99. Making Conscious Money Choices in 2024 and Beyond

Happy New Year everyone! As we're heading straight into 2024, the first episode of the year is discussing how you can make conscious money decisions to reach your financial goals this year.

TOPICS COVERED:

• Discovering your financial values
• Setting realistic financial goals
• Creating a useful budget
• Mindful spending and consumerism

- Listen to the episode with Andrea to discover how to shop fashion sustainably here.

- Download the budgeting app Emma - https://emma.to/kiacommodore

- Download the Pennies To Pounds Budget Spreadsheet - https://www.penniestopounds.co.uk/product/budget-spreadsheet

Transcript

Speaker 1: 0:00

Hey guys, welcome back to the Penny Spouse podcast with your host, keir, and this is the podcast waiting to dispel your myths, simplify difficult financial jargon and rectify your own personal problems. Happy New Year, everyone. It is officially 2024. And that means that this is the very first episode of the New Year. I hope you've had an amazing festive period. I did. I spent a lot of my time resting and if you know me, you know I'm a workaholic, so it was very nice to rest and unwind. However, we are hitting the ground running because it's time to get ourselves together for 2024. We have got a lot of amazing episodes lined up and mark my words I'm saying this today as part of my goals that we are going to have an episode every single week of 2024. So if you haven't already, make sure you add Penny's to Pounds to your library, hit subscribe so you never miss an episode. We've got some amazing guests lined up and you don't want to miss it, trust me.

Speaker 1: 0:53

But this episode today is about making conscious and smart money decisions, because we're in the New Year and no doubt many of you, like myself, have made New Year's resolutions. The stats are saying that three in 10 people in the UK will make, or have made, money resolutions, so everyone's thinking about getting their money together, so it's only right that we talk about that today. When it comes to your money, whatever your goals are, whatever your plans are, whether it's for 2024 and beyond, it's so important to really factor in and make conscious choices with your money. Think about the time when you spent money and you haven't really sat down and taken note of what you spent. I find that I do a lot more now. Because of the rise of contactless and Apple Pay, it just becomes so much easier to tap your card and not really factoring and think about what you're doing with your money, what you're spending on and, more importantly, how much are you spending. It is so much easier when things are contacted. Let's just tap your card and not really consider what you're spending on.

Speaker 1: 1:52

So if you listen to this episode, then we're going to make an active effort to really consider what we're doing with our money. We're going to break it down to five separate categories. First things first is understanding your financial values, and this is a very big one. When it comes to talking about financial values, it's important to identify what are your financial values, because they need to align with your habits. So, whether that's spending habits, saving, investing habits, you need to understand what are my financial values, and when we talk about this, there are so many things that they can be.

Speaker 1: 2:22

I want to give you a few and see which ones resonate with you. For example, one could be around frugality. Maybe you are someone who wants to not spend as much. You're really looking to embrace that simple and cost effective lifestyle. You're not really looking to spend loads of money. If there is a discount code or a voucher, you're the one who's going to go ahead and take advantage of that. So that might lead you when it comes to your spending habits. It might lead you to choosing second hand options or maybe option for, like, generic brands in the supermarkets and not going for name brands, because that is one of your core values is frugality and actually saving money.

Speaker 1: 2:59

One of your values, however, could be financial independence. So it could be you looking to really be independent and not having to rely on anyone or anything when it comes to your finances. So that would manifest itself by you perhaps looking to build passive income streams this year and not having to rely on traditional forms of employment. So you know, if you're working on 9 to 5, not having to rely on your one paid a month, you might say right, my financial independence is my big financial value for this year. So I'm really going to build on these extra streams of income for the year when your values could be risk taking. Now I feel like this is a bit of me. I feel like risk taking is a bit more what I am, and that is if you're someone who's embracing and really taking in making calculated I see important word calculated financial risks, obviously with the hope of getting a high potential return in the future. So an example of this could be investing in higher risk assets, such as stocks and shares, obviously with the intent that you will gain much higher potential rewards in the future. And lastly, a big one one of your values could be environmental and social responsibility, and this is a big one for many people and that value for you could be aligning. Make sure that all your financial choices are aligned with ethical and sustainable considerations in mind.

