivors for something like six or seven years now. And we can take heart from everything that they're doing. They're really changing things.

Kia: Thank you so much, Katie, for coming on to the podcast to talk about this really important topic. I think it's something that isn't spoken about enough, but it's something that's very important. And you've shared so much insight and so much advice for people who are either in that situation or may have friends or family or loved ones who could potentially be in that to know where to go for help and just have a better understanding of what people could be going through.

Thank you to Katie for coming onto the podcast and for all of her work on this important issue. If you are affected by anything we've spoken about today, there are links in a description to relevant resources and charities who can help. If you enjoyed the episode, then you know the drill. Follow the podcast, tell all of your friends, and come back next week where I'll be talking about all things investing. See you then.

Kia: Hey. It is Kia. The world of investments can sometimes seem like a really murky, confusing place. There's a lot of loud voices on the internet talking about stuff like Bitcoin and NFTs, and it can really make investments seem like an extremely risky thing, that's only for the chosen few. If you have some money that you'd like to see grow, then this episode should be able to help you understand what to consider and be wary of.

There are different levels of risk and you don't have to be a tech bro to get investing. With me to get into all of this is Timi Merriman-Johnson. Timi is the founder of Mr MoneyJar, a financial education company, and he's also a podcast star and author. So Timi, let's get into it. Can you give me a very entry level explanation on what investing actually is and what is and isn't considered an investment?

Timi: Sure thing. And thanks for having me here. I like to think of investing as a long- term form of saving where we set aside money today in expectation of a return in the future. If we don't expect the return, then we might be gambling or speculating, and if we expect the return right away, then we're trading. So it's just very important to know the difference between those three things.

Kia: I think that's very key. I think sometimes when you think about investing, you think about people with those charts, like you said, the trading, but I think that breakdown really just makes it simple for people to understand. So really and truly, anyone who has something like a workplace pension is already an investor, right?

Timi: Yeah, absolutely. So in the UK at the moment, if you work for a company and you earn more than 10, 000 pounds per tax year and you're age over 22, you'll be auto-enrolled into a pension. And this money isn't saved in cash. It's actually invested for you, albeit very much happening in the background over the course of your career so that when you come to retire you have a pot of money to either stop working or to work a bit less. So yes, if you pay into workplace pension, you're already an investor, which is a fantastic thing.

Kia: So let's bring it back then. So if we're talking someone who's brand new to investing, what are the products that they should consider looking at?

Timi: So there's a few different types of investing accounts you can use. There are stocks and shares ISAs. There are lifetime stocks and shares ISAs, and there are also pension accounts, which we just mentioned, they're also a type of investment account. But if you're a beginner, you may want to start investing into a fund in a stocks and shares ISA as that lends itself well to people who are investing for the first time.

Kia: So how does that work? Is it, you just put money into that and that gets invested on your behalf if you put your money to a fund?

Timi: When you open a stocks and shares ISA with an investment platform, you have to nominate a bank account that you're going to top up that stocks and shares ISA with and then you can choose which fund you want to put that money into, so it's a two-step process.

Kia: But it makes that process a lot easier. You don't have to figure out what to actually invest into, specific stocks. It just makes it beginner- friendly. You put your money in there and I guess, invest on your behalf.

Timi: Yeah.

Kia: Amazing.

Timi: And then as we just said, pension accounts are also a type of investment account as well. They are called self-invested personal pensions or SIPS for short, and they have their own annual allowance of 60,000. If you pay into stocks and shares ISA, let's say you max out at 20,000 pounds and your investment grows, you get to keep that additional tax- free. You don't pay any capital gains tax or any tax on the income that you make through dividends and that sort of thing.

Kia: I mean, anytime I hear things are tax- free and we get money, to me it always-

Timi: We want to get money.

Kia: ... puts a smile on my face. It makes me happy if we can bring home some extra money, we don't have to give it to taxes. That's always a good thing, isn't it?

Timi: Yeah.

Kia: I remember when it comes to investing, I remember I started investing at 20 and I did what you just explained. I downloaded a platform and I signed up, and I remember at 20 I'm in university and I remember thinking, " Wow, this is all brand new." But it was so exciting to start to learn. I mean, I didn't start investing straight away. I did what you just mentioned. I researched on all of them and found the best one for me. But I think you breaking it down just shows that it isn't scary as people may seem. It is quite accessible, I think it is.

Timi: It's accessible and it's arguably the most accessible it's ever been because of the number of different platforms available. And I must say it's really great that you got started when you're 20. I got started investing when I was in my mid 20s and I wish I could have started sooner because a key component of investing is compounding. So the great thing about the fact that you started so early is that even starting with just small stems and investing regularly gives your investments a longer period of time to grow and compound over time. And compounding is basically where you get growth on top of the growth that you already have.

There's a exercise I like to do when I give talks. I'll say to people, " What would you much rather have 10 million pounds today or one pound coin that doubles every day for 30 days?" And people can tell that it's a trick question. So they'll go for the one pound coin and I'm like, " Yeah, you're quite right. If you take the 10 million pounds today, fair enough, you're a multimillionaire. But if you double one pound 30 times, then you're a billionaire because that's how compounding works with each additional day, your money is doubling and it can grow exponentially."

Kia: Compounding is the way. Let your money grow, put your money in, the growth can be on top of that growth. We love that. I think we've been talking about investing and I think it's also worthwhile mentioning that some employees are actually now offering workplace ISAs. So the benefits of these is that they're convenience. You can paint to them through salary deductions, that's through regular payments or through a lump sum, and the service charges on them are usually better than they would be if you set it up independently.

It's available for people through their employers, so it's also worth additional consideration for people to have a look at. Now, Timi, I want to talk about something. I want to talk about risk. So when we talk about investing, we know there's obviously higher risk attached to investing than let's say putting money in a savings account, but what kind of housekeeping should our listeners do to prepare for this additional risk?

Timi: Risk and understanding your attitude to risk is very, very important when it comes to investing because it must be said from the very beginning that there's no such thing as a 100% risk- free investment. You're always taking on a degree of risk when you set that money aside in the expectation of that future return. But the reason why we invest is because, and we can see at the moment with the rising cost of living is that cash tends to lose its value over time due to inflation.

And so we invest so that hopefully our cash can grow at a rate faster than inflation and we can see that that's happening in the UK at the moment. But as you said, there are some very important housekeeping things to do before we invest. Number one is to look at paying down high interest consumer debt. We know from the data that the average interest rate on an overdraft is about 40%.

We know the average interest rate on a credit card is about 20%, and to get a 20% return on an investment year in year out would make you one of the best investors in the world. It'd make you a Warren Buffet level investor. And so if you have high interest consumer debt, it's worth looking at either taking that to 0% or paying it down because that's money that you're losing.

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 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 of cash 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 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 work for you going forwards.

Kia: I think that's good points that you've made about understanding risk and preparing for it. And I think I'm very big on emergency funds because we never know what's going to happen. It's so key to have a pot of money saved there just in case things happen.

Timi: And I'm really pleased to say that I think the pandemic has actually changed a lot of our attitudes-

Kia: It has.

Timi: ... to risk as well. Earlier on in my career, the idea of having a pot of money set aside for seemingly no reason at all seemed very arbitrary to me. It's not something that I necessarily wanted to do, but I think the pandemic has shown a lot of us that you can lose your primary source of income and things can happen, your situation can change, particularly for younger savers. They're actually really thinking about it and doing it in a very sophisticated way. So even though we're saying it on this podcast, I speak to lots of people that are doing this already and I think it's great.

Kia: Timi, what advice would you give to our listeners who are deciding, " Yes, I want to start investing," but they're trying to figure out what is the right investment for them?

Timi: That's a really good question. I think there'll be lots of different things to look at. Knowing how long you want to invest for will be a really key thing. Like we were talking about risk, yes, you can invest into individual stocks, for example, but that's actually the riskiest way to own company shares, so you may want to look at funds for example. We know that there's a growing appetite for ethical investments, and so if you want to invest in a way that doesn't invest in arms or tobacco or that sort of thing, then that might be a investment that's right for you.

But also people with particular values like religious values, you may want to invest in like Shariah funds or Halal funds, that's another way that you can look at it. But I think the most important thing when it comes to investing and deciding what investment is correct for you is investing in something that you fundamentally understand.

So if you're investing into something because you've seen a hot stock tip on social media or your mate's doing it or you've seen something in the news, that's probably not the way that you want to go about investing. You want to have a sense of why you're investing into it, whether it aligns with your values for how long you're investing into it so that should the value of the investment come down as it sometimes happens, you're not panicking because you haven't made a decision copying someone else. You've actually done your own research into that investment.

Kia: I agree with you, and I think it's also worthwhile adding on to what you said that personal finance and investing is just that. It is personal.

Timi: Personal finance is personal.

Kia: Exactly. So what you might do versus what I might do versus what your mom might do are probably going to be three different things going on. So it's all about finding and deciding what's best for you and sticking to that. So to run off this episode then, Timi, I'm going to ask you the question that I always ask at the end of the episode. What are the three tips that you'd give to our listeners to help them get a little bit richer?

Timi: I think the first thing, and we touched upon this earlier on in the episode, is to try to stay away from high interest consumer debt. And if you have it, try to see if you can pay it down or get it to a lower interest rate. The second thing is to save up that emergency fund. The future is uncertain, but you'll know that if something comes up, you'll be able to put yourself through that. And then to set aside small amounts of money every month, invest regularly for the long- term and you should be financially better off at the end of that.

Kia: Timi, thank you so much. You always give such amazing gems and that was no different, so thank you so much for coming onto this episode. This has been great. So a couple of things to say about all this, please don't put money into high risk investments that you cannot afford to lose. I know it sounds obvious, but it's always worth keeping in mind. Once you're up and running, investment can be a great way to take more control over your finances and so can self- employment, which I'm going to be exploring next week.

But while you wait, be sure to follow and tell your mates about the podcast. Well, that's if you have time after you've sorted your investment portfolio, of course. Bye.

Kia: Hey, everyone, it's Kia. Do you ever feel like the classic nine- to- five office job working for someone else just isn't quite right for you? Well, there are lots of other options out there. Self- employment could be a really empowering option, and it's getting more and more accessible, but you do need to wear many hats as well as your main hustle. You have to be the HR department, finance, marketing, sales, and digital teams.

