We welcome the self-employment digital pension specialists, Penfold and Money and Mindset Coach, Laura Ann Moore, to teach us a thing or two about our finances. In this hour-long webinar, Rachel from Penfold, who has 15 years of experience in financial services, and Laura guided us through the Three Steps to Improve Your Financial Wellbeing and in particular, the art of mindful spending and saving.
Rachel joined us as Penfold representative who has spent a lot of time specialising in pension products and marketing, while Laura is also a personal finance blogger, YouTuber, speaker and educator. She talks all about personal finance to help people transform their relationships with money.
Together, Rachel and Laura set out to demystify the confusing parts of finance so that people feel financially confident and can live their best lives today while planning for their future.
In this two-part article, we will guide you through the three crucial steps to building a financially rewarding life:
Step one: your money story
Step two: mindful spending practices
Step three: future-proof your pensions
What is your money story?
To discover your personal money story, think about your beliefs about money and how these beliefs have shaped the way you think about money. Do these beliefs serve you? Laura encouraged us to acknowledge these beliefs and let them go:
I am sorry, I forgive you, I forgive that thought, and I let it go.
Regularly doing this affirmation technique can help you get rid of beliefs that no longer serve you and set up new habits and thoughts that will serve you more in the future.
Mindful Spending with Laura
“I don’t know where my money has gone!” This phrase is something we say and hear all the time.
Life can feel overwhelming and as if you’re not in control of your money. On the other hand, mindful spending is about flipping the switch and being the ones who are in control of our money.
With all the money that we make, you can choose to save it, spend it or invest it. There is a lot of pressure to save and invest, and we often overlook the importance of spending our money and assume that spending is “bad”.
Laura tells us to “see money as a powerful tool and resource to help us do things now and in the future.”
Now is the time that mindful spending comes in – it may stop you from making those impulse purchases that you later regret (think of all the times you spend money due to an emotional trigger, and then those purchases don’t align with your budgets and values). Mindful spending will mean that your spending aligns with your financial values. For example, look at your bank statements – what are you spending your money on? Does this align with your values?
How to implement mindful spending?
Laura introduces a set of questions to run through before making a purchase, and you can do these at any point, anywhere, whether that is online spending on real-life spending.
Before making a purchase: ask yourself about:
The affordability? Think about whether the spending is realistic or not and if you have the budget for this. Can you clear this on your credit card straight away?
Need vs want? Do you need this item or is it just a want – for example, are you buying it because it’s on sale?
Your emotional state? How are you, when you are spending money? Spending can be addictive, and we get a lot of fulfilment from the act of spending (it’s not always about the item), but we cannot alter our mood with our purchases. Even though it may make a difference at the time, this feeling will wear off! Become aware of this and how you are spending your money, and this will allow you to choose whether or not you want to give in to your emotions. Ultimately, you will be able to change the emotional triggers around money and spending.
Does the purchase take you further or closer to goals? Does the money you are spending align with what you want in the future?
Wait 72 hours and think about it – do you really want it, can you afford it and can it positively impact you?
Financial Goals and mindful spending
In life, you want your day-to-day spending to align with what you want in the future.
Whether these are short, medium or long-term goals, it’s a good idea to think about the future. For example, short-term goals may happen in the next few years (for example, booking a holiday, buying a new laptop etc.). In contrast, medium-term goals will take about 5-10 years (including buying a house, quitting your job and setting up a business), and finally, longer-term goals may take 10+ years to think about and may include your retirement.
Be aware that your goals can change over time, but it will help you spend your money when you start thinking about them. You will become more likely to spend your money in a way that aligns with your future goals. For example, are you spending money on your future self? e.g. spending money can be part of investing and saving for you in the future.
Take some time out each week, get in a good mindset and space and re-evaluate your goals and finances at the time.
Work your way up slowly and regularly check in with your finances. It can also help if you write down your finances, goals and thoughts in a journal or on a tracking sheet to visualise and be aware of where your money is and how much money you do have and where you need more.
The balancing act
As creatives, entrepreneurs or something with a side hustle who seeks to go it full-time, there is a delicate balance to strike. Investing in your business is essential, but when are you financially stable to take these risks? How can you save for your future when you need to spend and invest in your business?
Laura brings it down to our mindset: it’s very easy to get used to the reliable monthly payslip, and going it alone demands a real shift in perspective. Having an emergency fund is essential and will mean you are not too worried about the immediate future.
Laura also comments that doing some journaling about your beliefs around your money can help challenge any ideas that may no longer serve you. For example, many people believe that “you have to burn out before making any money”, which is not realistic or healthy, so learn about your beliefs before starting so that they don’t end up restricting you in a business capacity later on.