Speaker 1: 4:18

So a big one that comes to mind with this is if you have a pension it's like a workplace pension or a personal pension those are being invested on your behalf and if you go automatically enrolled. The chances are that you didn't get to choose where your money is currently being invested. If you are someone who is very big on helping the environment and society and things that go against that don't really fall into your belief system, there is a chance that you could be investing your money into something like that. So what you might want to do is to go and revise and go and have a look and see where your money is currently being invested, for example, in this case, with your pension. A lot of people don't realise you can actually call up your provider, talk to them, ask them what's being invested, and a lot of them will give you the option to actually move your money. If you want to invest in more environmentally friendly causes, you can do such and move your money over to that. So you're not funding I don't know arms or war abroad. You're actually just funding things that align with your value.

Speaker 1: 5:13

Going back to point one is understanding what is actually your financial value. I've given you a few there. There are many different ones, but once you understand that, you can understand and it will help to guide your future decision making. Hopefully you've got a few ideas as to where you align when it comes to your money. Second point is what we talk about all the time but we talk about all the time because it is so important. It is budgeting and tracking expenses. It is 2024 right now.

Speaker 1: 5:41

Guys, if you are not currently budgeting whether that's pen and paper, whether that's a spreadsheet, whether that's an app or all of the above you need to make sure you get on it. Budgeting is so crucial, in my opinion, because it helps you to understand where your money is going. If I ask you right now what have you spent on in the last week? Do you reckon you could give me an accurate play by play of everything that you spent? The answer is probably no, and I'm with you as well. But when you create a budget, you can actually allocate and assign and know exactly where your money is going.

Speaker 1: 6:14

Like I said, you can do it. Good old pen and paper. I love a bit pen and paper. Write it all down, draw it all down. I feel like I'm really in control when I'm physically writing it out. You could do a spreadsheet We've got one on pennies of pounds on our website that you can get which completely automates it.

Speaker 1: 6:28

All you put your numbers in. It calculates all the money for you so you know how much you've got coming in and how much is going out. Or you can use apps like Emma really good app for budgeting and with Emma, all you do is connect up all of your bank accounts, your savings accounts, your investment accounts, even pensions, anything that you've got with regards to your money. Connect it all up to that app and it will help to create a budget for you and highlight where you're spending. And I think a really good thing is it will highlight your current bank balance. If you knew how many people I speak to that have no idea how much money they currently have in the bank. It is pretty scary, but with Emma it's all there in your face. You can't run away from it, you can't hide from it. But again, whichever method of budgeting you choose, it is so crucial to track your expenses. When you're monitoring your spending and you're monitoring how much goes into your savings, how much goes into investing how much did I spend on this night out? How much am I spending on this holiday you're able to again align that with your financial goals and your values, and that is the core essence that we're trying to come across and trying to convey through this episode.

Speaker 1: 7:31

The next point is prioritizing your financial goals. Now, if you know me, goal setting is my jam. I have been vision boarding since 2020. And I've been setting goals since I don't know since I was in school. Probably that was when I started setting goals for all aspects of my life. Finances is a very key one. Having clear financial goals helps you to stay accountable.

Speaker 1: 7:55

So a few examples of financial goals that you can have you could say I want to increase my credit score this year. You can have a number. You can say I want to increase it by 100 points, for example. Or you just want to get it into a good standing. If it's not currently. Another example means it could be I want to clear debts that I have. You might have an overdraft, a student overdraft or just an overdraft in general. You might have a credit card that you've been using. You might have another type of loan. You want to try and get that down to even nothing or a lot lower than it was. Another goal could be investing more into your pension, or having a pension. If you don't really have one. It could be setting up yourself for retirement, getting that pension together and knowing where you're at, whatever your goal is. It is so key to have that in mind.

Speaker 1: 8:36

Now, when it comes to goal setting, there have been a lot of videos that have gone viral, and there's one in particular I want to touch on, because this is how I've been goal setting for the past year and a half two years, and I have seen a massive shift in how I'm able to reach my goals, achieve my goals, and this, for me, I'm not going back. I'm not going back. So, when it comes to your goals, again, this is for all goals, but let's talk about finances more specifically, because it's penny spent. What you need to do is think of minimum one, but no more than three big finance goals. So it could be one of the ones that I said. It could be saving up for a holiday, your first car, your first home.