I'm chatting with Georgina Merckel about the opportunities self- employment has given her, as well as the financial stuff you need to keep in mind when you're working for yourself. Georgina is 27. She's the founder of TOPA, a small business and nonprofit consultancy. She's also won a Young Freelancer of the Year Award in 2022, so she's definitely the right person to be speaking to. So, Georgina, can you start by talking us through your self- employment journey? Because we want to know how that's looked like for you.

Georgina: So, I came out of university, I did a master's, and I just got an admin job working for somebody else, and I started that, and it was a couple of weeks before the pandemic actually, I decided to make some extra money online. I Googled, " How can you make more money online?" And virtual assistant came up, and I was like, " I can do that. I'm doing HR, admin." And I joined a freelancing platform, and so I just put myself online, got some clients, started doing the work, and then we went into lockdown, and I just went from being in the office to working from home, so I could do eight till four in my job and then four till eight in my self- employed stuff.

It really grew from there. So, by six months in, I decided to do part- time work, so I cut my hours down to three days a week and did my freelancing work two days a week, and the weekends and the evenings. And then eventually, about nine months after I started in March, I went fully self- employed, and my business just evolved. I moved away from admin into consulting and operations, and then it's just grown from there really.

Kia: So, Georgina, what are some of the things that you love when it comes to being self- employed?

Georgina: The freedom that self- employment gives you is out of this world. So, I pretty much work from my sofa with my dogs every day. I take random walks in the middle of the day. I get to choose who I work with and when. Last week, there was one day where I worked from 5: 00 PM to 11:00 PM. I did all- day cleaning. There's just so much you can do. I've worked with clients that just don't really vibe, and at some point you can just say, " This is not going to work for me." And then you can just move on and find clients that serve you better. And tomorrow I could be like, " I don't like the direction of my business, so I'm going to start marketing myself somewhere else."

But you can do everything all- in- one job, and that's the best bit. I think it's the right choice for me and for so many people out there, and we just don't get the exposure to being why you should be self- employed or why you can be self- employed because there's a whole world of self- employment and community and people who are literally targeting the same audiences. But we're all so different. I have so many friends who do similar things, but one client might not be for me or for my friend, but they'll vibe with someone else we know, and there's no competition. So, I just really love being in that freelancer community and really just setting my own life and my own plans, and there's no restrictions.

Kia: You're selling it to me, and I'm already there. It sounds amazing. It sounds great. I mean, having a sofa office, being able to do all that work when you want.

Georgina: Yeah. I mean, I call it the soft office.

Kia: Yeah.

Georgina: That's basically where I work all the time. It's not good for your back, though. I do have a desk. I do try and I do the whole standing, sitting desk situation, but most of the time I'm just sat on the sofa with the dogs with a blanket work from my laptop. I've worked in the car. I travel, and I'll just be sat on my laptop in a service station typing, drinking Starbucks, and filming myself for reels.

Kia: Sounds like a dream. Where do I sign up? You've already sold me. I want to sign on the dotted line now and join the self- employment route. Self- employment is such a big leap, especially the way that you did it. You did it a really smart way, having your nine to five and then your five to nine, as people call it, working on your side hustle effectively until it became your main hustle. But what was it that gave you that confidence to say, " I'm going to leave my skew nine to five and actually take the plunge and the leap into my side hustle (inaudible) "?

Georgina: It took me such a long time, and I could have done it a lot sooner if I'd had the confidence to do it, but it got to the point where I just couldn't juggle both, and I was reaching the point of burnout, and I was just working all the time. And at some point, I knew that had to change. So, it took a lot longer than I would've wanted it to. If I could go back in time now, maybe it would've left after six months. But what was great is I started building clients and my job, so I started matching my salary, and by the time I could match my take- home monthly, I decided that was probably the right time to leave because I wasn't going to take this big drop in income.

Kia: Of course.

Georgina: I was just going to go straight into the same salary, but on my terms, and then I could just take it from there and see what happens after that. But it took a lot of guts in the end really to get there because I didn't know anyone self- employed. I just did it. A lot of the people I'm around are all employed people with secure jobs, and they didn't know what to say either. I kept saying, " I think I'm going to leave my job." And they were like, " Whoa, you're making that decision? That's a bit scary, isn't it? You've got this job."

And by that time, I'd fallen out of love with it because I fell in love with working for myself. I just couldn't do both. So, at some point, I had to give, and I'm so glad I did. The pandemic definitely was the reason why that took off because everyone, all my clients, needed virtual support, didn't care whether you were in an office or at home, on your sofa wherever you were, but were just ready. And so it just really was all those things at the right place at the right time.

Kia: That's amazing that it's all just falling into place, and I mean, your journey is a testament to everything. So, that is amazing. Now we're going to move on to more the money side. So, the financial side of things. So, when it comes to self- employment, I've been self- employed, I am self- employed right now. And I myself know how finances can take you aback, and especially when you've come from something so stable as a nine to five to being self- employed, there are things that can change your finances and some things that may take you by surprise. So what, when it comes to the financial side of being self- employed, took you by surprise?

Georgina: I didn't have any kind of insight into what I needed to do. I had no plans, I didn't take any advice. I just went self- employed, and that included the financial aspects. So, I knew about tax; I knew I'd have to pay it a different way to how I'd been doing it in a payslip, but I just thought, " Well, that happens in January, and I'll work it out then." And then I did get an accountant, who I just didn't educate myself well enough on, the right person to work with and to get the right advice, and I never even asked how much he cost until I got the bill at the end. And he was like four times the price of my current accountant.

Kia: Oh my gosh.

Georgina: And I was shocked. I was shocked at how much tax I had to pay, and I didn't know I had to pay a year and a half, basically, of tax. You had to pay payments on account, and I didn't know about that, even though I think I did in the back of my head and I just hadn't thought about it, prepared. But then there's so much more. There's income protection and your pension. I paid into a pension when I had a job, but I never realized you had to do that as a self- employed person. I never thought about what happens if I get called for jury duty tomorrow or have an accident, or what if my business closes.

What am I going to do? And so I had not made any of those plans. Now I'm so grateful I have got those things in place, but I didn't read enough. It was like a year in, and suddenly I started to realize I had to learn this stuff quickly.

Kia: I think a lot of people will share the same story as you do. I know I definitely do. You kind of jump into self- employment, and it's great. You get to be your own boss, you get to do things that you want to do in your own time, and then the financial side comes, you're like, " Wow." Because I know for me, income protection was, again, something I didn't have. I wasn't fully aware of when I first started my journey. Also, having an emergency fund-

Georgina: Yes.

Kia: For your business was something that I hadn't factored in until I'd gotten to a point where I'm like, " I should really have a pot of money just sitting there in case I need to cover things in case things..." As you know, income comes and it ebbs and flows; some months are great, some other months are just lower. And those are things that I had to learn on the go, and it's only because I have an accountant and I have all of that.

But if you don't know, there's all things that you'd never know to consider until you're in that situation that's typically too late. So, Georgina, knowing what you know about your journey, what do you wish that you would've known or would've done differently/ again recommended to others who were about to embark on their self- employment journey?

Georgina: I think get really good advice. I mean, it's never too early to get an accountant. First of all, they know what they're doing. They are experts. Now I have an amazing small business accountant who works with people just like me. And so you get proper advice about your taxes, what you can claim, whether you should be a limited company or a sole trader, what you should be paying into. I didn't know that if you've got a limited company, they can pay your pension on your behalf, but if you're a sole trader, you pay yourself. So, there's a tax difference there.

And if you get that good advice and also get the fees upfront, so you know, on budget ahead of time, that will really help. I wish now if I could go back in time. I had a checklist of things to do from day one, things to do from six months in, and I'm now a member of IPSE, and they have a package where you get jury service cover and income protection.

There's some life assurance and contract dispute cover, and those things come together; you don't have to think about them separately. So, if you get the proper advice and you look at what your options are, clearly you can make those decisions well in advance and be prepared for them.

Kia: I completely agree with the advice that you've given, I think is so key. What would you say then to someone who's on the fence about becoming self- employed? Because it is a big jump. You and I have both done it, and I'm sure we can both agree that it is a big leap. It's one that I'm happy that I've done.

Georgina: Yeah.

Kia: However, I do understand it is a big change. So, what would you say to someone who is on the fence about that?

Georgina: I think if you're thinking about it, it's probably the right decision for you. If you're on the fence, start taking it seriously and start thinking about it. I would start doing both your paid job and the self- employment thing at the same time to build up that income because once... It's like a momentum thing; once you start getting clients or bringing in money, it carries on from there. So, it's really simple to keep doing it, but personally, I would do it. The freedom I get from being self- employed is just way above anything else in terms of any other benefits I could get. I wouldn't change it for the world. And I think if you're thinking about it, you're probably on the path already there.

Kia: I love that. I think, yeah, like you said, if it's rooted in your mind, it's probably something that you do want to do. So, Georgina, let's talk about pensions. Okay, so in episode three of A Little Ritual, we cover the importance of having a pension when you're in a workplace, but when you're self- employed, we know that workplace pensions don't actually apply here. Just a little summary to our listeners. A pension is a pot that you contribute to that will essentially fund your lifestyle once you reach retirement age. There are many benefits to contributing to a pension, especially from a younger age, as you're able to benefit from government top- ups and certain tax exemptions. But a question I want to ask you, Georgina, is how can someone who's self- employed go about setting up a pension, and why is it so important to have one?

Georgina: It's important because at some point you're not going to want to work anymore, or at least the level that you're doing right now. So, you have to be able to pay for your life. So, you need to start doing that. And the earlier you do it, the better it is. About a year into my self- employed journey, I just set up a pension using an app and started paying two pound a week into it. And in my head, I was like, I've ticked the box of setting up the pension, and I'm going to come back to it in three months time and work out what I should be putting in there.

And that step for me was really helpful because I'd done the admin bit and I'd got over that hump. Then I started working out what actually I need to save between now and 50 or 60 whenever I want to step away from my business. What am I going to need to live on to make the same money I can make now? So, it's really important that you start thinking about it. The earlier, the better.

Kia: Even though you contributed two pounds a week, it's the action of starting it.

Georgina: Yeah.

