Financial wins and resolutions

We think women need to talk more openly about money. Be embarrassing or confusing. Join the conversation. We'll be discussing a whole range. Hello and welcome to another episode of the AJ Bell Money Matters Podcast. I'm Laura. And I'm Danny, and since it's January we can still talk about all things new year, and that includes giving you the dish, the tea, the gossip, whatever you say, on the financial resolutions. Of the rest of the money matters tea.

And for a little bit of extra added spice, we've checked back in to see if any of them managed to follow up on the resolutions they made last year, holding people accountable. And we are not afraid to let you know if they didn't manage to achieve those resolutions. I absolutely love digging into other people's financial lives.

and as well as giving me a little thrill,'cause I'm poking my nose in, I do also find that I pick up some really simple but often really useful tips that I can then Well, try and put into practice to make my own financial life run a bit smooth. Now Danny and I have already shared our wins and resolutions on social media. You can check those out at AJ Bell Money Matters on Instagram.

So we won't dwell on those, but we also got Charlene, Jenny, Emma and Helena on the team to share their tips and tricks and confessions with regard to whether they met their 2024 goal.

And I will think that we should start looking back before we look ahead to the new year. Does that work with you? Yes, because that gets straight into whether they were able to put into practice the goals that they set. I'm going to start with Emma because her resolution for last year was all about something that we often talk about on money matters and that was to give herself a financial cushion and emergency pot just in case. She was hit with some unexpected bills.

My 2024 financial win is actually something that I committed to on the podcast last year, which was to save up a cash emergency fund. I said I was going to put aside a certain amount each month and I did. So that means that I had like a nice cash buffer set up for emergencies, which really put my mind at ease recently because my cat had some very expensive fat.

Great news. Score one for the Money Matters team. And actually having an emergency pot is a savings goal and a resolution of lots of people out there. So this is having that Pot of cash that you can access if you need to. Um, if an emergency hits or you lost your job or some expensive bill comes in, like vet bills, um, the recommendation is that it's three to six months worth of your expenses.

But for some people that can seem like a pretty lofty amount. So I think if you're going into this year with renewed vigour to boost that savings pot, just go for putting away as much as you can each month and seeing that pot build up and up. And it's just a very good thing to have that cushion if something did happen.

I managed a little bit of a cushion last year but then spent it quite quickly and like Emma I've also had to deal with really expensive vets bills over the last few weeks for my dog, thankfully. I did get most of it back from my insurer, but I completely get it. And this next one as well from Helena, I can totally relate to because she's often spoken about struggling to find all of her paperwork, which suddenly becomes vitally important.

As you get closer to the date that you need to file your tax return. We spoke about that on our last episode, so if that is you, do take a listen back. But no issues this year for our founding ambassador, Helena Morrissey. My financial win for 2024 might not sound like a giant stepforeman kind, but for this particular woman it was a big leap forward. And it involved organising all my financial documents into one file ready to do my tax.

And that meant that instead of rushing around trying to find things that really had eluded me for many months in January, very stressed, I was able to complete the return in November. A small step, but an important

Now I actually have a cupboard now where I stick absolutely every bit of paper. They are not filed. They are not organized, but they are all in the same place. Oh, I have a funny feeling, Laura, that your organized soul would probably scream if you looked inside my cupboard of paperwork. Yes, but every organized person has their flaws and mine is paperwork. I have a similar cupboard where I just shove all of the mail that I think will need to keep. And it's in no way organized and it

gives me a small heart attack each time I open the cupboard and then I close it again and don't worry about it. So that is definitely my weak spot. I'm probably something that I should adopt for this year actually being better at sorting the post out when it comes in, stuff I don't need, stuff I need to shred. ac mae'n bwysig iawn, mae'n bwysig iawn, mae'n bwysig iawn, mae'n bwysig iawn, mae'n bwysig iawn, mae'n bwysig iawn, mae'n bwysig iawn.

It is, but then my mum's just started and this sounds quite morbid, but it's really important. She's just started um thinking about her will and you know what happens when she passes on. She's now in her late seventies and a lot of her stuff is now digital and it's like, well, how do you find it? Where do you know where to look? So she's actually started making a list

of everything that she has, where it is, and the passwords that go with it, so that we then have access to it, which is also quite smart. But my um paperwork cupboard actually seems to be getting bigger because I have kids who are older now and If I had a penny for every time one of them says to me, Mum, can I have my national insurance number? I would be absolute well, I'd be going on holiday, I I have to say.

