As an entrepreneur, you might assume that I’m pretty savvy with numbers. Having spent the last twelve years starting, growing and running my own businesses, I’m no stranger to spreadsheets, cash flow and tax returns.
It’s almost impossible to run a business while turning a blind eye to money matters, but believe me when I say I have done my best to ignore the numbers side of things.
For as long as I can remember, I’ve had an overwhelming aversion to numbers and have lost track of the number of times I’ve avoided my accountant or put off my financial admin for days, weeks and sometimes months.
The word pension fills me with dread, I wouldn’t know where to start with an ISA, and don’t get me started on inflation. This is not something I’m proud of but I have found it increasingly difficult to change my habits and face my fears when it comes to finance. As a confidence and mindset coach, I’ve finally decided that enough is enough; it’s time to practice what I preach and challenge my fear of finances.
Financial freedom is a goal many of us strive for and as we have acclimatised to this new flexible way of working, now more than ever people are prioritising their daily sense of happiness and fulfillment.
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We live in a brilliantly digital age, bursting with apps and solutions to help us maximise our investments, build up our savings pot or simply make steps towards our own financial goals – whatever they may be. However, if you’re coming from a place of fear (like me!), it can be overwhelming knowing where to start and you might find it easier to bury your head in the sand.
I know I’m not alone, but am often surprised at just how many women are in the same boat as me.
I coach women to make fearless decisions, and my clients are all brilliantly intelligent, switched on, and capable – but often with this underlying lack of confidence when it comes to money.
It came as no surprise to me to learn that female employees are 33 per cent more likely to experience financial stress compared to their male counterparts. I have female friends who have no idea how their mortgage works and have largely left it to their husbands to take control. Friends who spend the very last pennies of their paychecks on a round of drinks at the pub, and live off pasta until the next one. Friends who are inundated with credit card bills and overdue payments, yet still find the cash for a quick Zara spree or ASOS order.
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Once I decided it was time to take control, I began searching for someone I aligned with who would understand my needs as a self-employed business owner and wouldn’t question (or challenge!) my spending habits (I do love a holiday).
As a young woman in my thirties, I was disheartened to learn that only 16 per cent of UK financial advisors are female, and only 6 per cent of those are under 30. In fact, the average age of a financial adviser is 57.
With my tendency to lean towards women and support female entrepreneurs, I was delighted to have come across Sophia Lerche-Thomsen, a Chartered Financial Analyst and Financial Planner. After a lot of procrastinating on my end, I set up a consultation and overcame my initial dread as I prepared to have my lack of knowledge and understanding exposed.
Sophia’s passion lies in empowering women to understand and take control of their finances, and it’s an approach I found incredibly refreshing and appealing.
What happened when I saw a financial planner
During our first session, Sophia provided a general overview of my financial options and we spoke through various possibilities when it came to income, savings and tax preparation. The way in which Sophia explained everything made it feel so simple, and alleviated a lot of the fear I had been carrying.
It suddenly felt less scary when it was broken down, and the benefits of taking control challenged my previous belief that ignorance is bliss!
I never thought I would say this, but I managed to conjure some excitement around money, and felt empowered with a new (very basic) understanding of what options I had available and how these might benefit me in the future. Sophia’s straightforward, nurturing approach and excitement around money is contagious and you can’t help but want to learn more and get started.
For me, setting up that call was the first step, and I have since taken many more (baby steps) towards educating and empowering myself when it comes to my money mindset.
How to take control of your finances
1. Take the first step
Sometimes finding your first step can be the hardest part.
Where do you need to start in order to get the ball rolling? It’s very common (for women especially) to be afraid to tackle their finances head-on, so acknowledging that you’re not alone can be really helpful.
Perhaps you need to start with just opening your banking app and familiarising yourself with account balances. Are you on top of your incomings and outgoings? Try not to allow yourself to become overwhelmed or let your fear take over. Each step is progress, no matter how big or small it might seem.
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2. Work out your financial goals
Financial goals differ hugely from person to person and are largely dependent on your stage of life; for example, you might be looking to start a family, help your children get on the property ladder or perhaps you’re gearing up for retirement.
Focus on what it is you really want from your finances, and then look at what’s within your control. If your goal is to start saving more money, what steps can you take to curb your spending? How much might a realistic number be to contribute to your savings pot each month? What do you need to do or change in order to make this happen?
3. Embrace financial tech
When it comes to making better financial decisions, technology can be your best friend.
There are endless websites and apps dedicated to educating, empowering and helping you to manage your money. Banks such as Monzo and Revolut are built to enable you to easily track your spending, move money into various saving pots and keep on top of your expenses.
You can set up direct debits with ease and Revolut offers the option to add to your savings each time you make a transaction, by rounding up to the nearest £1 and putting the difference away. The free website Honey will automatically and instantly scour the internet for discount codes and deals at your favourite online retailers, often saving you up to 20% on your checkout total.
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4. Change your money mindset
A lot of our fears and worries around finance stem back to our money mindset, which we pick up at a very young age. Our relationship towards money is largely reflective of that of our parents, our upbringing and the way in which we were taught to view money.
Whether you grew up in a household with scarcity or abundance, our habits are taught – which means with some work, they can be untaught. Pay attention to you’re the way in which you view money – does it preoccupy a lot of your thoughts? Is it a cause of fear and worry? Do you view it as a means to an end or a necessity to happiness? Do you feel you have a healthy balanced relationship with money, or is there room for improvement?
As with everything, building our confidence enhances our mindset – and money is no different. Taking the time to educate and empower yourself will only add to this.
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5. Consult a financial expert
Luckily for us, there’s a plethora of brilliant experts out there, all trained and qualified to help us take control and gain financial confidence. From pension advisors, financial advisors, wealth managers, accountants and money coaches – there’s someone out there willing and able to provide you with the exact support you need. It might be that you don’t have the time or inclination to do it yourself – and that’s when outsourcing becomes your best friend. If you’re not sure where to start, Sophia Lerche-Thomsen is an insightful Financial planner with a wealth of knowledge and a supportive manner.
Wherever and whenever you decide to start, let this be your sign. Set up a discovery call. Print out your bank statements. Cancel those unused subscriptions. Download an app. Start small, but start somewhere. You will be amazed at how empowered you can feel by taking those first steps. Oh and don’t forget your holiday fund!
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