Important information: The value of investments and the income from them can go down as well as up, so you may get back less than you invest.

The past couple of years have been hard to say the least. We are facing stubborn inflation and higher for longer interest rates, all of which have placed a major squeeze on households up and down the country. So, it’s no surprise that people are on the hunt for some tips on how to manage their money. 

Last month, Ed Monk, host of our Personal Investor podcast invited Claer Barrett, consumer editor at The Financial Times to our podcast studio, where she shared her pearls of wisdom. 

Here are 5 lessons to help you sort your financial life out:   

1. Lack of time is a barrier to managing your money

Life can get busy and sometimes it feels like there’s an endless ‘to do’ list - so it’s no surprise our finances can occasionally take a backseat.  

Claer said that the biggest problem for a lot of professionals is a lack of time.  

“We’re all so busy earning money. We don’t have a lot of time to actually think about where this money is going. Should I be investing? Should I be contributing more to my pension? Should I be overpaying my mortgage? There’s lots of decisions we can research and maybe there’s another person involved as well. Perhaps that’s a partner, or a flatmate - it sort of all gets a bit too difficult,” said Claer. 

“I’m sort of exceptionally lucky at The Financial Times to have people who I can draw on - with the world’s experts in certain topics. But what holds me back from asking sometimes is that we don’t want to look stupid. We don’t want to make ourselves vulnerable.” 

So, if you’re tight on time, what’s a quick and easy way to start? Well, you can sign up to our Pulse email. Each week, we send you three emails on the latest expert insights straight to your inbox. It includes the latest news on markets, investing ideas and personal finance

Another way to keep up to date with your finances quickly is to listen to our Personal Investor podcast.  

And wherever you are in your investing journey, our principles for good investing are a brilliant resource to help you navigate the markets.

"Many platforms have excellent educational resources to teach beginners what’s under the bonnet of their investments. I am a fan of Fidelity’s principles for good investing," said Claer, in her six-week newsletter series - Sort your financial life out with Claer Barrett.

2. Understand your financial personality

Our behaviour is probably one of the most influential factors when it comes to how we manage our money.  

Claer explores this in her latest book - What They Don’t Teach You About Money. She looks at different personality types. It includes some funny names including jitterbugs, goblins, ostriches and a spendy Wendy.  

Want to find out what kind of financial personality you have? simply answer the eight questions in The Financial Times personality quiz.  

In the podcast, Claer tells a story of a man she met at a book signing event in Yorkshire who confessed he was a spreadsheet Steve.  

“He told me, I budget for everything. I drive my wife mad with my spreadsheets, charts and year on year comparisons on how much money she’s wasting. She really wants to go on holiday but I said no.”  

She replied to him and said, “Maybe you can save yourself a lot of money in a divorce.” 

Claer emphasised that managing your money is all about balance.  

“Similarly, with the spendy Wendy, there’s an imbalance. There’s too much spending but what’s driving that?”.  

“What emotional deep-seated issue is driving you to seek retail therapy? Because of course the consequences of that are that you’re denuding your future in other ways. Maybe you’re forgoing pension payments. Maybe you’re racking up unmanageable debt - with huge amounts of interest. I mean these are some of the ways our emotional relationship with money can affect our day-to-day financial lives in ways that we perhaps don’t understand.” 

3. Don’t try to time the market, regular saving is important

We’ve all been guilty of eyeing the stock market for that ‘perfect opportunity’, but Claer suggests a different way.  

After saving up a couple of thousand pounds in a cash ISA, Claer thought about switching into a stocks and shares ISA.  

“Every time I switched on the radio, it would say the FTSE 100 had gone up. And you think should I wait for it to come down before I put my money in? It’s the dangers of timing the market but I do think that’s something that a lot of investors struggle with, especially now.” 

Claer said you don’t need to put a lump sum in - which can be hard for some. 

“You can set up a regular investment on any platform, including Fidelity’s of course, from as little as £25 a month. 

“If I knew then, what I know now - I mean £25 a month, back then, could’ve bought me a round but now probably one gin and tonic and a packet of pork scratchings but it’s something you can make room for in your budget.” 

She recommends that women need to get into regular investing when they are younger.  

“As soon as you get to the childbearing years, goodness knows what could happen to your finances, your earnings potential, how much money you’ll be spending as a couple on childcare. So, the earlier, you get started - it’s even more imperative.” 

4. Budgeting is your best friend but remember to be compassionate

Budgeting is an important facet of managing your finances. Whether you need to sit down and check your regular outgoings or check your bank balance more regularly - it’s always helpful to understand where your money is going. But some people really struggle with this. 

“One person that I interviewed for my book was neurodiverse. She had an ADHD diagnosis as an adult and found it really difficult to check her bank balance. To tackle this, every time she took out the bin, she went online and checked her bank balance. This really worked for her as it broke the spell.” 

When it comes to budgeting, it can be so easy to fixate on your mistakes but Claer said it’s important to be compassionate towards yourself

“Anyone in January, thinking how have I spent all my salary already? I’m in minus numbers when it’s the first few days of the month. You’ve just got to be brave and look at the bigger picture and think where has the money gone? And learn the lessons that the data is telling you and be kind to myself and forgive myself for doing it. There’s no point beating yourself up about it. You’ve just got to learn from the lesson and move on.” 

5. Sort out your short-term debt

For those looking to invest in the stock market, Claer offers some clear guidance.  

“The first thing I say to people is to sort out your short-term debt. That includes your credit card debt. Student debt and mortgage debt is different.” 

She also advocates for an emergency fund. 

“I’m not one of those people who say, you need six months of expenses in an interest-bearing account. You don’t need six months, frankly, a couple of weeks, a month is much better than the average person in Britain. The reason that is so important is because the worst thing you can do as an investor is to be forced to sell when you don’t want to. When the markets are down. If you need that money back it could potentially be crystalising a loss.” 

It’s a topic that we cover in our principles for good investing too. The start investing page covers why it pays to stay invested. 

And if you’re unsure if you’re ready to invest - why not take our short, five-question quiz

Finally, there’s lots more wisdom from Claer Barrett. You can listen to the full Personal Investor podcast here.  

Want to keep up with our expert’s insights? You can sign up to our Pulse alerts and you’ll be the first to know about the latest personal finance, markets and investing idea articles.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.

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