Kia: That is what's going to trigger you to, at some point, sit down with it and say, " Actually," like you said, " how much do I need to have in there? What amount am I trying to get to?" And then work backwards to start actually putting money into there. So, we mentioned how it's important, but how can someone actually start actually saving into a pension? How did you do it, for example?

Georgina: So I literally Googled self- employed pensions, and there are loads of options out there. I just signed up with an app where I put my details in, you do the admin bit, and then you just set up a regular amount or a lump sum. It's up to you.

Kia: And I think that's so key. As somebody who's self- employed, being able to control how much you put in, being in control of that is what you need.

Georgina: Yes.

Kia: So, I completely agree with you on that. I want to run off the episode as we always do, Georgina, and I'm going to ask you. What are your three tips to help our listeners get a little bit richer?

Georgina: So, if you're thinking about self- employment, start now. Start earning money or building that momentum. It's hard work, but it will pay off in the long run because then the drop or the change will be less dramatic. Start the pension early, like day one. You can do it if you're employed, right? You can just set up a private pension.

There's nothing stopping you. And I think the third thing is look into what packages are available. Can you get a group insurance that'll cover multiple things? Because it's better for you in the long run. Work out what the best options are, but get started sooner rather than later. The earlier you start sacrificing that income, you'll be better off in the long run, and it'll all just flow.

Kia: Thank you so much, Georgina. You've shared so many amazing insights and gems for us on this episode.

Georgina: Thank you.

Kia: That has made self- employment not seem as daunting for anyone who wants to get into it. So, thank you so much for joining us. It's been great to hear Georgina talk about her experiences of self- employment. Next week, we're continuing the conversation about the different career journeys that are out there. Where we look at the freedom your finances can give you. Want to retire early, travel, work part- time? Take a listen to hear what might be possible. In the meantime, be sure to follow the podcast and tell your friends. Bye.

Kia: Hey, it's Kia. Throughout this series, we've been exploring different ways to save and grow your money. In this episode, I want to focus on what your money can actually get you.

Everything's changing. It used to be you'd work one job all your life and then retire, but these days there are so many different approaches to work and leisure. So today, I'm talking to Jenny Hazan, Director of Customer Value Management at Legal & General, about all the different choices out there, and the freedom our finances bring us to make these choices.

So, Jenny, there are many different approaches to work and finances out there. People are doing FIRE, they're taking sabbaticals, they're having portfolio careers. Can you talk me through a few of these different options?

Jenny: Yeah, totally, Kia.

So as you said, that distinction between working life and retirement used to be really clear. In fact, we worked at one organization, probably stayed in the same industry, maybe even at the same company for all of our career. And then on a set date, we suddenly became retired, and hopefully by that point the kids have moved out, you paid off the mortgage, and now was the time that you got to enjoy life. And I think people are looking for more financial freedom, flexibility and choice, and they're looking for different options.

Even just friends of mine actually, that have taken on new ways of doing this. So a portfolio career, for example, is where you may choose to be freelance, you may choose to work on a number of projects that are related or unrelated, working for companies and organizations that are interesting to you, that you're passionate about.

I also have a friend that's recently taken a sabbatical. So a sabbatical is a period of time where you will agree with your company to take unpaid, usually unpaid, time off, so maybe three months or six months, to focus on other passions or things like travel.

And then in addition to that, because of the pandemic and because of our ability to connect with the working world from lots of different places, lots of people are choosing to be digital nomads, work from wherever they are, abroad. And I think people are really looking for opportunities to do things a little bit differently. So there's definitely a push for people to think about, " Well, can I work for a certain period of time? And then only work if I need to work?"

And we mentioned FIRE, so FIRE stands for financial independence, retire early, and that's a movement that started off in the US and became popular probably from about 2010 onwards. And the main principles are about saving as much as you possibly can, investing as much as you can, living off less of the world's resources, but living well. But people that are taking on the FIRE movement, are tending to save a lot more than what most people can usually save. So up to 70% of their income. And they're usually aiming to get around about 25 times their living expenses, so that they can invest that money and live off the investment returns.

Now that might seem a little bit extreme and it does mean a lot of sacrifice, but I think what this shows is that people are looking for different options for themselves. I know for me personally, travel's really important, and so I want to be able to have a lifestyle that over time my working life will allow me to do that.

Kia: It is great hearing the different ways that people are actually taking charge of their finances and taking charge of how they work. It is so key, because this generation is very much thinking about the future and thinking about different ways, like you mentioned, our parents or our grandparents, their generation was like you said, one job, work till you retire, retire, then that's it. And now we're kind of saying, " No, I actually want a bit more freedom. What can I do to get more freedom?" So I want to ask you then, how can our finances help us to access these different choices that we've got?

Jenny: Yeah, so I think the principles, even if we talk about FIRE where we say, " Oh gosh, that's quite extreme," but the principles of it still stand strong, which is save as much as you can as early as you can. And the reason for that is because the earlier you save, the more time that money has to potentially grow.

And I think with so many different choices available to us now, it can be quite difficult to think ahead to the things that you might want to do. So actually setting out some goals, whether those be long- term, medium, or short- term, so that could be anything from having flexibility around your career, to saving up a deposit, to just being able to afford some nicer little luxuries in life, is really, really important.

But that takes budgeting, that takes saving, and also working towards a goal. I think sometimes it can be quite hard to think about starting these sorts of things, so one of the things about thinking about these goals, and actually starting to picture them in your head, is that you then have a much clearer motivation for doing the work that you need to do in order to plan for this.

Kia: I love goals so much. I'm glad you touched on it, because I think when you come to your finances and you come to planning, or saving, or anything to do with your finances, and you're almost saving aimlessly, it can feel like, " Why am I doing this?" But when you have a goal in mind, that can help. And I'm someone who's very visual, so I put my goals down on a vision board-

Jenny: Same.

Kia: ... so I know... (inaudible) . ... so I know at the foot of my bed or wherever I choose to place it at my house, I can wake up, and when you have those days like, " Oh, I just want to spend my money on... I just don't want to do this," you can kind of look at your vision board, and see, actually, I know I'm saving, because I want to get to this or I'm investing for this reason. And it helps to keep you on track, which is so good. And I'm so glad you mentioned goals, because it's just really, really important.

Now, you touched on it a little bit just now, but what can our listeners be doing with their finances now, that can give them as much freedom as possible in the future with their finances?

Jenny: Once you're clear about your goals and what those goals might look like, what sort of money you might need to afford those goals, the first thing is really to have a look at your finances. So what have you got coming in, what have you got going out. How much do you think that you could save. And I think a lot of people sort of struggle with the concept of, " I don't even know how much to start with," or, " I haven't got much flexibility."

So a general rule is the 50, 30, 20 rule. So 50% of your income would be spent on your essentials. So the needs. 30% on your wants or the fun stuff. And then 20% saving for the future. So you can start there, and it will be different for different people, but what you want to be thinking about is, " How do I build towards financial resilience?" So what that means is, " Can I weather the storm if something comes out of the blue?" all the way through to financial freedom, which is where you get more flexibility with your choices over the long- term.

So to start off with, make a budget, try and stick to it, and keep going, be consistent. If you have a month that's tough, don't give up, keep going.

The second thing is you need to think about emergency savings. So thinking about your living expenses and trying to put away three months to six months of savings that are in an easily accessible cash account, high interest if possible, that you can gain access to.

So these are for the things that might go wrong in life. You know, your MOT just came through and your car's failed, or that you unfortunately lose your job, or maybe the washing machine broke down. So these are things, emergencies, that you need money for. And if you haven't got three months saved away and you're thinking, " My God, how do I do that?" start with one month, start with one week, step- by- step.

The second thing that you can do once you've got an emergency savings budget is start to 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 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, 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 a hundred pounds into your pension, £ 80 of that would come from you, £ 20 would 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're not going to that level, you're actually leaving free money on the table, and no one wants to do that.

Kia: I love the fact that you mentioned that fund, the FU fund. I'm from a Caribbean household, so in my background we call that like the vexed fund.

Jenny: The vexed fund. Love it.

Kia: So when you're, like you said, when you're annoyed, just having that pot of money, but I think it is about making your finances or making your money a point to give you freedom. So like you said, freedom of choice, to decide to leave a job that you don't like, all the things that you mentioned, or freedom to cover your income if you happen to lose it for a period of time, or freedom to decide that I want to retire at 45, but I'm going to put my money aside to be able to do that. I think that's the main key here. We're just trying to get our money to work for us so it can give us more freedom.

We have been talking about this and it sounds great, but I want to ask you, are there any disadvantages to all of this? Is it maybe too much to focus on so much of this for the future? Are we putting too much emphasis and too much pressure on a lot of things at once for the future?

Jenny: I think that's a great question. I think it's all about balance, and that balance is going to be really different depending on your own financial circumstances and what you're trying to achieve. And the worst thing that you could do is stretch yourself so far that you end up running up credit card bills whilst you're cleverly saving away, but actually you might have something that's a high interest rate debt, and you don't want to do that. You want to pay that down. So I think this is where it comes back to really sitting down with your finances, getting really clear about what it is that you really want. And I don't necessarily mean " things" in that sense. It will be, what experiences do you want? What sort of lifestyle would you like to have? How can you build up to that gradually? The plus point is if you're younger, then you've got a lot more time to do that if you start early.

And I think sometimes we worry about whether or not we're saving enough, whether or not we're on track, and there's lots of tools that can help you with that. But I think the important bit is not overstretching yourself, making sure that you remain balanced. And if you align your savings to your goals and to your ambitions, then it becomes a lot easier to say, " Do you know what? I probably could've made my lunch at home rather than buying it out. I probably don't need that other coffee. Do I need those new trainers?" and still give yourself a little bit of flexibility to reward yourself. We talked about the 30% of income on fun, because life should be fun.

Kia: Life should be fun. Absolutely. I agree with you. As someone who's in their 20s, I know how important it is to balance your finances. Obviously it is very important to make sure that your money's working for you and you're planning for the future, but also, I want to make memories. I want to have fun. So it is about striking that right balance where you're not, like I said, just spending tons of money on things. That maybe if you sat down you're probably just like, "I could've done without that." But equally, you're not saving everything or investing everything, so that you can't go out with your friends one weekend and have a good time, or you can't go on that trip that you wanted to go on. It's finding that right balance, like you said.

Jenny, I always end these episodes with the same questions, so I'm going to ask you, what are your three pieces of advice to help our listeners get a little bit richer?