Speaker 1: 9:11

What is that big goal that you want to achieve in 2024? Have that there either one or three. Like I said, no more than three, because it gets very difficult to break it down, but you've got that one there. So that is your 12 month goal. From there now we are going to break it down into a six month goal. So this is, let's just say, your goal is to buy a car.

Speaker 1: 9:32

So for the next six months you're saying from January to June, is my mask correct? Yeah, from January to June I am going to try and save I don't know £2,000 towards my car. That is my goal. So that's broken it down. So you know my overall goal is to save for a car. Maybe the car total is £4,000. So I'm going to try and save half of that in the next six months. Then from there we're going to break it down into a three month goal.

Speaker 1: 9:54

Again, if you want to do the maths on it, you break that number down into how much you can save into three months and from there I like to do monthly and I break it down again into weekly. This helps you to stay on track because when you have a big overarching goal, like I want to get a car, it almost feels like a pipe dream. How am I going to get to getting that car? It feels so far away and so far and there are no actionable steps that I can take to reach to achieve that goal. However, if you do it, like I said, 12 months, six months, three months, then one month and every week it gives you that step by step, that play by play, that you can follow week by week, month by month, to help you to reach that goal.

Speaker 1: 10:32

Another method that I also do as well is breaking down your goals into quarters. So take that overarching goal. Like I said again, you're going to buy your dream car, so Q1, which will be generated March. What are your goals within that? So the same thing in the three months. But if you're vision building, I like to have a vision board for my 2024, for example, and then Q1. So I'm able to see right for the first three months of 2024, these are the things that I want to achieve, and they can be smaller versions of your big goals. There can be smaller goals in general that go in there, but it helps you to visualize it, to bring it together. And, again, the most important thing for me is the actionable steps. I always see advice and tips online do this, cut back on that, stop spending on that, save more on that. But sometimes it's like that's great, but how do I get started? When you break down your goals that way, especially your finance goals, it helps you to have a bit more of focus, a clearer idea and a path that you're going to take to reach those goals.

Speaker 1: 11:29

The next one, number four, is mindful spending and consumerism. If you're listening, how many of you shopped during the box and day sales my hands up, by the way, because I did. Next question, how many of you shopped during the January itself, which is still currently in my hand, isn't up if you're wondering. I didn't shop January. There is so much going on and even though we are in a quaternum and crisis, inflation has slowed down to the numbers dropped, but that means prices still rising just at slower rates, even though things are slowly regulating. It feels like it anyway.

Speaker 1: 12:07

One thing that does not stop is consumerism. You will find that retailers will be bombarding you. I found the festive period my inbox in my emails has never been so cluttered. I was getting two, three, four emails a day from one retailer trying to encourage me to shop, spend here, discount there, and that is something that you can't escape from. So when it comes to actually achieving your financial goals, a lot of them are probably going to be around maybe saving or putting more money towards a certain goal. Consumerism is going to be a big factor that may actually hold you back from that. So we want to understand what it is to spend mindfully, and I think the best way to consider this is if there's a few different ways.

Speaker 1: 12:52

But one way that I like to do it is I'm someone self-proclaimed. I don't really shop that often just because I think a lot of things I want it. In the moment I see it and it's like shiny and bright, like a magpile. I'm like, oh, I want to get it. But then when I put it in my basket, I often do that reflection period. I'm like did I really want it? Do I really like it? And nine times out of 10, I don't like it as much as I once thought I did. So I don't check out.

Speaker 1: 13:18

So one thing if you're someone who likes to impulse shop is to implement the 48 hour rule. So that is where you are shopping online, for example, and you add things to your basket and it feels great. You know. You're like I'm shopping, I'm clicking here at the basket, at the basket. Put it in your basket. Don't check out straight away. Give it 48 hours. If after 48 hours, it's still on your mind and you're like I really wanted that top, those shoes, whatever it is you added, then you can go ahead and check out, because the likelihood is, if you're still thinking about it two days later, you probably did want it. However, what you'll usually find is that you'll either, two days later, think I don't really want it anymore, I'm not interested in it, or you completely forget about that basket altogether, which means that, had you have gone through with it in that moment, you may have done the impulse purchase, which could have been a waste of money. Yes, you can return things, but in that moment I just money that you didn't need to spend. So the 48 hour rule is a really good way if you're looking to curb impulse spending or even just be more mindful when it comes to spending.