Yeah, before I had a kid, I think I was much more organised with paperwork. So I'm gonna blame her and the lack of time I have that. But it is important for all of that, tracking down lost pensions or the all-important council tax bill or stuff that you need for your tax. My financial win from 2024 is getting my pension Year where I was a freelancer, a year at another company, and back at AJ Bell, and I wanted to make sure that my employer was paying the most it could. So that's been a real win.

Do you know it's really interesting that Jenny was talking there about um making sure that she was taking advantage of the matched contributions from her employer, our employer, um and that, you know, when that changed she was then upping her pension contributions to make the most of it. And I spotted a story in the papers last week, I'm sure lots of people may have seen it, about how half of Savers have never upped their pension contributions from when they started out.

ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud ymwneud. Yeah, and we know that auto enrollment where you're automatically put into a pension um when you meet certain criteria and you you've been with your employer for a bit, um we know that that has been great at boosting pension contributions and boosting people's involvement in pensions.

But the minimum limits that are set for auto enrollment just aren't gonna be enough to provide an income for retirement and so It's something that we definitely need to periodically look at. Obviously, if you're contributing to a pension, you're putting money in, great, pat on the back for that. But equally we need to think about

Is that going to be enough for retirement and how can I increase that? So it's a really good idea firstly to check how much your employer will match your pension contributions to, because if you're not exhausting all of that, then you're kind of leaving money on the table. You're not going to get that money. elsewhere. So it's a really good idea to maximize that if you can afford to. And then it's good to look at, you know, if you've taken any time out of your career, if you've got any gap.

or if your pension point might be a little bit behind because of career breaks or part-time working, it's really good to think about how can you increase those contributions, how can you boost Um and then for self-employed people, obviously they don't have an employer offering that incentive to put money into their pot. So it's a really good idea to think about.

Are you paying into a pension? How can you set up a pension? And even start by putting a little bit away, particularly if you're younger, that will really grow over time thanks to investment growth and compounding. And you might be surprised by how much. Even smaller contributions can add up to be and anything's better than nothing, isn't it? It absolutely is. Yeah, absolutely. Let's end with Charlene's win, and this is one many people will have considered.

So my financial win for 2024 was fixing my energy tariff. It very much was a case of you know practicing what I preached. So I sat down, did a bit of research on what I was pegging and what was out there. Now what was out there from my provider was actually slightly higher of course than what I was paying on a standard variable tariff, but I was prepared to fix a slightly higher rate because I did think prices were going to go up by more than that.

Now we saw the energy price cap go up in October by 10%. I haven't saved a whole 10% because the energy price cap is just that. The maximum providers can charge. It's not necessarily what they all do charge, but now looking back after this cold snap, I'm satisfied that we have saved quite a bit of money. Go up so off gems latest price cap came into force this month, and so we've seen the average household bill um increase that's on the price cap up to around£1,738 a year.

Now, what's interesting is lots of people think that this is the maximum they'll pay. It's not. The energy price cap is a cap on the price per unit of energy. So if you live in a big, drafty house or there's lots of people in your household, um then you will pay more likely. Whereas if you live by yourself or you live in a smaller property, then you'll pay less than that average most likely. But it really depends on, you know, how much you're cranking the heating on, how many

electrical devices you have plugged in, how many hot showers you're having each day for hours at a time. Danny, you're a mother of teenage girls, I'm sure that is Something that jacks up your energy bill. Oh, they have a bath every night, it seems, at the moment. And you just think first of all, shouldn't you be conserving water? But also you can hear the heater on and you just think, Yeah, that's costing me. You can hear the pound signs ringing up.

Um, but it's definitely worth looking at your energy bills. I think we've all got so used to, you know, the price cap being in place and that being the best offer that's out there. Actually, energy companies now are offering some switching deals or some fixed deals. Um and it's once again worth just looking at that. Don't rush into it. Make sure you're kind of weighing up.