Jenny: So we talk about money here, but actually it's about what it can allow you to do. So get really, really deep with yourself in terms of what you want your life to look like, what's important to you, what your values are, because developing your goals based around this will make it a lot easier to have the motivation to save.

The second one is save as much as you can as early as you can, because it really does make a big difference to the amount that you can save over time, and you get the awesome impact of compound growth as well.

And then the third thing is have fun with it. So I think sometimes we are at risk of not enjoying the saving that we do, because we see it as something to sacrifice. That we're sacrificing things in the now for things in the future. But actually, make it fun. Make it a game. Think about the rewards that you can offer yourself, and feel empowered. At the moment it can feel really stretched, particularly with rents increasing, mortgage rates increasing, the cost of just living is increasing, and so it can feel really difficult to think about saving. But ultimately, we can always start small, one step at a time.

Kia: Jenny, thank you so much. This has been just a great episode for people to kind of have some food for thought, to figure out what they want their money to be doing for them. And like we keep emphasizing, striking the right balance, and also enjoying life as well. That's the important bit. So thank you so much for coming on to the episode. This has been amazing.

Some great tips for planning for the future there, and that's really key. You just never know what might happen. Which is why, next week, I'm focusing on how unexpected life events, like illness, can impact your finances. It's important stuff. So if this is resonating with you, then follow the podcast and tell your friends. See you next week.

Kia: Hey, guys. It's Kia. We've been talking about how to hyper- focus your finances in order to get a little bit richer, but sometimes life just gets in the way. So this episode I'm talking about the impact physical and mental illnesses can have on our money.

Joining me is Koren Byrne, a PR manager at Legal & General. Koren joined Legal & General this year, but before this, she worked at our company who reviewed and rated financial products where her work involved promoting insurance protection.

Koren is 33 and one awful day last year, she suddenly went numb from the waist down. Following this, she was diagnosed with multiple sclerosis and has spent the last year adjusting to some big changes in terms of her personal life, work life, and finances. Koren's done an excellent job adapting to all of this, and she's joining me today to talk through her story, how this has impacted her life, and what she'd do differently if she could go back.

So Koren, to kick things off, please could you talk me through the story of your diagnosis?

Koren: Yeah, I can. One day I was having brunch with the girls, time of my life, and the next day, literally overnight, I woke up and I was completely numb from the waist down-

Kia: Oh, wow.

Koren: ... both legs. It's like straightaway was like, " That's not quite normal," and it was like pins and needles. My feet felt dead.

So as soon as I could, I got hold of my GP and I was really, really lucky that I had access to private healthcare through work. I was really lucky I got diagnosed very, very quickly. It was a long, hard process. You find out what's wrong and it feels like a bit of a journey and you don't really know what's going on.

And then you get your diagnosis and you sit in the office and they go, " It's multiple sclerosis." He looked at me really odd because I was like, " Okay, fine," because I was expecting it.

Kia: Okay.

Koren: And then I got in the car and my mum was there luckily and she was like, "Are you okay?" I was like, "No."

Kia: No, no. I mean...

Koren: No, I'm not. Because that's where the journey really starts and that's when the reality of the situation because you're still kind of hoping that maybe I'm being dramatic. So that was kind of the start of all the changes was when I got that diagnosis and I realized quite quickly how much of an effect, not just feeling physically unwell, but the mental strain of having a diagnosis of an incurable disease.

Like I've been sick, but I've never been sick to be told that you're not going to get better from, like this is with you for life. So it was dealing with the implications of that is kind of what came next and was the fun part, so to speak. The challenging part, challenging.

Kia: The challenging part. So I can imagine that was a massive worry that you had to undertake.

But how did this impact you financially? Were there changes that you had to make to your finances?

Koren: Yeah. So it's one of those ones like you deal with the health. At this point, I'm still very much going through the motions of being numb from the waist down. It lasted about sort of I think in total I had the numbness and the pain like for six months, but it was that impact then that it had on work.

So I'd worked really hard throughout my 20s to get to the point that I was in my career. I'd gone from like an internship earning like no money, all the way through to earning, like I was comfortable. I had a comfortable salary. I was starting to look at whether or not I wanted to buy a property, like start putting savings away and all of that.

I just felt like I'd hit a brick wall and that whole perspective of just like I always felt like I was soaring and then, all of a sudden, I was like-

Kia: Oh, no, I can imagine.

Koren: ... coming back down to earth with like a big bang, right?

And financially, I had some savings, but I was like living my best life so I was enjoying the disposable income that I had. So I had some money saved. I had like the bog standard three months of salary, like monthly salary saved up.

But I very quickly realised I'm not well. I don't know how long I'm going to be unwell for. I don't know what recovery looks like. I'm very fortunate that I did get the function back in my lower body and I went into remission quite well, but I could have had really lasting effects and disability and at some points I was walking with a stick. That could have been something that I carried on and continued to do.

So when it came to work, I just didn't know what that looked like, whether I needed to take time off. I also had to have a real sit- down with myself and can I continue to do the job that I'm doing?

Because one of the things that you get with multiple sclerosis is fatigue, which comes with it brain fog, and it just meant that I was really suffering at work. I couldn't find words in meetings and things like that. So where I'd gone from, well, I mean I thought I was all right in my job before and, all of a sudden, I wasn't able to do the things that I could do before.

The disease was new to me so I didn't know whether this was a permanent feature or whether that was just how I was going to be functioning moving forward.

Luckily, it sort of eased and the brain fog and I still get fatigue, but it comes in waves. So I was worried that I wouldn't have an income from work, and I was worried that if I went on sick, if it was long- term, whether I could live off statutory sick pay or how far my sick pay would stretch from work.

But I was really lucky at the time that I worked for a really, really good company that made some adjustments for me that helped me work and keep the salary.

And I was also extremely lucky with work that as part of the workplace benefits, I had a critical illness cover, which is a type of insurance against things like cancer and multiple sclerosis is one of the critical illnesses that is covered. So I got a lump payment from them.

Kia: That's really good. Really useful, I'm sure.

Koren: Yeah, and I think what that did was that kind of financial worry and that fear of the unknown of what that future looked like, it gave me a really good buffer so that I could continue to work and continue to forge that career path once I felt better.

But in an ideal situation because I had to work because I didn't have anything else other than that workplace benefit, I didn't have income protection so that I could have something where I could take six months off work and realistically that's what I should have done, because I had the physical side of things and then the mental health side of things that came with the diagnosis, not just the fatigue, but also I was not in a great place mentally because my whole world had just been turned upside down.

So I had some things in place. I had an extremely good employer that sort of really helped, and the critical illness really helped. But realistically, I wish I'd had a bit more there to sort of help and support me, take the time that I needed to sort of recover and work out what my next steps were going to be as well.

Kia: So Koren, I just want to ask you, what were you doing for work before you had your diagnosis, and how was that impacted after you received your diagnosis?

Koren: So I just started working in financial services and I'd been with the company for four years- ish. And I was like getting to that point where I was starting to look at what the next opportunities were going to be. I was really, really career- minded and focused on sort of climbing that career ladder as well.

And then you get hit with that diagnosis and, all of a sudden, that five- year plan is like ripped up. At some points I thought that I'd have to leave my job completely, change career, do something part- time, do something easier just so that I could focus on my health, physical and mental health.

And when I went to work and they were really supportive and I was able to access the critical illness cover and sort of have that money and that backing, it actually gave me the confidence to keep going full steam ahead. So let's stick to the five- year plan that I had for my career.

I felt more financially secure because I thought if it all goes wrong when I do need to quit or I do need to go or I need to take a job that's less money, I kind of knew that I had a bit of like a financial buffer there that I wouldn't have had without the critical illness.

And I started looking for jobs and I think this is where my outlook changed a little bit. I'd sort of chased a salary and sort of gravitas and things like that with the jobs that I'd gone for before, quite normal things. But I wanted something that served with a bit more purpose and that resonated with me.

That's where I saw the job with Legal & General, PR manager. I was like, tick, that's what I do. It's in financial services, tick.

And then the part that I really liked was it was specifically working with protection insurance. And I felt so passionately through my experience and being able to access the cover that I had and also passionate about the fact that I could have had way more cover in place. I could have provided myself so much more support had I understood that those products were for me at that age in my 20s. It wasn't just life insurance and it's not just about like the worst, worst thing happening, but also supporting your lifestyle as you go along.

The role really resonated with me and I was like, I absolutely want to do something because I feel like I've got a bit of a purpose. I'm on a bit of a soapbox with this.

Kia: Well, I think that's amazing. I think, like you said, it's something that young people should know about. It isn't covered very often.

So off the back of that then, what took you by surprise? What's the thing that you don't realize until you're in this type of situation?

Koren: I never thought that it would happen to me. And it sounds silly because my mum's got MS, but it's not hereditary. So really, I didn't think it was going to happen to me, like-

Kia: Yeah, of course.

Koren: ... and you think that sickness and these kinds of things are for people that are like older than you, right? I was building my life. I wasn't expecting it to be shattered overnight. I'd gone through my 20s thinking I was invincible, having a great time with all my friends, socializing, climbing the career ladder, doing everything that you're meant to do during those years.

And I didn't think that I would get to like 30, 31 and that would be, potentially could be the end of that kind of climb. And I hadn't and I don't know many people that do, especially when I talk to my friends. They don't think about what they would do if they got unwell or they weren't well enough to work.

And it's not a comfortable thing to think about, the unexpected and planning for the worst. But me, personally, I wish I had given that more thought. I was lucky, but if it had happened at any other point, or I was working for a different employer, the outcome could have been really, really different for me and I could have been really, really stuck.

And having three months' salary saved up is great, but it doesn't stretch very far when you've got bills and rent and also just like life to pay for as well.

Kia: That's the thing. I think there's so many things to consider, like you've mentioned, that it's almost hard, as you said, to see yourself in that situation.

Koren: Yeah, you can't. Until you're in it, you can't.

But I think that's the challenge you have to do with yourself, right? I think you do have to take that time to take stock and just say, " Okay, carpet gets pulled out from underneath me. What is my plan? What do I have in place to protect the lifestyle that I have today?" And that accommodates and accounts for everything, not just financially, but like your mental health, your physical health. Like what do you have in place and what support systems do you have in place today that can support you if the worst happens?