Speaker 1: 14:20

Another way to curb mindful spending is to have a spending journal. So this is just a notebook that you can get, or even have on your notes page on your phone, where you physically track how much you spent each day. And what was it on? You say, I went out today and I was going to work and I stopped by Costa Coffee and I got a coffee. Then I went to Greg's and I got a steak bake and then for lunch I got a meal deal at Tesco and then on my way back I popped into the shops and I got these pair of trainers.

Speaker 1: 14:46

Whatever you spend on each day, you write it down, and what you also want to do is write down the feelings towards it. So I felt, great, I really need that coffee in the morning. Or I got that steak bacon. I kind of thought about it and it wasn't really that nice. I didn't really need it right down the feelings associated with how you spend, because after a few days or a week, you'll be able to see everything put together and you'll say, wow, I spent x amount this week and really half the purchase that I made I didn't really need to make them. It didn't make me feel good, it didn't really add anything to my day or my week.

Speaker 1: 15:19

And it helps you to be more mindful when you walk into stores. We did an episode with andrea, I think last year now, which was around her mindful monday method, which is talking about how she buys clothes when she goes into shops. What is it made out of? What is it worth? It's actually worth the money that it's being sold for. So if you want to have a look at that, there'll be an episode description.

Speaker 1: 15:39

But all that ties in with the idea of being mindful of how you spend, because this is all going to impact how you achieve your goals, how quickly you achieve your goals, whether or not you even achieve them. So we want to be very, very mindful. Consumerism is always there. If you're getting tons of emails like me, hit unsubscribe, remove them. If it's not somewhere that you shop that often, or if you feel like you're going to be tempted, remove it, remove it, remove it. We have goals to reach this year. We don't do distractions. We don't need to be thrown off course. We need to make sure that we are aligned and focused towards our goals.

Speaker 1: 16:10

And the last point is we want to try and build a sustainable financial future. This is the big one. Sustainability in every aspect is what we're looking for. It's all well and good to sprint to the finish line, but at some point you're going to get tired and you're probably going to fall off. We want to make sure you've got that longevity when it comes to your financial goals. It's all about planning for the long term.

Speaker 1: 16:30

So we mentioned your one-year goal, but sit down with yourself and say what's my three-year goals, what's my five-year financial goals, my ten-year financial goals? Figure out, where do you see your finances? Some of you, it might be buying a house in the next three, five, ten years. It might be having children, it might be traveling the world. Whatever your goals are, have that long-term planning.

Speaker 1: 16:49

So you know, every decision that I make today is going to impact me in the next three, five, ten plus years and that is going to help you remain stable on your financial journey and, furthermore, help you remain motivated, because I think it's really important to highlight that this journey is not going to be linear. It's going to have ups and downs. You're going to have months we're doing so well and you can have months where you impulse by, and it's important to know that longevity and stability will have ebbs and flows. There'll be ups and downs and that's absolutely fine. No journey is plain sailing. No journey is smooth with no mistakes.

Speaker 1: 17:25

Me myself as a personal finance expert. I make mistakes, right. Sometimes I fall into all I wanted that today I did. I made it, I made that purchase and I shouldn't have. But it is what it is because we're human and that is how paths go.

Speaker 1: 17:38

But to be stable for the longer term, it's all thinking about what's our long-term plan, what are those goals, and a really good one is to have it somewhere tangible. I've made a point of having my goals. I use Notion, so all of my goals are in my Notion page so I can easily access them and depending on what the goals are and how close they are so, for example, maybe my Q1 goals I will either put it in word word form and it'll be my wallpaper on my phone, or I'll put it in picture form and again make it my wallpaper on my phone so I always have it to hand if I'm ever thinking what am I trying to work towards? Or you have a down day or you don't feel motivated. Having it to hand will keep you, keep that fire burning within you to reach those goals.

Speaker 1: 18:18

So you want to make sure that you're thinking about investing, thinking about saving and making those informed financial decisions, and the good news on that is that you're in the right place, because plenty of pounds is where we're going to make sure that you achieve the goals that you want to achieve with regards to your finances in 2024 and beyond. We have got so many episodes planned. I'm super excited. We've got tons of events planned, by the way as well. There's a lot coming, so hopefully you've enjoyed that episode. We haven't make sure you hit subscribe, add us to your library and we will most definitely be back again next week with a special guest and another amazing episode to keep us going in 2024. Bye guys.