Um and there's lots of good guides online. Money saving expert is particularly good at this, kind of giving you a guide as to whether what your energy company is offering you is actually um a good deal or like Yeah, because um we know that um there'd been talk that energy prices were going to keep coming down, but actually when we get details of the next energy price cap in February, which will tell us what bills are going to do from the first of April

It looks like they're gonna go up. So we had um the respected forecaster Cornwall Insights, who's often quoted in in the newspapers and online. They think the average bill's gonna rise um by nearly three percent from April to£1,785 a year. Again, that is the average, so um obviously it is capped per unit as Laura says, but

Although it's likely to hold steady in the summer, it could then drop later in the year, but only a little bit. So it's really important to sort of get a gauge on where energy prices are going to go. But for the certainty of what you're going to be paying month after month, I think sometimes It's worth fixing just for that.

even if maybe you pay a little bit more over time just so you know exactly what you've got to pay out every month and there are no surprises. Although, you know, in the summer Hopefully it'll be cheaper. Um you won't use quite as much energy. Um certainly last year I decided to fix and uh was really relieved when I did so.

Yeah, it takes out that element of uncertainty, doesn't it? Like you say, which if you're into kind of budgeting and working out what your costs are gonna be, gives you a lot more.

But before we move on to the resolution side of things, I think it's only right that we share our big wins. And Danny, I know you did something that you said you wanted to do last year. Yes, so I managed to persuade both my teenagers to open digital savings accounts. So they're actually putting money away every month

uh into a savings bank account uh and it happens automatically. But also my daughter's child trust fund, she turned 18 and we'd never done anything with it. We're like a lot of people. one point four billion pounds belonging to seven hundred and twenty eight thousand people. is apparently ready to be claimed now those people have turned eighteen. That's according to the Share Foundation, which traces lost child trust funds.

'Cause the average amount is estimated to be about two thousand pounds per person. Um well I managed to persuade my daughter to take hers and put it in a stocks and shares ISIS. So she didn't automatically just blow it on a holiday, which she wanted to do but was persuaded not to. And now she's also set up a um a direct debit where she pays in every month into that as well. Wh I've sort of said potentially goes towards buying a house when she's ready or whatever she needs it for.

But if you are one of those 728,000 people who have a child trust fund that is ready to be claimed, but you've not and you've lost it, Um there are lots of handy tools out there and HMRC has one which if you Google Lost Child Trust Funds, HMRC, it'll come up and You just need, if you're over 18, your national insurance number and HMRC can tell you where the fund was opened.

If you are under 18, then your parent can have a look. If your child doesn't have a national insurance number yet, then you can still use the tool. You just need the full name, address, and date of birth. And just make sure when you're doing that that you're definitely on the gov.uk website because unfortunately, as with all of these things,

There are people out there that would like to take a chunk of your child trust fund for finding it for you, and other just outright scammers out there. So just make sure that you're going on the right website for that.

Um but great win there, Danny, teaching the next generation about saving and investing. Um what about all of the subscriptions that you said you were gonna comb through and maybe try to cull to save some money? I did it. I did. Honestly. I got rid of um Disney and then at Christmas time I got Disney back again and Paramount and suddenly I have more subscriptions. than I have before. So it is time for another purge, I think. But what about you, Laura? What was your big win?

So subscriptions is definitely something I need to look at this year. I should add that to my resolutions because you're right, they just kind of build up without you thinking about them. Like the other day I realised I was playing Um but my my uh big win last year was that

We were taking a big trip at the end of the year and it was just really about saving for that and setting aside money, making some sacrifices along the way um to get to, you know, a particular pot of money that we wanted to get to to have a great trip. Um, it was a bit tricky at times. It definitely made me analyse some of my spending and some of my

Dare I say a wasteful spending? Um but I think it was a really useful exercise to kind of analyse um that lifestyle creep that we talk about sometimes. So that was a very good win of last. Lifestyle creep, it is so easy, particularly as you say, with subscriptions, just to forget what you have just signed up to and particularly because they give you those free offers where you get a month for free or three months for free.

