Money talk

Abdul Asks: Clare Seal, founder of @myfrugalyear

16 October 2020 | Posted by Abdul Rashidi

This information is for illustrative purposes only and it should not be construed as financial advice. When investing, your capital is at risk.

Hope you’ve all had a great week! Clare joins us to talk about her experience around loans, her own work around financial literacy and her new books. We spoke about the risk quiz, and if you’d like to try it, click here.

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Abdul: Hi, I’m the Community and Social Media Manager here at Claro. And if you’re joining us on this outdoor asks live series, and this is a series where we go through people’s personal finance and talk, talk through some examples that we hopefully can share with you. And so today, I have a special guest who will be joining us shortly. But if you’re new to Claro, Claro is a digital financial coach and community that is working towards providing people with the tools and skills so that they can make better smarter financial decisions. So I think I see Claire joining us now. Hi. How are you doing?

Clare: Yeah, good thank you! I’m sitting from these homemade Pokemon cards that my son made,

Abdul: Anything to keep us entertained right now? I think I’m there for it.

Clare: Yeah, I think I should give you guys a close-up view of one, they’re quite something.

Abdul: Well, if you are joining us on our live and I think most people will know Clare, but please give us a quick introduction to who you are?

Clare: Yeah, so I’m Clare Seal and I’m the person behind in @myfrugalyear ‘s Instagram account. It was anonymous for just over a year because it was discussing some quite big themes around money, and I think one of the things I’ve really tried to do is to try and remove some of the stigmas around making mistakes with money and accruing debt or failing to save all of those things. And you know, and that’s not something that we talked about lightly. So I was anonymous for a year, decided to sort of revealing myself earlier this year, and the response has been like, just lovely. And I’ve also written two books, one of which real-life money came out in May. And the second is follow up, it’s journal the fit in yourself. We started December, so yes, sort of potted history of me. Yeah, here we are!

Abdul: Amazing. Well, congratulations on your success on your book releases. I think that’s super exciting. And I think kind of similar to what you’ve been talking about what we’re doing at Claro is really trying to showcase different (with this series in particular) different financial journeys. I think it’s important for people to understand there’s no one way and no quick fix for anything. The biggest thing you can do is really understand the financial terms and jargons a little bit more. So I think I’ll ask your first question and it might be a big one, but what are your current financial goals?

Clare: So, I mean, at the moment, there are a few different strands. The first is to finish paying off our debt. So, anybody who doesn’t follow my frugal year, I started it because I had this like, really broken relationship with money for a long time. And it has resulted in just over 27 grand of credit card overdraft debt. So paying off, that was a big reason. I mean, it was the reason why I started the account. I feel I might get a couple of dozen followers, that might attack me if I buy too many lattes and I didn’t expect any of this to happen. And so we’ve paid off this debt 17 grants just over 70 grand. So we’ve got a little bit left to go on. And, but obviously, as anyone who has a debt with interest knows, the more you paid off, the less interest you’re paying. So the more you have your capital, which is very nice. And beyond that, it’s saving for a house deposit. We still rent but we’re a family. We’ve got two young children. And I think for a lot of us the kind of precariousness of renting. We had to move earlier this year because landlords suddenly decided to sell even though they told us they weren’t going to. And I think just having control over where you live is a really big thing for us. So that’s our next big goal. But I’m also trying to think sort of further into the future about retirement and investment and all of the things I scared to even think about when I was in the midst of this really like horrible push and pull relationship with money.

Abdul: Yeah, that sounds good. I think he mentioned something about retirement there as well. So the next question was actually, with these goals that you have, and what kind of timelines do you see for this? And how you kind of going about making sure that you kind of reach those goals, which is a hard question but is there anything you’ve got in place?

Clare: I think, it’s hard to have really super long term goals, I think it’s good to have like a vision for what you want your life to be like. And then you can decide how you’re going to use money as like a tool to get there. And I’m very passionate about this feeling that you know, the goal shouldn’t be the money, the goal is what you use the money for. And so that means that for everybody, they’re going to have a different amount that they want to earn and a different amount that they want to have saved. And it’s very personal. But for me, I think, I’d really love it if we were living in our own home within the next three to four years potentially. And, and then I think in terms of retirement like my career has changed so much now. I was kind of a full-time employee, as a brand manager up till last summer, summer 2019. And now I’m freelance and this really squiggly career where like, write books, sometimes I work with brands and do some social media stuff – all of that. And so I don’t know, when I’m gonna want to sort of, you know, have to have for money when I’m not working. And but I would like to just make sure that I have this kind of financial stability and peace of mind by, I’m 31 now, so by my mid-30s, and would be amazing. And, you know, if I could retire by sort of 60 -65, I think that’ll be quite nice.

Abdul: That’d be a dream. But I think obviously, it’s quite tricky, like you said for certain goals and timelines, as they are super-specific to you as an individual? But are you doing anything in terms of your allocation? Are you making sure that you are putting certain amounts to a certain pot or into a pension? Like, how are you going about that?

Clare: Yeah. I am just starting to pay into a self-employed pension, I’ve got a couple. I think for a lot of people, we’ve got like a couple of different pension pots from previous jobs. And we’re not really sure what to do with them and all of that stuff. But I’m just starting to pay into a self-employed pension. I’m going to do some work on @myfrugalyear on that in the next few weeks, because I did a poll and around 97% of people said ‘Yes, please, please explain pensions to us‘. So I’m definitely going to do something on that. But at the moment, I’m prioritising the debt that’s accruing a lot of interest, it feels like a sensible thing to do. I will say, I do have an emergency fund and trying to build up, ideally, six months worth of living costs along way off that at the moment, but I’ll get there. This is for some small things like car insurance, Christmas. I think a mistake that I used to make and a lot of people make, is they put savings into one big like blob without any purpose. And then it means that there’s not really any consequence of thought if you have to withdraw from it. And whereas what I’m trying to do is have like a plan for everything that I’m taking out of my budget.

