In Collaboration With Digital Banking Service, B
There’s nothing like the month of January to get you looking seriously at your finances again. This is mainly due to the tax return I always leave until the last minute. I know Kristabel, think of Future You! The thing is, Past Me doesn’t seem to care that I’ll be trying to decipher coffee stained receipts on a Saturday night in January. Past Me doesn’t care about the plant pot that fell into the bag of said receipts. Past Me is not someone I’m BFFs with right now.
My attitude to money is a bit of a strange one. I’ve worked since the age of 15 and can be quite frugal in some situations, since my main fear is having to ask for help. I see myself as independent and I’ve done some sensible things in the past. I worked for a year and saved before University, which allowed me to finance my placement year. I’ve always tried to put away random amounts as soon as I get paid (though looking back I could have bought fewer patterned tights and saved more), which definitely allowed me to make the ‘full-time blogging’ decision.
However I can also be in denial about certain aspects of my financial situation. I’m prone to using my contactless card and not looking at my day to day spending. I’ve left important things like booking flights until the last minute and had to pay double what I’d intended in the first place. I’m afraid of setting up direct debits for fear of going overdrawn and rely on ‘intuition’ to pay off my credit card in full (you can probably guess how this ends). Also, as you might have guessed, my expenses system is all over the place.
My most successful video of last year involved me being honest about my income during my first year of full time blogging and the money saving tips I’ve used as a freelancer. It led to digital banking service B approaching me for their recent Financial Fitness panel, sharing my ‘millennial perspective’ and the situations that often arise. I’ve definitely had many awkward bill-splitting moments and felt inadequate amongst friends who may be earning more.
According to B’s research, finances are the biggest cause of concern for 36% of people in Britain. We can each have a very personal and complicated relationship with money, so opening up can make us feel incredibly vulnerable. Perhaps it’s telling that I can’t even remember having much financial education in school and most of my knowledge has been gathered by observing family members and sites like Money Saving Expert. Learning to understand APR, budgets and student loans (plus all the emotions involved) needs more than a random General Studies session.
Since B are helping consumers take control over their finances this January with their B-Tox Challenge, I thought I’d open up the conversation and share a few things that I’m hoping to improve in 2018. Can I finally retire the receipts carrier bag of shame?
The B Banking Concept
So firstly, what is B? Basically it’s a mobile-first banking service that uses artificial intelligence to see how you’re spending. There’s an app that gives you a clearer view of your money, so you can assign category ‘tags’ to the different things you buy (handy if you’re confused by multiple Paypal transactions) and set maximum monthly budgets for specific spending.
With ‘Financial Stories’ you can see trends, such as all transactions under £10 and how much you’re projected to have at the end of the month. They’ve also got a store in High Street Kensington that offers talks on coding and creating side hustles, plus free coffee.
Their aim is to get us prioritising financial fitness as much as our health and wellbeing this month by becoming more aware of how and why we’re spending. It’s definitely made me curious about the psychology behind it all. I give myself a strict budget when it comes to my current account but then I often use a credit card for things I’m not sure I’m going to keep. Apparently it’s a ‘detached’ form of payment, since there’s a delay between buying the item and when to pay it back.
Of course it’s not necessarily about cutting up the plastic and sticking to cash, but just being conscious of the consequences. I need to stop seeing it as a hypothetical form of spending and think to myself ‘Would I buy this if I was using my debit card?’
I’m still in the process of giving myself a ‘Financial MOT’ but read on for a few things I’ve realised about my current situation.
The things I’m doing quite well at
A disciplined current account – When I get paid for a project, I siphon off amounts for tax and savings, before putting the rest in a ‘wages’ account. I then pay myself a basic salary on the last Friday of every month and try not to see the other amounts as ‘my money.’ I’m by no means perfect, but I know that things would be far worse if I had a different system (I have a friend who keeps her life savings and daily spending in the same account, which fills me with dread).
Making things from scratch – My biggest thing is batch-cooking. I don’t mind eating the same thing for a few days if I’ve put the effort in and it’s really helped me understand the ingredients behind my favourite cuisines. I’m also good at making my morning coffee at home and keeping emergency cappuccinos to a minimum.
Becoming a bus expert – I am very familiar with the ‘Please hold on, the bus is about to move’ announcement. Sure it takes longer to get around London and isn’t always practical depending on where you live, but I try to get the bus as much as possible to avoid forking out for too many daily travelcards. It also keeps my stress levels low (I’m a different person after a 30 minute Tube journey).
Being obsessed with discounts – I shared my best shopping tips in my Black Friday post and try to keep impulse spending to a minimum. If I’m still thinking about the bright yellow faux fur coat after at least a week, then it finally goes into the virtual basket.
Putting the minimum in my Help to Buy ISA – OK, so I only opened this in October but it’s a start towards my 2047 abode.
The realistic changes I could make this year
Tidying up bad habits – Yes, I’ve been to the supermarket four times in the past week. I used to be so much better at planning ahead and not going in when I’m ravenous but now I tend to get distracted by random things that are never on the list. I’m looking at you tortilla chips with a hint of lime.
I also don’t want to waste as much food. It can be tricky with fresh ingredients, like when you’re forced to buy a massive bunch of coriander you may only need for one meal, but I want to try and communicate with housemates more about the things we can share. Make that house Whatsapp group work harder.
Being more aware of my personal and business expenses – The receipts carrier bag of shame isn’t really working. I need to make tracking business expenditure as important as meal-planning and feel empowered by knowing exactly what’s coming in and out.
Firstly, I need to deal with the reasons why I’m not doing certain things and it probably stems from me not seeing my work as permanent, when in reality I’ve been doing this for almost five years. Instead of thinking that I’m going to fail by separating business and personal expenses, I need to see it as beneficial for my future.
Not fearing direct debits – Hopefully all this increased clarity will allow me to set up some direct debits and not have to make so many manual payments. It’s finally time to join 2018.
I think what’s helped me emotionally is having a few confidantes I can be completely open with and others who may have gone through similar freelance situations. Even whilst I’m writing this at my co-working space, I’m amongst start-ups at various different stages and there’s no judgement (tax returns have been the main topic over tea breaks). I’ve also been nodding along to Emma Gannon’s posts that aim to make things less awkward and illustrator Niki Groom has been completely transparent about her earnings.
Of course I know that I’m probably not going to turn into a mogul overnight. The love affair with my contactless card will still continue, but I need to be honest with myself and aware of my spending patterns. I want to try and make some small adjustments and value myself enough to make some necessary changes. I’ll definitely let you know how I get on.
Do you have any financial habits you’d like to improve for 2018? The B-Tox Challenge also includes a few tips that may help if you do end up craving an emergency cappuccino. Just bring your own reusable cup along to make a small saving and help the environment. I’ve got a few stashed away in cupboards and it’s about time I put them to good use.
This post is sponsored by B. I am by no means qualified to give financial advice and encourage you to research every decision you make.