So start building some good habits with like putting some money away and take stock of that. Don't just save the three months' salary and leave it-

Kia: Yes.

Koren: ... because, as well, I'd based it on three months' salary before I'd had like pay rises and things like that.

So my lifestyle had moved on, but my savings were sort of stuck. So I was like, " That's done. I've got this little pocket. I can carry on." And I never took stock, and I never did things to continue to protect the life and the lifestyle that I was building. And you do it in the hope that you'll never have to use it.

But I think if you can get these really good habits to think in those terms and while things are up, don't wait until like I did where you are in that crisis point, and then start thinking about these things because it is a little bit too late. So do it while things are good, and just like explore what products could help you protect your income and protect your lifestyle as well.

Kia: So for you, you're in your early 30s and when you're young, it's really hard, like you said, to see yourself in any situation and to think that that could happen to you. So how would you like to see people's mindsets change here? Because I know your current line of work lines up with this.

Koren: Most people are really, really comfortable with insuring your things. Like you get a phone, you have insurance. Obviously legal requirement to have insurance. We are so comfortable with insuring things, it's second nature.

But for some reason when it comes to ourselves, our body, our health, it's boring and we don't want to talk about it. I don't know whether or not, especially when you talk about like life insurance, obviously that's like the very worst and you don't want to talk about that because it feels morbid. But it's like what we were saying earlier about protecting the lifestyle that you're building and the life that you're building out for yourself.

So I'd like to see that change. I'd like to see more conversation about how we protect ourselves and our lives against the unexpected happening. And a lot of these products when you're younger are a bit cheaper as well because sort of the risks are lower. I mean, there'll always be like one person like me that's like, " It happened to me, pick me." But no, I just really want that mindset to change, that it's not too expensive, it's not too difficult to have these conversations, and we are worth protecting and our lives are worth protecting.

Kia: Like you said, that is very key. We insure our products, but ourselves, it's very important so I think that's a great point.

But I want to run off this episode, though, the way that I always do. So I'm going to ask you, what are three tips that you'd give to our listeners to help them get a little bit richer?

Koren: I think start habits, good financial habits early, even when you're not earning a huge amount, start making savings, putting things away, and planning for the unexpected. Not just like rainy day funds, but actually worst case scenario planning as well.

And also look into insuring yourself in keeping your lifestyle going and look into things like income protection and critical illness cover. And I was really lucky that I had some workplace benefits, but check, really do look. It's great to have pizzas every Friday, it's great to finish at four o'clock every Friday, but actually look at the more boring benefits.

Have a look at your pension, have a look at sort of what life insurance is involved and also if there are any other benefits that come with that. Because a lot of the time you'll have access to things like counselling, again, like private diagnostics and private GPs and things.

Have a look at like that boring paperwork pack that you get when you start a new job and you're really excited and just take stock of what you've got in place and what might be missing from that as well. So you're not just relying on the workplace benefits, but what can you do and what products can you access on a personal level as well.

So just be mindful of all of your financial products, I think, is key from early on, so you build those habits.

Kia: Early on, that habit. That's a key point.

Koren, thank you so much for sharing your story. It's been very Insightful when you've shared some amazing tips so thank you so much.

Whether you are in a similar position to Koren or not, I hope that this episode resonated with you. If it did, then please be sure to follow the podcast, leave us a review and tell others who you think would be interested.

Next week, I'll be looking at student loans, the different types, how they can affect your finances and if you should repay them. See you then.

Kia: It's  Kia,  this  is  A  Little  Bit  Richer.  And  today  I'm  taking  a  deep  dive  into  the  world  of  student  loans.  Student  loans  are  one  of  those  things  that it's  so  easy  to  just  take  a  passive  approach  to.  You  go  to  uni,  you  get  the  loan,  your  repayments  start,  and  you  more  or  less  forget  about  it.  But  this  podcast  is  all  about  taking  back  control of all  of  your  finances.  And  the  first  step  to  getting  that  control  is  to  understand  it.

With  me  today,  to  help  us  get  to  grips  with  all  this,  is  Abigail  Foster.  Abigail  is  a  chartered  accountant  and  she's  a  founder  of  Elent,  a  financial  education  hub  for  students,  employees,  and  parents.  As  part  of  this,  she  runs  workshops  all  about  student  loans,  so  I  knew  I  had  to  get  her  on  to  learn  more.

Abigail,  people  listening  to  this  can  have  all  sorts  of  different  student  loan  repayment  plans.  It's  changed  a  lot.  So  let's  begin.  Could  you  talk  me  through  all  the  different  plans?

Abigail: Okay.  Yes,  there's  been  many  different  plans.  We'll  talk  about  the  undergrad  modern  plans,  so  one,  two,  and  five.  So  one  was  if  you  went  to  university  pre- 2012,  I  think  it  was  post- 1998,  but  pre- 2012,  you  would've  been  paying  the  tuition  loan  at  about  3K,  very,  very  nice  amount  of  money,  I  wish  I'd  paid  that.

Then  you  had  plan  two,  which  came  in  from  2012.  So  any  students  that  went  to  university  from  2012  to  2023,  you  were  on  plan  two.  And  then  any  university  student  that  goes  to  university  from  this  year,  so  from  2023  onwards,  they  are  now  on  plan  five.

Kia: Wow.  Okay.  So  how  do  all  of  these  loans  work?  I  mean,  if  you  think  about  a  loan,  we  think  about  interest  rates,  right?  So  you  might  take  out  a  credit  card  at  a  certain  amount  of  interest  rate  and  you now what  you're  going  to  pay.  Is  that  the  same  when  it  comes  to  student  loans?

Abigail: The  interest  rates  on  all  three  plans  frustratingly  all  different.  Like  to  make  it  nice  and  complicated.  So  plan  one  is  either  RPI,  which  stands  for  Retail  Price  Index,  better  known  as  inflation;  or  the  Bank  of  England  base  rate  plus  1%.  So  often  what's  happened  with  plan  one  is  the  interest  rate  has  been  lower  because  it's  that  Bank  of  England  base  rate  plus  1%.

Then  for  plan  two,  they  had  the  interest  rate  set  at  RPI  plus  3%,  so  Retail  Price  Index  also  known  as  inflation  plus  3%.  So  when  inflation  got  crazy  high  last  year  and  we  saw  those  11. 9%  numbers  of  inflation,  we  saw  huge  interest  on  the  student  loans.

Plan  five,  they  decided  as  their  nicety  for  changing  the  plan,  was  they  basically  introduced  interest  and  cut  it  back  to  just  RPI, so  just  inflation.  So  there  is  a  common  misconception  that  the  loan  doesn't  increase  over  time,  but  that's  not  really  true  because  it  does,  it  does  increase  by  RPI.  But  they  then  assume  that  that  RPI  means  it's  just  increased  with  inflation  therefore  the  real  value  of  the  loan  hasn't  increased,  but  it  definitely  does  increase  over  time.

Kia: Okay.  That's  good  to  know  that.  So  we  need  to  have  a  look  and  see,  depending  on what  plan  you're  on,  that  depends  on  what  interest  rate you are  obviously  going  to  have  on  your  student  loan.  So  when  it  comes  to  repaying  then,  because  I  know  when  I  was  in  university  not  too  long  ago,  I  know  I've  still  got  my  baby  face,  not  too  long  ago,  but when I was  in  university  it  was  always  this  thing  where  I  had  friends  say, " I've  taken  out  X  amount,  now  I'm  going  to have to  pay  it  straight  away."  I've  graduated  and  it's  almost  like  the  next  day  after  graduation  you're  going  to have to  pay  it  back.  But  I  want  to  ask  you,  what  salary  do  you  normally  have  to  be  on  before  you  start  paying  off  your  student  loan?

Abigail: Okay,  with  the  student  loan,  again,  let's  go  through  one,  two,  and  five.  So  with  plan  one  you  have  to  be  earning  over £22, 015,  if  we're  getting  specific.  With  plan  two,  it's  27,295.  And  then  with  the  new  plan  five,  you  need  to  earn  more  than  25  grand  a  year.  So  this  is  your  yearly  salary.

So  let's  say  you are  on  25K,  then  you  wouldn't  pay  anything  back  on  this  new  plan  yet  until  you  earn  over  25K. So,  you  only  pay  back  9%  over  those  thresholds.

Something  to  be  careful  though  is  that  what  tends  to  happen  is  they'll  take  your  yearly  salary,  divide  it  by  12  and  then  look  at  your  monthly  payslip.  So  if  you  don't  always  earn  the  same  every  month,  you  might  be  overpaying  the  student loan.  And  that's  something  to  look  out  for  because  it's  worked  out  on  a  yearly  basis,  but  on  your  payslip  can  often  be  then  brought  back  to  that  monthly  amount.  So  yeah.

Kia: That  makes  sense. I think  it's  good  to  know  that.  I've  seen  people  online  have  decided  to  take  control  of their  student  loans  and  log  in  and  see  if  they're  overpaying  and  have  been  able  to  actually  make  those  claims  back.  But  I  just  want  to  kind  of  go  back  to  what  you  said.  So  when  you  earn  over  a  certain  threshold,  you  mentioned  it's  any  income  over  that. 

I  think  people  sometimes  get  confused  if  it's,  like you  said,  the  new  plan,  it's  when  you  earn  over £25, 000,  some  people  think  that  they're going to pay back 9%  of  everything,  but  it's  only  the  income  over,  right?

Abigail: It  is  only  the  income  over  the  threshold  across  all  the  plans.  So  if  you  are  earning  30K,  you  are  paying  9%,  on  that  plan  five,  you're  paying  9%  on  5K.  So  the  difference  between  your  30,000  salary  and  that  25K  threshold,  9%  on  that.  But  it  does  add  up.  Obviously  the  more  you  start  earning,  that  9%  is  quite  a  large  chunk,  which  is  why  we  commonly  call  it  a  university  tax  as  opposed  to  a  loan  because  you  pay  more  the  more  you  earn.