Abdul: No, I think that’s good. Emergency funds has been something that’s come up quite a lot on this series and something I have personally have actively done. Just listening to people and seeing that’s what they’ve been doing and how it’s helped. And like you said, sometimes you have the saving pot. And you’re like ‘Well, I’m saving, not sure what the goals are, not sure what it’s for but actually it’s there and I can dip into it’. And so emergency funds aren’t for everyone or something that everyone has to do. But it is an option for you to have something. With the current circumstances that are going on, now would be a great time to have something that would be ready there for you. I’ve actually done that myself. So I think it’s great that you’re talking about it also. But when you are deciding to save and invest in any investment, what are the key things that you think about when you’re deciding to invest in certain products

Clare: So, I’m very much I can beginner investor. And at the moment, I’m just sort of having a look at the functionality on the savings apps that I use. And so seeing what the returns on different funds are in just having a bit of fun with it. But over the next year, as we have a bit more disposable income to invest and we’re starting to think more about the long term, rather than the short term pay-off-debt-save-house-deposit. And then, you know, I’m definitely going to be looking into that. And I think there’s so much great content on Instagram, even about investing for beginners and value investing. I really had this attitude, until very recently, that investing was only for rich people and financial advisors only for rich people. And it just isn’t, is not the case. So and, yeah, I think I’m just at the stage of like dipping my toe in the water at the moment.

Abdul: Yeah, I did have the same actual opinion. I think, before I joined with Claro, I also thought investments were for the rich people and if you don’t have the funds it’s not for you – like it makes sense. But I think as I’ve learned,myself, going along and through feedback from our influences and our team, there’s a lot you can do to make sure that you’re in a better position. No matter where you are, in terms of if you’ve got a lot of money or if you don’t have much, there are things you can absolutely do to make sure that you’re in a better position, financially. I was going to ask, with risk and potential return, is that something that is key in your decision making?

Clare: Yeah, I think for me, I have gone for, like lower risk, bundles at the moment, just because I still am not sure if I’m gonna have to access that money at reasonably short notice. And I think once they get a bit more comfortable and are a bit more on a level playing field that I’ll be able to take a bit more risk. But and it’s really interesting seeing how fun global events affect how prosperous, different funds are – it’s quite fascinating. But, for me, it’s kind of low risk, low reward. And as we start to look more like long term stuff, I think we’ll start to get riskier, and we still have sort of higher reward.

Abdul: Yeah, we actually do a risk quiz. So if anyone’s interested, you can take the quiz here. I actually was on the same wavelength – thinking I am quite a risky person, prior to COVID. And now that’s (COVID) has completely changed my whole mindset with what’s happening in the economy and globally. And so I think also people have an idea of thinking, if I have a low-risk tolerance, that I don’t have products available to me. Or if I have a super high-risk appetite, then I should go and do something bigger. So I think that there are always options. So it’s not necessarily a bad thing if you don’t want to take much risk, there are still products available. So if anyone’s interested in that- take the quiz, I just learned a lot myself doing it – I think it’s a useful tool. And at Claro, we are really focused on more of the ethical side of investment and the impact your decisions make globally and within a company. So do you have any certain values that you take into consideration while investing or thinking about certain products?

Clare: Yeah, that’s definitely a priority for me. I am quite conscious of my purchasing decisions from a financial perspective but also from thinking about climate change and human rights – All of that stuff. It’s something I’ve become more and more aware of like the last couple of years and so there’s no point in me doing all of that and then investing in something that pulls that out. And I think it’s something that really needs a bit of light shone on it because I think actually, for instance, with some investment providers might go for that “Green Fund“. But if you look at who funding is funding it, it’s Boohoo, who are not green in terms of the environment, or in terms of human rights. As you say, having transparency and that visibility, enabling people to make an informed decision on where their money is.

Abdul: Yeah, I think when people think of more ethical products they automatically go to like green products which is a huge part of climate change but there’s also other things to consider. I know people are becoming more socially aware of what’s happening within the world. So there are effects beyond just a green level. And, there are certain things that need to look out for, for example looking within a company’s team, their ethos, where they’re really being involved. So I think you have to sometimes look beyond the ethical side of things, there is also a social and governance criteria for some people. So, I think you make a fair point, it’s really important to look into these businesses a little bit more and just consider that actually, you may be one person but you are creating an impact. So before we leave, and thank you for joining us today, I would love to know what’s your top money-saving win or tips would be for our audience.

Clare: I think at the moment, I would recommend doing an audit of your finance. I think it’s really easy at the moment to bury your head in the sand as everything is a little bit depressing with COVID and we don’t know when it’s going to be over. And I certainly know that feeling of everything feels like it’s not going great, though the best thing to do is to try and ignore it for a second and that’s not the way to do it. I think trying to make sure that you have the ability to budget so you can save something is important. Making sure you look after your money, as it’s an important element of looking after yourself.

Abdul: Finally, where can we find you and what current projects are you working on?

Clare: Yes, so you can find me @myfrugalyear on Instagram. I am also currently doing a soft launch for my new website, hopefully, next week – if everything’s ready! And that’s all on me. And then also, books are Real Life Money which is out now ! I also have The Real Life Money journal which is out december!

Abdul: That’s amazing. Thank you so much for joining me today. It was really lovely talking to you and good luck on your future projects.

Clare: Thanks so much, Abdul. Bye.

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