The HNP Guide to... Money

Money makes the money go round, sure, but it also makes us squirm - so much so that we not only avoid having these conversations with our friends, but ourselves, too. 

But, according to Lisa Conway-Hughes, financial advisor and blogger, this bad habit needs rectifying, stat. ‘Being in good financial health - or at least being aware of where you’re at is essential,’ she tells HNP.

‘People need to do less worrying and take more action,’ says Lisa. See below for her five ways to get back in good financial shape and, ultimately, get what you want.

1/ Face up to where you’re at 

The first step in getting better is acknowledging where you’re starting from. ‘Create a spreadsheet of what you have, what you owe and work out what your net worth is,’ Lisa suggests.

Thrown by the Forbes-esque lingo? No need. ‘It just means what you worth after you’ve paid all your taxes and debts,’ she continues. ‘It does really doesn’t matter whether it’s negative or positive, you just need to know your starting point.’

Then it’s time to make an (honest) budget, to plot what’s coming in and going out month-to-month but also annually - you can download templates from Lisa’s site.

2/ Think: where do I want to be?

Financial freedom looks different for everyone, so this is essential. ’Think about when you’d choose to retire; what career you would have; whether you’d like to work part-time or full-time; whether you want to own property,’ suggests Lisa. 

But it’s more than that: money is a way to make the things you want a reality, so Lisa advises spending some time thinking on these, too. ‘What makes you happy? What do you like to spend your money?’

‘You can cross-reference this with your budget and financial goals and plot out your plan the way,’ she adds. ‘Think: where are the holes? How much money do you need for each chunk?’

3/ Structure your saving

‘You need to build three buckets,’ says Lisa. ‘Your short term cash in the bank that is your emergency savings; your medium term pot which is one you don’t need in the next 5 years but can be invested and provide a nest egg for maybe 10-15 years down the line; and your pension pot.’ 

You don’t need to funnel tonnes of cash into each, there just needs to be something going into each one. ’Set up a combination of direct debits so it’s out of your hands, and factor in how much you can spare month-to-month when creating your budget.’

4/ Keep your eyes open

Maintenance is as important as doing the initial work. Lisa suggest checking in every three months (or, if you’re leaning in to the lexicon, ‘quarter’) to check that you’re on track and whether these goals still work.

Lisa suggests roping in a friend as a sounding board: ’I have a money date every third month with my friend,’ says Lisa. ‘We’re open about what went well, what went wrong and help each other get some clarity on what we want out of life.’

5/ Trick yourself sensible

Got good intentions but your hard-earned cash ends up re-transferred back into your spending account each month?

Do whatever it takes to reinstate some of the boundaries that have been removed by our technology and our ability to move our money with a few taps of a smartphone screen.

‘Cut up the non-spending account card, or never take your credit card out with you, or commit to only doing online shopping one day of the week,’ Lisa suggests.

‘I put my savings out of mind in an account that I don’t know the internet password to - it’s about so much more than having discipline.’

[CREDIT] Money Lessons by Lisa Conway-Hughes is published by Penguin.

by Claudia Canavan & Roisín Dervish-O’Kane, @allupinyourfeelings