Kia: Yeah,  absolutely.  But  I  think  yeah,  that  was  good for you  to  explain  that  because  I  think  sometimes ...  I  know  I've  spoken  to  people  who  have  almost  avoided  taking  out,  especially  maintenance  loans,  and  that's  obviously  the  loan  when  you're  in  university  that  will  help  you  live.  And  I  used  that  because  I  moved  away  from  home.  And  have  avoided  taking  out  more  money  because  they're  like, " No,  it's  a  loan and I've got to pay it  back  and  I  don't  want  to  graduate  and  have  to  pay  it  all  back.  Let  me  just  live  within  my  means  and  maybe  make  it  harder  for  myself."

But  I  think,  yeah,  the  way  you  explained  it that  definitely  does  help.  We  mentioned  student  loan.  Now  that  operative  word  loan,  will  that  affect  people's  ability  in  the  future  when  it  comes  to  getting  a  mortgage  or  any  other  type  of  loan  having  a  student  loan  out?

Abigail: It  can  do,  so  especially  with  a  mortgage  because  there  is  a  rule  which  is  that  the  student  loan  doesn't  impact  your  credit  score,  which  then  commonly  misconstrued  as  therefore  it  doesn't  impact  your  mortgage.  That's  not  true.  So  it  doesn't  impact  your  credit  score  in  the  terms  it  doesn't  get ...  it's  not  information  that  filters  into  your  credit  rating  agencies,  which  then  provide  you  with  a  credit  score.

But  it  can  affect  how  much  mortgage  you  get.  Because  if  you  went  to  a  mortgage  provider  or  you  went  to  a  mortgage  advisor,  et  cetera  and  said, " Right,  this  is  my  income."  They  would  say  to you, " Okay,  what are  your  outgoings?"  And  they  will  look  at  your  outgoings,  one  being  your  student loan.  So  if  you  are  earning  over  that  threshold  and  you've  got  quite  a  large  chunk  coming  out  for  student  loans,  that  can  affect  how  much  you  can  borrow.  So  that's  where  it  can  affect  your  mortgage.

There  is  discussions  around  if  it  can  stop  you  getting  a  mortgage,  it  shouldn't  be able  to  stop  you,  it's  not  like  a  bad  note  on  your  credit  score.  It  is  just  something  to  be  aware  of  that it  can  reduce  how  much  mortgage  you  can  get.

Kia: I  think  that's  good  to  know.  So  it is  just  part  of  the  affordability  checks  that  the  mortgage  providers  do.  It  is  part  of  what are  you  paying,  what are  your  outgoings,  and  that's  just  one  of  them  if  you  don't  earn  over  that.  I  think  that's  good  to  know.

Now  there's  a  big  question,  and  one  I  know  a  lot  of  people  want  to  know,  should  we,  as  in  former  students  who've  now  graduated,  should  we  prioritize  paying  off  our  student  loans  or  should  we  just  carry  on  as  we  are?

Abigail: When  it  comes  to  paying  off  your  student  loan,  you  need  to  put  yourself  in  one  of  two  camps.  So  one,  if  you  are  not  earning  enough  that  you  are  noticing  it  on  your  payslip,  leave  it.  Just  leave  it  be.  Because  once  you  pay  off  that  student  loan,  if  you've  voluntarily  chosen  to,  you  can't  go  back  to the  Student  Loans  Company  and  get  that  money  back.  And  that  money  is  gone.  So  whilst  you  might  be  taking  down  the  loans,  but  you  will  end  up  with  less  money.  And  obviously  less  money  in  your  pocket,  which  you  could  have  used  for  better  things.

If you fall into  the  other  bracket  where  you  are  noticing  a  huge  amount  of  money  going  out  of  your  payslip  for  student  deductions,  then  it's  time  to  look  into  whether  you  should  be  paying  off  early.  Because  like  I  said at  the  beginning,  those  interest  rates  are  not  to  be  laughed  at.  They  are  really  hefty.  And  by  paying  off  large  chunks,  you  can  obviously  reduce  the  time  left  you've  got  to  pay.  Because  if  you  know  you're  going  to  be  paying it  off  in  full  obviously,  and  you  have  that  disposal  income  to  do  so.

Do  not  bankrupt  yourself  trying  to  pay  off  your  student loan.  That  is  really  important.  I  think  a  lot  of  people  say, " Oh,  well,  I'll  go  to  my  parents  and  ask  for  money  or  I'll  take  out  another  loan  to  pay  off  my  student  loan."  Please  don't  do  that  because  it's  a  really  flexible  loan  you're  not  going  to  find  anywhere  else.  And  that's  why  we  call  it,  like  I  say,  university  tax  as  opposed  to  a  loan.

But  yeah,  there's  two  camps  there  really,  and  it  very  much  depends  on  how  it  impacts  you  and  your  monthly  earnings.

Kia: That's  really  good  to  know  I  think.  Yeah,  so  it  all  depends  on  what  your  income  and  outgoings  look  like.  Because like  I  said  I  have  conversations  even  with  my  friends  who  say, " Oh,  I  need  to  pay  off my  student  loan."  But  I  think  it  is  a  very  personal  decision.  It  is  how  much  does  it  actually  impact  your  income  as  to  whether or not  you  should.

Abigail: It's  so  personal  because  also  obviously  some  parents  really  struggle  with  it  because  our  parents  didn't  have  this  or  particularly  my  parents  never  went  to  uni,  so  they  don't  quite  understand  how ...  they  don't  get  why  it's  such  a  big  amount  of  money,  but  I'm  not  worried  about  it.  So  the  older  generation  looked  at  our  generation  and  just  can't  imagine  why  we're  not  paying  this  off  quickly.  But  it's  because  it's  not  really  the  same.

Kia: Yeah,  yeah.  It's  not  how  they  view  maybe  mortgages  where  they  may  overpay  their  mortgages,  it's  different  like  you  said.

So  if  there's  people  who  have  children  now  or  are  thinking  about  having  kids  in  the  future,  what  could  they  be  doing  to  think  about  their  kids  going  to  university  before  they  hit  18  to  make  that  all  easier  when  it  comes  around?

Abigail: In  terms  of  funding  it,  I  suppose  setting  up  pots  for  them  for  the  future.  We  all  know  compound  interest  is  king  or  queen.  And  therefore  the  earlier  you  start  the  better  you  can  build  that  pot  up.  So  things  like  junior  ISAs  or  junior  bank  accounts  for  young  people  are  really  great  ways  to  just  put  little  bits  of  money  away  now.  And  hopefully  when  they  get  to  it  at  18  or  whenever  they  choose  to  go  to  university, it's a  nice  pot  for  them  there  that  can  help  them  with  maintenance  or  even  other  things  to  do  with  uni.

Kia: Exactly,  exactly.  So  Abigail,  before  we  go,  what  three  things  would  you  recommend  to  someone  that  they  can  do  to  help  them  get  a  little  bit  richer?

Abigail: So,  first  thing  would  definitely  be  check  that  you're  paying  the  right  amount  of  student  loan.  So  throughout  the  year,  checking  in  on  your  student  loan  website  and  that  you're  paying  the  right  amount.

Secondly,  would  be  looking  to  how  many  years  you've  got  left  to  pay,  because  there  might  be  a  possibility  that  you  might  not  pay  the  entire  student  loan  back.  So  with  plan  one,  that's  after  25  years,  it  gets  wiped.  With  plan  two,  after  30.  And  with  plan  five,  it's  actually  40  years.  But  if  you're  in  that  plan  two  area  and  you've  only  got  so  many  years  left,  you  might  not  need  to  repay  over  if  you  are  never  going  to  repay  in  full.

And  then  third  and  finally  would  be  education.  Please  keep  your  education  up  to  date  and  your  knowledge  because  the  plans  have  changed.  We  know  that,  we've  just  discussed  it  today.  But  a  lot  of  people  don't  realize  that  the  plan  has  changed.  And  this  reflects  everything  within  finance  and  money  right  now.  Everything's  changing.  So  yeah,  keep  your  education  up  to  date.

Kia: Thank  you  so  much.  This  has  been  a  very  insightful  episode.

It's  Black  Friday  next  week,  which  means  Christmas  will  be  here  before  we  know  it.  So  in  the  next  episode,  I  want  to  see  if  there's  such  a  thing  as  a  cost- effective  Christmas.  Until  then,  be  sure  to  hit  follow  and  leave  us  a  review.  Thank  you  for  listening.

Kia: Hey, it's Kia and welcome to A Little Bit Richer's very own Christmas special. I know, I know it's still November and I'm mentioning the C word, but part of the secret to a cost- effective Christmas or Hanukkah or just December in general is starting to plan early. It can be the most expensive month of the year. So how do we have a great December while still getting a little bit richer?

With me to unpack it all is Megan Micklewright. Megan was recently named Financial Influencer of the Year 2023, and is the founder of The Savvy Spender, a platform dedicated to financial positivity.

Megan, traditionally there's been a lot of pressure to spend at this time of the year, but we are starting to see people approach this differently. How's that?

Megan: I think a lot of people are approaching it differently, especially with the cost of living now, being more open with their boundaries, setting limits, thinking outside the box, getting creative with presents, making things homemade, doing more Secret Santa. Instead of buying everybody a gift in the family, they're passing it forward to charities instead. I was recently just having, well, say recently, earlier, about an hour ago having a conversation with someone about how my partner's family is so big that they don't end up doing presents because it will cost them an absolute fortune.

There's about 30, 40 of them and instead they just do a Secret Santa. So instead of one person buying 39 presents, it's one person buying one present and it's just so much easier on the pocket, isn't it, getting creative with the way you're doing presents instead of just that generic buy- in for everybody?

Kia: Absolutely. I think, especially with me and my friends, I think for the past five years we do our own separate Christmas celebrations, but we also do Secret Santa because I think when we were younger we used to think, " Okay, got to buy this person, that person." That list just gets longer and longer.

Megan: The list goes on.

Kia: And the price just keeps increasing. But now we decide, right, we're going to do the Secret Santa and you get whoever you get and we have a budget, which is very key because you never know who's earning what. So we just all agree a budget and we all stick to that budget and I think it makes things a lot easier and that way you're almost forced to think more about the gift that you're giving. Especially we've done it where it's only £ 10 pounds is the budget. So now I'm thinking about the person I've got, what would they love that I can buy for them that is within budget or I can make?

My friend made me a lovely notebook that I still use to this day. So I think it really does get you thinking whilst also not breaking the bank, which is really important.

So I want to ask you then, Megan, do you have any advice for those who are having a difficult conversations with friends and family and if those people may have different approaches to the holiday season?

