Alexandra isn’t afraid of money. Like the marathon she just finished, and the year she took off work, she understands that sometimes you just need to put the work in, take a risk, and be patient.
My relationship with money: "Sensible"
"I think it’s about the way you’ve been brought up with money, basically. I’ve always known what money is worth. Saved from an early age. And I’m sort of careful with my money, so I think that makes a difference."
I'd love to know more about investing and pensions
"I haven’t dabbled in stocks and shares before but I really would like to, actually. I just don’t understand it or know enough about it, really. But I would. I definitely would. I think it just sounds fun! Kind of like gambling but not. I’d only invest what I could afford – I’m sensible like that – but I’d be happy to sort of gamble a bit. Saving is just a bit boring sometimes.
"First I’d like to know which ones to invest in and how much I could lose, and what the risk is. How much you need to invest. A basic step-by-step guide would be good.
"Same thing with pensions. I have a work pension – a final salary pension. But to be honest I don’t really know much about it. I know it’s a good one, and I know work pays a percentage and it’s tax-free. But I don’t know what I’ll have to live on when I retire, or how much I need. But I don’t really like to think about that cos its quite far off… well, not that far off actually."
With some forward planning, I took a fab year off work
"I took a year off work to have a break, really. See if there was anything else out there I wanted to do. Volunteered at the Olympics which was fab. I had time to do all these things. Time is worth more than money, I think.
"I did a lot of little jobs but I wasn’t getting paid as much as my normal salary, so I had to really budget and make sure I had savings in place. I had to make sure I knew exactly what my outgoings were and how I would cover them, so I had to do a bit of forward-planning for that.
"I just sort of looked at all my bills and made sure I was paying the least amounts – moved to the cheapest Sky package and cancelled subscriptions and things I didn’t need – and that was that. Then figured out what I needed and just worked for that. I got an interest-only credit card as a backup. And I knew if I struggled I had my salary to go back to after a year, so I would always be alright."
Talking about money can be taboo, but it's so useful
"We never talk about salaries. Never talk about savings. But we talk about money we haven’t got. The lack of money! And how to make more money.
"We’d give each other advice around budgeting and things like that. Some people haven’t really got a clue when it comes to that sort of thing. For instance I have to help one of my friends cut down his bills every month. I just said to him, “What are you paying on your phone bill, your broadband, maybe you can go to a cheaper provider”. Just get down everything he pays for and see if he can cut them down.
"I’ve got some friends who are really organised – they know what they’re going to get from their pension (https://www.boringmoney.co.uk/learn/learning-paths/retirement-guide/)and how many years they have to pay in and all that. They tell me about theirs but I haven’t actually asked them about mine. I probably should, actually, I’m always saying I will. I’d like to talk to a financial adviser too to see if I could be doing better, with investing and everything. In the future."
My biggest money question...
"I don’t have any dependants so do I need life insurance? What should I do with my money after I’m gone?"
Answer by Tina Weeks, Serenity Financial Planning
Life cover is (mostly) a lump sum that is paid out on your death. It is only necessary if money will be required after your death. Often, life cover is put in place to cover debts and dependants. If no one will be financially disadvantaged by your death, you might not need life cover at all.
It is completely up to you who benefits from your estate when you die. You can choose to leave any of it to any person or any organisation or charity. Many people choose to use their money for philanthropic reasons but it really is up to you. Your wishes can only be carried out if you leave a Will reflecting them. If you die intestate (without a Will) then your estate is distributed as per the rules of intestacy.
+ Holly Mackay's view
By Holly Mackay, CEO of Boring Money
Just as food for thought... I once sat in a meeting with a financial advisor who had done a ‘cashflow modelling’ exercise with a client. Which basically looked at what money would come in and what would go out – and how much would be left.
This costs between about £1,000 and £2,000 to get an advisor to fully model for you. The nice thing about this meeting was that the advisor was telling this lady that she could in fact spend more and build that studio in the garden she had always wanted. If you know what the future looks like, it’s easier to plan. Maybe you could spend some of it!? :0)