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Good Money Week: Holly's 5 Financial Tips

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This year UKSIF launched the free to download resource 'Women’s Guide to Investing', which features top tips from a variety of financial experts on how Wary Women can begin to make their money grow. UKSIF want to encourage female investors because,

when women invest… the world wins.  

 

Our CEO Holly contributed these five quick tips to help busy women improve their financial fitness fast.

 


 

Without wanting to wheel out clichés, there are lots of reasons why today’s modern woman is just a bit too busy to get everything done. But ‘investing’ a bit of time in your finances really is something we need to prioritise. Sticking your head in the sand, combined with career breaks, juggling family commitments, smaller pensions, and the odd sexist boss who doesn’t pay what you deserve can mean that women finish their working lives with less in savings than the guys.

Here’s what to prioritise when time is short.

 

1. Saving and Pay Yourself First

The best tip is to save as often as you can, as much as you can and as early as you can. Easier said than done in the hurly-burly of just getting through the week. If you’re like me, the key thing is to set up a direct debit to automatically chip in little and often into a savings account. Interest rates aren’t that exciting these days, but it’s still worth shopping around as current accounts are mostly pretty weak. For example, the best rates around for 12 month fixed term deposits are about 2%, the best easy access rate cash today is 1.3%. ISAs are basically tax free savings accounts and are often a good place to start – more on that later. Pay Yourself First is a great rule and feels relatively painless. This is how it works. The next time you get a pay rise, automatically set up (or increase) a direct debit into a savings account. Decide an amount which feels achievable - can you put 30% of the extra monthly money into savings for example? The key thing is to do it before you have mentally accounted for the extra money and before you miss it. So set up the direct debit to be siphoned off on pay day.

 

2. Watch debt

Such a simple tip, but make sure you have direct debits set up to clear the minimum monthly repayments on credit cards. These can be set up in a matter of minutes and save you an accidental broken credit record and unnecessary interest. There are also lots of 0% credit card transfer deals out there, so if you have racked up a balance then think about transferring it rather than hanging around losing money.

 

3. Don’t be afraid of the stock market

Women are statistically more likely to avoid shares and say that the stock market is like gambling. But behind all the BS, shares are simply a way of harnessing your lot to the world’s biggest companies. You can own a tiny fraction of FTSE 100 companies like ITV, Just Eat, Apple, Ocado and Unilever. As for returns, a parcel of shares has made more than cash (money just kept in your current account) 9 times out of 10 over any 10 year period since stock markets began. Stock markets began hundreds of years ago so the outlook is pretty good. The key is not to charge into bonkers stuff like Bitcoin along with the latest headline. Buy quality companies which do things you understand. There are great digital services these days which will effectively choose and manage a variety of shares for you, a bit like buying a mixed case of wine. Lots of providers have online quizzes which will recommend a blend of investments which suit your wishes, needs and attitudes. People who live on their phones will like Wealthify. Those who want the low-cost, easy, big brand option should look at Vanguard. Nutmeg is another easier option. At least try out the quiz with firms like Nutmeg and Wealthify – there’s no obligation to do anything at the end but you’ll see what’s involved, what you could make and pick up some tips along the way. Our Boring Money Best Buys pages will let you pick the best options for your confidence levels and see how other investors rate each service too. There is one caveat, though. The stock market is only worth considering for savings which have at least a 5 year timeframe. History shows that long term it’s a fairly safe bet, but the ride can (and almost certainly will) be bumpy – so you don’t want to get stuck in a position where you have to cash in when your position is in a downward blip. If this is a short-term savings amount, then stick to cash and make sure you don’t just leave it in your current account. Check out the latest Best Buys for cash on sites such as Savings Champion or This is Money.

 

4. Don’t roll your eyes about pensions

It’s true that they are typically about as interesting as watching a tortoise hibernate. But there’s a wonderful thing called ‘compounding’. This is like making a snowman – it’s ridiculously hard work at first for very little gain, but the bigger the snowball gets, the quicker it grows. It’s the same with your money – which is why sticking aside £25 or £50 a month into a private pension from an early age makes a lot of sense. And here’s another tip. You get free money from the Government. If you’re a basic rate taxpayer, you get a free £20 for every £80 you put into a pension. A higher rate taxpayer? Claim back another £20 on your tax return too. Again, you can set up a pension online these days and it doesn’t have to be overly complicated – check out Boring Money’s Best Buys, and use the filters to see which option might be best for you.

 

5. Trust yourself!

Over years of consumer research at Boringmoney.co.uk, we’ve seen that women are less confident than men when it comes to investing. However, what we also see is that women are, on the whole, more successful investors than their male counterparts. We’re less likely to fiddle. We don’t charge in and buy/sell individual shares based on the latest news nuggets. Instead, we accept that things will go up and down, trusting that the overall trajectory will be positive – which 9 times out of 10 it is (remember: a parcel of shares has made more than cash 9 times out of 10 over any 10 year period since stock markets began hundreds of years ago). So have a look online and don’t be put off by all the jargon. This isn’t an Old Boys game.

And why should boys have all the funds?

 


 

If you're a potential female investor who wants to know more but doesn’t know quite where to start, maybe give our ‘Wary Women’ tribal page a read.

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