Megan: I think that a conversation doesn't have to be difficult unless you make it difficult. If you go in and feel awkward about it, it's automatically going to be awkward. Tell people, " I've only got this much to spend," or, " I don't want to spend a lot this Christmas, I've got other priorities." At the end of the day, nobody can tell you what your priorities should or shouldn't be. So being clear about it, make sure everyone is on the same page and everyone can respect each other's decisions really.

I was speaking to somebody the other day about Christmas and just saying that even with family members that are very traditional in setting their ways, this is how we do things, it's good to open their mind up to new ways and it's not about saying this is the way it's done and that's the way we're doing it this year. Have a discussion, what do you want to do? What do I want to do? And come into compromises and that way you're all happy.

Kia: I love that. I think this has been a running theme on the podcast about having conversations. I think that's the big thing. We don't always talk about money, so sometimes it can feel as though it's hard to tell people, " You know what? I haven't got the money this year. Or actually, can we change what we do this year?" But I think, like you said, open, honest conversations and it's not as hard as you think it is. It's just as hard as you make it.

Megan: Absolutely.

Kia: I love that when you said that.

Megan: I think with the cost of living as well, the stigma around money conversations is slowly dying because people that never thought they'd be struggling are actually struggling and that's where the stigma's being lost because more and more people are talking about money, which is brilliant really because there should never be a stigma around it.

Kia: Exactly. I completely agree with you. Is there a way to have the best of both worlds? So when I say that, I mean is there a way to have a great Christmas while still sticking to your financial goals?

Megan: 100%, absolutely. You can always have the best of both worlds when it comes to spending money and Christmas. Make sure you've got them budgets in place and stick to them. Talk to yourself, write down in your notes, your notebook, wherever. What's important to you this Christmas? What do you want to tick off? What do you want to do?

Do you really need to go out to eat once a week? Make sure that you're doing what you want to do, ticking them off and your money's going to the important places. That way you are having the best of both worlds. And you can also make sure you're saving money when you are doing those things. Make sure you're using cash back. Make sure you're budgeting for them, book in advance, schedule what you're doing so you can get the most for your money.

Kia: I love that. And I especially love when you said reviewing how you're spending. So do you need to go out and eat every week? Because it's something that my friends and I have also been fully aware of because I think you find when you go to meet people, quite often you meet up with friends and then you're going out and before you know it you've spent £ 40 on your bill. Whereas if you're more aware of it because you want to stick to your financial goals, maybe you say, " You know what?

I want to meet up with you, but let's go for a coffee or let's go for a walk instead." And I think that's some of the changes that a lot of people are making. So it's like you don't have to compromise. You can still have, like you said, the good Christmas, but we can also still 100% stick to our financial goals. You don't have to compromise anything.

Megan: Definitely. And when you're going out, you don't always have to go to these fancy places. You can go to somewhere that's cheap, that's cheerful, it's good for everybody. And if people are drinking and you're not or they want to have a starter, main, dessert, just open up your separate tab. You don't have to split the bill.

And it doesn't have to be an awkward conversation about splitting the bill. Just say, " Look, I'm not drinking today or I'm only having a small starter so I'm going to open up my own tab." It doesn't have to be a big thing at the end of the meal where you're like, " Oh, someone's getting out the calculator." That bit that everybody dreads. Say at the beginning of the meal, " Right, I'm going to open up my own tab because I'm not drinking tonight." It doesn't have to be an awkward conversation. It can be really easy, really simple, and that's the best way to keep it.

Kia: Yep. I'm 100% behind you on that because I'm someone very much so sometimes we go out and I'm happy to split. Sometimes I'm not hungry and I'll tell my friends or whoever I'm with, " Guys, I'm just going to pay for my one thing because I'm only getting one thing." And I don't feel bad about having that conversation. At least people know now, okay, that's how we're going to split the bill. Kia's not a part of that. So whatever I get now, I split between whoever's agreed upon it and it makes things easier.

Megan: I went for a meal once and I don't drink and everybody was ordering cocktails and it was in a really nice restaurant. They were like £ 12 each. And someone ordered lobster, which of course is very expensive. And I was thinking, I'm not drinking. I had a really cheap main. I am not splitting this bill. And I just said, " I'm going to open up my own tab because I've had a really cheap main, I'm not drinking." It was like fine.

And I think as long as you keep it simple, don't beat around the bush with it. It's absolutely fine, but it's about the conversations you're having and the people you're around. You don't need to spend loads to have a good time.

Kia: Exactly. I love Christmas. It brings the spirit. You get to be with your loved ones.

Megan: That's it.

Kia: My favourite time of the year. Not lying. I love it.

Megan: Get out the games, that's what I love.

Kia: Yeah. I love the games and the food.

Megan: And the food.

Kia: All of that. I'm getting excited now. See, I'm getting ahead of myself. Okay, so let's talk about the environment. What is the environmental impact of all of this? How does pulling back on consumerism help?

Megan: It helps in so many different ways. The sustainability aspect of it, the amount of things that end up in landfill, the amount of things that end up just cluttering your own house without talking about the environmental impact. We all end up with so much stuff and we say, " We haven't used that," or, " Why did they buy me that?" I think we've all got a present where we're like, " What am I going to do with this?" And it's being more mindful and thoughtful about the things that you're buying people as well, like you mentioned.

If you've got them budgets, thinking about what does that person really want? And if we're more mindful about it, then we end up buying things that are actually going to be used, which has an impact on our wallets, on the environment, on other people's clutter and decluttering. So it has major impacts in so many different areas.

Kia: Absolutely. I think one thing that I also do is I ask people, " What is it that you actually want?" Because think of how many times, I'm sure you've had it, I definitely have had it, where you've received the gift and you're like, " I cannot stand this. What am I going to do with this?" The person didn't even think about what this gift is, and now you're probably thinking about regifting it or you never use it and it does just kind of clutter up. But I think when you do have that conversation with someone, I mean it's not spoiling it.

You can get people to write on a list. You can pick from that list, so it's still got an air of surprise to it, but then at least you're buying something that that person's going to use or value. Let's talk about gifting then. Does expensive always mean better or are there other approaches that people can take when it comes to gift giving?

Megan: Expensive doesn't always mean better. I guess it depends what you're buying, but there's so many alternatives out there now. There's never just one of one product. There's so many different jewelry brands, phone brands, that sort of thing. And there's dupes as well out there now. You can always get a cheaper alternative.

So expensive doesn't always mean better. It's different if someone's asked for a specific brand or something like that. But always make sure you're shopping around, never just take the first price you see because nine times out of 10 it's not the best. And making sure you're looking for discount codes and that sort of stuff, using cashback where possible because if you are making an expensive purchase, you can still get some money back that way.

Kia: I love that. Cashback, discount codes, all of those things. So, Megan, it's Black Friday this week and that's a time where some people may be thinking, " I'm going to get all of my Christmas presents on that day because so many deals coming out." So I want to ask you, is it actually a good deal? Should people spend their money and use Black Friday as an opportunity or should people maybe hold back a bit?

Megan: I don't think you should hold back, but I also don't think you should rely on it. You've got to remember that these days are put out there for people to spend. They're not there for people to save. They're there for people to spend and it is a good day to check deals, but purely to check deals and make sure you actually are getting a good deal because sometimes the prices are hiked up in the weeks upcoming so they can be pulled down on that day and actually everyone thinks they're getting a good deal, but it's not a good deal. So make sure you are shopping around, look and see if you are actually getting a good deal.

And also remember it's not a saving if you didn't need it anyway. You're actually just spending. So make sure you stick to your list. Don't just get pulled in to all of these good deals and offers that you're seeing. Get rid of the triggers if you need to, unsubscribe from them emails, unfollow people on Instagram if you need to. If you're struggling for money especially and you know that you're going to be triggered by Black Friday, get rid of any triggers. You don't need to spend if there's something that you don't need.

Kia: I absolutely agree with you. When it comes to Black Friday, I mean, I very rarely shop on those days anyway. Cyber Monday, those kind of days. But when it comes to Black Friday or the lead- up to it, I use price trackers. So certain websites will have a tracker, the big websites, and you can actually say, right, I'm looking at this product and it will track the price of it.

And you can also look at historical prices so you can see was it hiked up like you said the week before and now it's just come back to the original price or is there actually a saving if I wanted to buy it? If you get into that habit, you can definitely make sure you're getting the best price for anything you're buying, 100%. Finally, Megan, what three tips do you have for our listeners as they look ahead to Christmas to help them get a little bit richer.

Megan: I've mentioned it so many times, but the first one is definitely being open and honest. Having them conversations with people around you. Nobody's going to know unless you tell them. You've got to be open and honest. The second one will be never take that first price you see, shop around, make it a habit. Get into the habit of looking for cashback, looking for discount codes, having a look on even Facebook groups and things like that.

And the third one is get a little bit creative. Mine Nan, for example, she's got everything that she needs, absolutely everything that she needs. And I know that whatever I buy her, she's not going to use. So I get creative. I make her hampers. I buy her experiences instead. And that can be a lot more thoughtful for the person that you're buying for, but also be a bit easier on your pocket as well.

Kia: I love that. That is so thoughtful. Yeah, it makes you really think about what the person would value. Megan, thank you so much. This has been a great episode and really gotten us into the Christmas spirit.

Megan: I'm feeling Christmassy.

Kia: I'm feeling Christmassy. I'm ready. I'm ready for Christmas.

Megan: I'm ready to go Christmas shopping now.

Kia: I'm ready for everything. I'm ready to look at the food, everything.

Megan: I'm ready for the food.

Kia: We're getting too excited. We're getting too excited.

Megan: Let's not buy presents and let's just buy food.

Kia: Buy food. I'm with you on that, honestly. Thank you so much.

Megan: Thank you.

Kia: This has been a great episode.

Next week I'm returning to a topic we looked at earlier in the series, house buying. I want to focus specifically on the cost of buying your first home and how to save. And don't worry, the words avocado on toast are officially banned. I promise. But while you wait, you know the drill, hit follow and leave a review. Happy Christmas.

Kia Commodore:  Kia again, and this week I'm returning to one of A Little Bit Richer's most important topics, buying your first home. We've talked about the different schemes to help you get on the ladder, but it doesn't change the fact that it's still likely to be a lot of money.

