I’ve studied health and science for many years, but I have absolutely no education when it comes to money. I didn’t study business, or marketing, or accounts at school. I studied science, science and more science. I had assumed what my dad said to be true, get a degree, get a profession with a good pension and buy the most expensive house you can afford, which will then go up in value. This, I was told, is the key to a good financial future, no need to worry about money- if you do these steps it will work itself out. Well, that may have worked for the baby boomer generation, but I've done as I was told and it isn't looking like those rules still apply. Now I’m in my 40’s and retirement is still at least 25 years away (probably longer) and I’m starting to wonder if this was a good plan after all? I mean there were worse plans, and lots of my friends are in worse financial positions, but I'm not sure I can keep doing my current job until I'm 70. Even if I can then I'm not convinced the pension will be enough!
I have recently changed jobs and in my current job I work with community nurses who see elderly people in their own homes. I have become very aware of the cost of care that people need as they get older. I had assumed that it was all provided by the health and social care system, but that is just not the case! It made me realise how very unprepared I am financially, and I have no idea what to do. I realised I needed some help!
So, I decided this year I really want to educate myself about money. I have been reading books, listening to podcasts and generally doing some research. As with all things, the more you know, the more you realise you don't know, but that's OK. Everyone has to start somewhere and while I'm a little late to the party, it's better late than never!
One book I read recently was Love your life not theirs, by Rachel Cruze.
Rachel is the Daughter of the famous Dave Ramsey. Some of my earliest money research led me to look at his money philosophies, such as paying off debt and using a cash envelope system. When I saw this book in a charity shop I just had do buy it! In this book Rachel talks about her 7 money habits:
Avoiding comparisons
Steer clear of debt
Make a plan for your money
Talk about money
Save
Give
Avoiding comparisons is so important, in all aspects of life, not just money. How people present themselves is not always a true reflection of their actual lives, especially on social media. Rachel gives some good examples of where people can appear to be very wealthy, with fancy cars and designer clothes, but this can all be purchased on credit and they could actually be very heavily in debt. You never really know another persons situation so it is best not to try and copy them. Make your own decisions about what is important to you.
Now as you will know if you have read my "No spend November" post I have only just started reading this book very recently. I haven't yet had chance to take any serious action yet, but I will make it my mission to do this. Pretty much every book/blog/Instagram post I have seen about money so far agrees that having a budget is important, and this book is no different. Rachel uses a similar system to her dad, by allocating the money at the start of the month into a number of different categories, although she uses clips instead of envelopes. The reason I have never done this before, despite hearing about it over and over again, is that it just seemed so tedious and miserable! Rachel reframes the task of budgeting so that instead of it feeling restrictive, it is freeing. You are giving yourself permission to spend. Not free spending on everything all the time and keeping your fingers crossed it will all work out alright at the end of the month, but you get to pick the categories that mean a lot to you and allocate a sizeable chunk of the budget to that (Rachel chooses clothes for example). That way you can spend that money guilt free, and by allowing yourself one luxury it is easier to pinch the pennies in other areas without feeling restricted. I really like this idea and if I could I would like to thank Rachel for being the first person to make budgeting actually sound fun!
What is so good about this book is that she talks about how to do this and the importance of having agreement with your spouse. She talks through the different types of personality (for example a planner or a partier) and explains how to approach money conversations depending on which personality type you are. The book is full of good tips on how to communicate effectively about money, and the benefits of doing so. I think it will be really useful once I put it into action.
My favourite bit of the book by far was the last section, about giving. I don't want to spoil it if you are thinking of reading it, but some of the stories she tells in that section are truly inspiring. All I will say is I highly recommend it, it is a great read even if you aren't interested in money!
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