From Pension-panic to Savings-savvy: Emma-Lou explains
by Becky Balfourth
THIS WEEK’S PODCAST GUEST
Feeling out of control/ out of depth/ confused by money? Maybe your savings and investments are falling by the wayside as you struggle in the day-to-day?
Emma-Lou Montgomery works for Fidelity International. She can tell you that you are definitely not alone with these feelings. As a journalist, Emma -Lou has commented on news and radio shows on the world of finance. She also worked on the Fidelity Finance Report. From the findings of that report, Emma -Lou can tell you for nothing that women often feel stressed by money. There is a massive gap between women and men- which is revealed by an 11% gap between male and female pensions, with men coming out ahead.
Women tend to put life, family or work ahead of saving or investing. It’s easily done, when daily life leaves you with so little time… but if you leave it too long, you could be left with nothing for the future.
But it’s not all as bleak as that. For one, that 11% gap can be bridged by a saving of just £35 a month. And right here are some ideas on how to get you there:
1. Start your pension as early as possible, and put away as much as you can.
Your age ÷ 2 is the percentage of your earnings that you should be putting away each month. So at 30, 15% of your earnings should be safely stashed for the future. There are some great pension calculators online if you’re still stuck.
2. You have time.
Women in particular struggle with this. Maybe you’re part of the “sandwich generation”- looking after kids and older family at the same time. Maybe you’re self-employed (we’ll come to this later). But the reality is, you can make time for this.
3. Set up your year in “moments”, for example:
January- Yearly money budget planning.
April- Assessment of savings, and planning for the financial year.
October- The month to think about reducing bills, making sure everything is as well-priced as it can be!
Investment doesn’t have to be scary! In fact, cash is riskier than stock these days, as cash is basically guaranteed to to lose value over time. Interest is around 1- 1.5%, while inflation is 2%.
If all this baffles and unnerves you (and again, you wouldn’t be alone), invest (haha) in an investment tracker. These can be found online, and are essentially indexes tracking the stock market. This is like following a recipe, rather than grabbing random ingredients and hoping to make a cake with them.
5. For the self-employed: price yourself right.
Unless it’s just one of those nights, we don’t head to the supermarket for the cheapest wine, right? We aim at the high end of mind-range. Be a bottle of wine. Think about your expertise, and what it’s worth- and also think about what you lose by being a freelancer (annual leave, sick pay, some security). Then price yourself accordingly. You deserve to be valued.
Finally… did you know?
That you can set up a direct debit to your pension provider? All banks have this function, and it allows you to plan for the future- you can even set up pots!