And then suddenly you find you're paying for something and you you sort of can't remember what you're paying for or how to cancel it. And uh yeah, I I must admit I do need to start going through that again um just because I think that I could save Quite a bit of cash, and then I could put it forward to to my resolution. Um and that is tied to travel.

because last year I did manage to pay off a chunk of my credit card debt. It's something that I said I was going to do and I managed to do that. And then we went on whole day to Norway and Let me tell you, Norway is ridiculously expensive. If you think the UK is expensive, it has nothing on Norway. I remember going to one fast food restaurant and here in the UK you'd maybe spend twenty five quid for a meal for a family of four.

And it was about sixty quid and I could not believe it. So I need to pay that off again. Definitely. I think it's always it's a good example of how kind of you can set out plans and you can put in r place really good action and then life kind of gets in the way a bit or something ends up costing a little bit more than you thought, but

really good to start with good intentions. And I feel like we've kind of swapped resolutions a bit in a way because mine dovetails with your win from last year, which is getting much more organized when it comes to investing and saving for my daughter. So

I've definitely been guilty of being a bit sporadic with this. And Danny, I've got great news. After I decided this was my resolution, I decided to just deal with it right then and there in January. So what I've done now is set up a monthly uh direct debit into my daughter's junior ISA and I've set up an automatic investment and honestly I think it took me about four minutes to do all of this.

So I now feel like a bit of a cheat because my resolution is something that I've already done. But I guess it's maintaining that throughout the year. And, you know, also maybe looking. I've set it for quite a small amount of money. Sorry, April, my daughter. But if I can increase it throughout the year, then maybe that should be more of my goal. But at least I've got the organized bit out of the way where it's automatically gonna come out each month. Um and that's done.

And then if she's been particularly good I might add a bit extra. Since you've already achieved, I think we're gonna hold the subscription thing over you for next year. Yeah. Check back in with that one. But you talking about those regular investments, um, Emma's um resolution for the year kind of fits in with that. She is a younger member of the team and she is thinking about her own investments, not her children's.

My financial resolution for 2025 is going to be to set up a regular investment in my AJ Bell Doddle Investment ISA. So last year I was saving up a cash pot for emergencies, so I had that money to hand. Now, I really want to focus on my investments, so um I want to set that up each month. I don't want to worry about it each month, though. So I want to automate um a certain amount to then be invested each month in my

Yeah, I think that's a good idea. It basically follows a similar pattern of kind of automating that process so that you don't have to think about it and so that you can just Put it in place, forget about it, put a bit weigh on payday. Um, and so I think it's a really good one that a lot of other people could follow. And and like I say, you can start with a small amount of money and then once you see that build up a bit, you might increase it.

But also Emma is like a lot of people in that good position of um being younger but being, you know, in a solid career. And so it's really thinking about how you optimise the the money that you've got there and your earnings power. um and thinking about what you save for and there's always competing elements, isn't there, whether it's

wedding, whether it's saving for the future, whether it's saving for a house deposit or putting the money in your pension. Um we've got a really good article on the AJ Bell Money Matters website, which is focused on what to think about in your finances if you're in So check that out if that is Yeah, that's um ajbel money matters dot co dot uk and there is one for each decade from your seventies to your thirties. We've got one for your twenties coming up next, so keep an eye out for that.

And while we are talking about age, it is a great moment to flag our webinar, which if you are listening to this pod as it drops because you're subscribed, thank you very much. If you're not, get subscribed. Well, it is on Wednesday, the twenty ninth of January at twelve thirty, with Jacinth from Ageism Is Never in Style and Helena Morrissey, our founding ambassador.

Have you seen Laura some of the brilliant content that people have been sharing on socials using the hashtag don't fear your future? I have and it's also I really love the one that Jacinth did with her mum. I thought that was really good, very powerful. It was. Do join in with that because we'd love to hear from you. Check out our social media and our website for details of how to join the webinar and ask a question if you haven't had your invitation via our newsletter.

And if you haven't signed up for the newsletter, then what are you waiting for? Go to ajobellmoneymatters.co.uk. Um, so Helena will be answering your question about her brushes with ageism and she will be sharing tips.

On how to take action so you at least have your finances in shape so you don't fear your future. Speaking of Helena, I think we should hear her resolution now and actually Charlene's too because they're both making a very similar My financial resolution for 2025 is a pretty simple one is to ensure that my income exceeds my outgo.

