Why you need to know your money personality | Claer Barrett
The first step to building wealth is figuring out your relationship with money
That’s why we’re speaking to Claer Barrett in this episode, the Consumer Editor of the Financial Times and author of the book What They Don’t Teach You About Money.
What you should remember from this episode
🧠 Money is deeply psychological and emotional - it’s personal.
👧 Your attitude to money is largely set by the time you are 7 years old.
🤑 You have a ‘money personality’ which dictates how you are with money. You can change your money personality but it takes work.
🏃 Getting good with money is like going to the gym, or eating healthily. You will have off days but it’s about consistently showing up.
🆘 People in debt tend to seek help once it’s too late. If you need help, please reach out now - check out StepChange.
☕ Think about how you feel when you’re doing your finances and consider what would make it more enjoyable, like using Hello Kitty stationery or having a nice coffee.
💰 As humans we rarely think long term because there are so many immediate demands on us. But, with wealth-building, you need to be thinking decades into the future or you won’t hit your goals and won’t get the life you want.
🧮 You don’t have to be good at maths to be good with money.
What you should do after this episode
Forgive yourself for past mistakes with money
Work out your money personality - which ones describe you (from Claer’s book)?
Spendy Wendy - could be you if you know the three numbers on the back of your bank card off by heart as you do so much online shopping
YOLO - could be you if you have ever uttered the words ‘To the moon’ without irony
Goblin - could be you if you get more of a kick from saving money than spending it
Spreadsheet Slave - could be you if you have ever dreamed in Excel
Jitterbug - could be you if you have a constant state of underlying anxiety about money
Ostrich - could be you if you say a silent prayer every time you tap your card to pay
Set long term life goals
But remember, we’re talking genuinely long term - 10, 20, 30, 40, 50 years.
You might live past 100 but do you have a plan? How do you want to live when you’re retired? And what will that life cost? You have to put numbers in for it to be a real plan, but don’t forget the impact of inflation.
We’ll do an episode on inflation but here’s an inflation calculator in the meantime which gives you an idea of how inflation erodes the value of your money. You can see that you need roughly £20 today to buy what you could with £10 about 30 years ago (at the time of writing). The real value of money has halved in 30 years.
Do a budget. Here are some decent budgeting tools (Damo is actually making one but it’s not ready yet) but there are loads out there which may suit you better:
Good old fashioned spreadsheet, Excel or Google Docs
Budget planner - a free government tool
You Need A Budget (YNAB) - a paid for tool with all the bells and whistles