So I'm talking to Hazel Johnston from Legal and General. Hazel was previously a mortgage advisor, and now helps other advisors grow their business, so she knows a thing or two about the cost of getting on a property ladder. So Hazel, let's kick things off about talking amounts. When we talk about saving up to buy a house, just how much are we talking here?

Hazel Johnston: It really depends where you're in the country. As a starter it varies so much, but I'd say it can be a lot of money. You can tell by my accent I'm based up in Edinburgh, Scotland. If I use Scotland as an example, we're looking about 34, 000 pounds roughly as an average compared to London, that jumps up quite a bit.

Kia Commodore: Poor London, that number is always a lot higher, isn't it?

Hazel Johnston: It is, 144,000 pounds on average. So, it can be really tough to get yourself into a position to have those savings for that deposit. And I think as we look at generations gone past, some of our friends were maybe buying properties when rates were a bit better and property prices were lower.

So we are in probably quite a different space to what we were a few years ago when looking at the same sort of properties.

Kia Commodore: Absolutely. I think I make it a point because I'm in the process of saving up for my first house.

Hazel Johnston: Congratulations.

Kia Commodore: Thank you. And I make it a point to have a look at different areas I want to live in. I mean London, as you mentioned, that number is very hefty, so not necessarily feasible for me, but any areas I do look at, I like to go on property search websites and have a look at the sold listings because then you know, it gives you a good understanding of what properties in that area have actually sold for.

Because I mean we can look at what's currently listed, but that doesn't mean it's going to sell for that. So that's kind of a little habit I've got myself into whilst I'm saving so I kind of have a good understanding of how much that's going to cost me, but it is a lot of money. But there are a lot of things that come into it.

So let's talk about mortgages. Maybe you can give us a quick explainer. So Hazel, what is a mortgage, and what are different options that are available to people?

Hazel Johnston: Yeah, so a mortgage essentially is just like a loan that a bank or building society will give you to be able to fund your purchase. Because I think we'd all love to have a couple of hundred thousand sat in the bank to buy these properties, but it's not the case for most of us. So yeah, banks, building societies will lend that money in the form of a loan.

There are lots of options though, so it's not just a case of if you're looking for that set property, you can adjust things on that mortgage to make it affordable for you, such as the length of time, as one example. So that's called your " mortgage term." So you could have a mortgage that's slightly shorter, that will mean that your monthly payments are higher, and you'll pay less back to that lender.

Or you can have lower monthly payments each month for that mortgage by extending it right out and taking it over longer periods of time. So there are different options depending on what your circumstances are and the budget that you want. The good thing with mortgages as well is you can get advice on them.

So, if that's something that you are looking at and you want to have a think about what's affordable for you, then absolutely you can speak to a mortgage advisor and they will be able to tailor your monthly payments to that budget as well.

Kia Commodore: I think it's always good to know that you can get advice. I think things like this, buying a property is such a big purchase that you want to make sure that you are going down the right path for you and you're picking the right options for your situation. So I want to ask you, when it comes to mortgages, how does that actually impact your deposit?

Hazel Johnston: Yeah, so your deposit can vary and that really depends on how much you're wanting to buy that property for. So obviously the more expense of the property depends on area, it's repair, actually the desirability of that home, you are going to probably need a bigger deposit than maybe a property that needs a bit of work or somewhere that's in an area slightly out of a main town.

The more you can afford to put in, then the smaller your mortgage is going to be. And that's always going to mean you can potentially obtain better interest rates in that lender and have a lower monthly payment. But that's not achievable for everyone. We've just seen how much deposits are on average.

So what I would say is sometimes that's where we do see people opting to look at Bank of Mum and Dad. I mean if you look at our Bank of Family research that was recently done, about 47% of buyers under 55 years old had to get support from their relatives to help them get on the ladder.

So it's a hard one. I mean it is hard to save up for that deposit, but what I would say is there are different options out there for people if needed.

Kia Commodore: Absolutely. I mean like I said, as someone who's currently saving it is very difficult, especially when you have this massive number that you're trying to reach, right? Whether it's 20,000, 30, whatever your number is, it's a massive number. So if you have that help from Bank of Mum and Dad or family members or even friends you want to help pitch in, that's great.

But what if you don't have access to that kind of family support? Do those people risk being locked out of the property market?

Hazel Johnston: I'm really interested you used the word " overwhelming," because it can be so easy to feel so overwhelmed looking at the amount, and I was a first- time buyer actually not that long ago, and I felt the exact same. I felt like I was saving forever to get that property. 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 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 your little luxuries really easy. 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 fun fund.

Because that actually builds up-

Kia Commodore: It does.

Hazel Johnston: ... quite a bit over time.

Kia Commodore: It does.

Hazel Johnston: And so I would 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 are all the schemes that are available.

So Skipton Building Society have launched a new mortgage product to really help renters get on that property ladder. So it's a no- deposit mortgage, there's lots and lots of details which I'm sure mortgage advisors could help you with on that, but that's a great incentive in terms of that no deposit option.

And then you've also got Lifetime ISA, essentially getting free money. If you put a thousand pounds in, they'll give you a thousand 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.

And then finally, as I said, I'm up in Scotland. Scotland's actually the only area that still have this, I was speaking to one of my friends who's a mortgage advisor the other day, is the lift scheme. That's something that people forget about and that's run by the Scottish government where they'll give you a percentage of funds towards that deposit in that home.

So it's not just about buyers and purchasers having to do all these different things to try and 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.

So, that really can help people out and we just don't often realize all that's out there.

Kia Commodore: I love that, I think it's so important. I want to talk about then, we've mentioned obviously mortgages, you mentioned deposits, but there are lots of other fees associated too with the home- buying processes, I'm sure you know, having been through it yourself. So what else should people consider financially when it comes to buying a property that isn't just a deposit?

Hazel Johnston: Yeah, so you've got quite a few different fees to consider as part of the buying process. I would say as a kind of first port of call, standard ones like your solicitor fees, potential surveys, and anything maybe that you want to put aside if you want to do up that property. The only way I could afford mine was to buy a property that needed everything done and I had to then factor in, I need some funds to do that property up and make it liveable.

Another expense could be stamp duty, always worth checking because if you're a first time buyer you may not need to pay it, but for certain property values and if you're a home mover moving for a second, third, fourth time, then absolutely it's worth checking how much that stamp duty is. It's dictated by property price and can also be dictated, depends on if you've got secondary properties running in the background.

So it's always worth going on your government website depending on where you're based in the country. And you can type in the " property value" and it will tell you based on your situation how much stamp duty is payable. So I'd say they're your key ones and part of the buy- in process, you potentially need to consider lender product fees as well, depending on which mortgage products you're going to look at.

But again, as I said, mortgage advisors will keep you right. So definitely I speak to them, they'll keep you in the know. And sometimes you can add them onto the loan as well. So you've got options there. But then you've got to think about your more practical living costs as well.

So in terms of the property, you may find there are, if it's a leasehold property, you've got your ground rent service charges up in Scotland, that would be your factor fees. And we're talking about a lot of first time buyers here, but actually any home mover, if you are moving to a new area, it's really worth considering that your commute, nursery, childcare, all these other elements that may change in your life from that change of vocation as well.

And then I would just say if you're looking to save for a deposit to get to that point, it's really, really valuable to think about your finances now and what commitments you're getting into now such as car loans, Klarna's a biggie. It's again, another very big temptation out there-

Kia Commodore: I love the fact that you mentioned thinking about your finances now. Because I mean home buying often isn't, I decided to stay, I want to buy a house, I buy it tomorrow. It is a long- term process, but you've got to factor in, like you said, what commitments financially are you making now that could impact if you did take out car financing that could impact maybe your affordability or just anything that you're committing to that could maybe detract from you being able to get on a property ladder or make it harder for you once you move into that property.

Hazel Johnston: Yeah.

Kia Commodore: Like you said, I mean, who moves into a property and wants to sit on the floor for six months?

Hazel Johnston: No.

Kia Commodore: You want to make sure that you've got money-

Hazel Johnston: Exactly.

Kia Commodore: ... to be able to furnish it. So that's something that you've got to think about now as well as think about future finances as well.

Hazel Johnston: Yeah, and they'll impact your affordability with that lender too. So it's not even just about your own budget and being able to have your lifestyle and at home. If you go on lender websites, there's usually affordability calculators. So if you are thinking of a certain car finance or loan or whatever it may be, just check it, and you can do that on the lender website. It's really easy quite often.

Kia Commodore: I love that, that's really, really good point that you made there. So Hazel, I always end our episodes with the same question, which I'm going to ask you now. What three tips do you have to help people get a little bit richer?

Hazel Johnston: My first one would be talking about that comparison piece. So I don't think you'll ever feel richer if you're always competing to others. There'll be people that aspire to be where you're at and you'll probably also always be aspiring sometimes to where other people are. So I'd say that first one is just celebrate the small wins, even if you've managed to save a 10er, that's a 10er more than what you did yesterday, so celebrate those.

Secondly, I would say think about stabilizing your income. We do sometimes see people suffer illnesses or have to take time off work. COVID was a massive time for that. And what you don't want to have to do is to dip into those savings you've worked really, really hard for. Take out things like products, like income protection policies and it's a little bit of a safety net just in case you fall ill, you don't want to have to touch those savings that you've really worked hard for.

And then the third one is seek industry help. Take advice from experts, whether that's estate agents, mortgage advisors, solicitors, ask around because everybody's been there for the first time at some point if they want a property. And I would just say, always ask.

Kia Commodore: Hazel, thank you so much. That has been really, really good tips, especially celebrating the small wins. I think sometimes we always have a big goal, but you can celebrate the small milestones as we get there. So like you said, I'm going to celebrate the fact that I'm saving.

Hazel Johnston: Yes, please do.

Kia Commodore: That's what I'm going to take home, I'm going to let all my friends know I'm saving. This is the small goal I want to celebrate. And I think that'll keep you motivated as you keep going.

Hazel Johnston: Definitely it does.

Kia Commodore: So thank you so much-

Hazel Johnston: Thank you.

Kia Commodore: ... for coming on. This has been such a great episode. So thank you so much. Next week I'm taking a look at things women specifically need to know about money. If you're not a woman, don't hit " skip." There'll still be some highly tips for you too. I promise. Don't forget to follow and review the podcast and I'll catch you next week.