Since I stepped down from an executive role five years ago and taken on a number of part-time non-executive roles, I've had to supplement my income from investments and savings. Well I'm happy that at the end of 2024 is appointed to two additional roles, so for the first time I'm now earning more than I'm spending again. And I'm gonna stick to that and make sure I don't dip into my retirement. So my financial resolution for twenty twenty five is to just slow it down when it comes to spending.

Hopefully that will translate to spending less over the year. But really what I'm trying to aim for is just If I see something that's caught my eye, I'm gonna leave it in my online basket for a week or so and then go back and think about whether I really need it, whether I really want it.

Um and if I'm still thinking about it after that time and I still think I really need it, then that's absolutely fine. But just to just to kind of slow down a little bit and hopefully that will slow down that kind of impulse buying um urge that, you know, I'm sure I'm not the only one of us We were just talking about lifestyle creep before and it is so easy to spend more than you earn and dangerous to dip into savings for day to day spend. I feel like we're kind of

commenting on the government's situation at the moment with borrowing and spending more than they bring in. But there we are. So yeah, I think it is really important just to keep a really close eye on how much you're spending and Particularly if you are in a situation where

where you've maybe gone self employed, you're between jobs, um, you're trying out a new side hustle or something like that, where you're expecting money down the line, but at the moment you're sort of living on your savings. It can be tricky.

Yeah, definitely. And I think, you know, people that are trying to rein in some of that spending it's really important to make a budget. But I think when you're making that budget, it's really important to be realistic. I think lots of people, you know, um go throughout January and they think, right, I'm gonna cut back on all of my spending, I'm gonna live a really frugal life and then that's kind of not really realistic, particularly to live like that for a whole year.

And so I think it's really important about making it realistic because the last thing you want is to then fail at your resolution and then feel really defeated and just not continue with it at all. So it's giving yourself a bit of fun money while also coming up with a budget.

And having big goals like you had for that trip that you took, that is hugely important. And let's end with Jenny, because she's also got a huge reason to be counting every penny right now. My financial resolution going into twenty twenty five um relates to my husband and I We'll need to be going through all the new bills that we'll have to pay. We've got the mortgage sorted, so we want to make sure we

Yeah, expensive year probably for Jenny, but big life moments like that are a really good chance to kind of declutter your finances to really analyse what you're spending. A bit back to our kind of subscription comments, Danny, it's a looking at kind of those costs that you've got going out each month and looking at either how you can cut them down or how you can get rid of them all together.

Yeah, things like insurance, um, that was one of the things Jenny was talking about'cause she's got to change, you know, her home insurance policy and It's just making sure that what you've got is fit for purpose. And I had that last year where I I had a letter through about this um insurance that we had on the mortgage, where if either of us lost our job or died then the mortgage would be paid, what was left.

So our mortgage went up and what that insurance policy was going to cover wouldn't cover the mortgage. So we had to change it. But it's just a really good example of how life sort of overtakes even best laid plans. Definitely. And it's kind of hard to keep track of that each month. That is why the start of a new year is a good chance to check in. We hope that has been useful and we'd love to hear any wins that you achieved over the past year and any resolutions you've made for twenty twenty one.

So remember that the new tax year starts in April. So this is a good window to get things in order, use up allowances, use up various things before the new tax year. And we are aware that we spend an awful lot of time talking about investing for the future. But we haven't done a pod yet talking about what to do when you get there, how to turn those investments into a retirement income. So next time we're going to be talking to the fabulous Georgina Taylor from Invesco about

Decumulation. It's a great word that. We'll break down that dark jargon. It is basically the reverse of accumulation, where you reap the benefits of what you have sown over the years. We hope you can join us then and also we hope many of you will join us on the 29th of January at 1230 for our webinar with Ageism Is Never in Styles, CEO Jacinth Bassett and Helena Morris. Until next time, thanks a lot for listening. Before you go, please remember the is for educational purpose.

And the views expressed don't necessarily reflect those of AJ Bell. The podcast isn't telling you if a certain investment is suitable or not. Don't forget that the value of investment And you can lose money as well as make sure. It's also important to remember that how your task And rules can change. The way an investment performed in the past may not be the same. If you want help, go see a qualified financial advisor.