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In this episode, we talk to personal finance influencers and couple, Thando and Lindie. We give us an insight into their personal finance experience, how they budget, and stay on top of their finances.
Abdul: Thank you so much for coming to our IG Live today. If you’re tuning in, we are Claro, a digital financial coaching community. Our aim is to empower our audience to make smarter investment and saving decisions. My name is Abdul and I am the community manager working on helping build and learn within this community, providing you guys with the educational content on our socials to help you along the way. So today, we have Thando and Lindie from @skilledfinances, who are just joining us as part of our Abdul Asks series. This series is to help us understand the different journeys people are having within the scope of personal finance. Hi, guys. How are you doing?
Thando: Great, thank you.How are you?
Abdul: Good thank you, I’ll let you introduce yourselves to the audience. We had a little chat before, but I’ll let you guys introduce yourselves.
Lindie: Okay, so hi guys. My name is Lindy, and I work in the bankruptcy sector
Thando: Hey, I’m Thando, Lindie’s husband, we’ve been married for five years. And we’ve been doing @SkilledFinances since the beginning of this year. Skilled finance is really a platform that we created because we wanted to join in on the conversation in teaching people about money. And we’re really passionate about teaching people about money because we understand that it takes skills to do this money thing.
Abdul: Amazing, Thank you for that intro. So the first question we have is about your current financial goals, what are they at the minute?
Lindie: So we’d say, that we’ve got a lot of goals, but our main two are to continue building our emergency fund and also increase both of our incomes. So those are the main ones that are our current ones.
Abdul: Great, so with these goals that you currently have, how do your timelines match against them?
Lindie: So in regards to the emergency fund, we actually set ourselves a target, which we managed to hit a few months ago. So when we reached that target, we’re like, you know what, let’s just keep going. Let’s just keep saving some more. So we’ve set ourselves another target, which we’re then hoping to reach by February/March time next year. The only reason for that is because we’ve got birthdays in between and Christmas. So were to account for things like that. And then in terms of increasing our income, I’d say the goal for that is probably by the end of this year. So we’re just working hard to make sure that we reach those goals by the end of the year.
Abdul: That sounds good. And so that’s good, that you’re actually changing your goals with time. And, it will change along the way with your circumstances changes. How are you allocating your current savings to these goals, or to your emergency fund, for example?
Lindie: So basically, with the emergency fund, we’re trying to build that emergency fund as quickly as possible. And the majority of our savings are going to the emergency fund if we’re being honest. But we also have a sinking fund at the same time. And the way that we’re doing is we’re sort of splitting that amount now that we’ve reached the target that we’ve set ourselves. Although we’ve got another one, we’ve been splitting the savings in between. We’ve budgeted for training courses and then career development and then with ‘Skilled Finances‘, we are using some of our savings but not a lot. We’ve also made sure to include ‘SkilledFinances’ in our actual budget. So it comes out of our monthly budget, so some money goes towards that as well.
Abdul: Cool, so how do you decide where to save and invest your money? You’ve obviously made a conscious decision to start an emergency fund and but what where does that decision come from?
Thando: So, we have a budget meeting every month. So once a month, we discuss our money, our financial position, and where we want to go. And when we are looking, the biggest question we ask ourselves is why? Why do we want to do these things? The emergency fund came about because through this pandemic, we’ve started to really realise the power of having cash available instantly. Previously, we’ve been so investment focus and driven, that we thought ‘okay, we’ll save a little bit here and there’. But the pandemic made us think, actually we need a good cushion of savings. So that’s what made us concentrate and start an emergency fund. So because of that, then what we then do is then ask the question, ‘ where, where can we put this money that will allow us to, have that instant access?’ So it’s important to ask question why? Then decide which accounts, products or services will meet that requirement. Essentially, then allow us to do what we want to do because we want to have that instant access and put it in an easy-access savings account.
Abdul: Right. So that’s interesting, because obviously, with this whole pandemic people are thinking about investments in different ways. It probably has changed, post-COVID and pre COVID, but how does your the idea of risk and potential return play in what way you invest your money?
Thando: It still plays a big part. To be fair, we are long-term investors. So if we’re going to put money into anything, it’s going to be a long term decision. And because of that long term decision, we can take on risks, or a certain level of risk that will kind of see us through the time of going through the downs and ups. Eventually, over time, averaging out at a positive, hopefully. So the risk of return is there because we have a very long term perspective when it comes to investments.
Abdul: Part of the community we are growing with Claro, are people who are really passionate about the impacts of where their investment goes. Are there specific values that you guys have that makes you think, ‘okay that’s the company I want to invest in, or this is the reason why I’m putting my money towards something’?
Thando: Yeah, funny you should say that. So one of the things that we definitely value is real integrity and companies that really show or have, at the very least, expressed an interest n issues that really impact humanity and the world. And that could be all sorts of things, such as environmental, social issues and all of the rest of it. We’re really big on companies that have at least a willingness to say they have the power to make some changes or to do something in that sphere. And as part of their corporate reports, they show that they have a plan to make an impact really in the world. And those are the companies that we love to invest in, to be fair. We find that companies that do that usually have a balanced view of money. So it’s not all about making a profit at any cost or at the cost of everything. It’s really about making money in the right way and doing the right thing at the right time.
Abdul: We’ve just actually had a question come through. And it’s it says, what would be your advice for a fresh graduate out of university who is earning a relatively low salary, and has to pay rent, etc, but also wants to pay for a mortgage in the future?
Lindie: That’s an interesting question actually. I’d say that if you come out of uni, and you’ve got a low income. All you can do is use a budget. First of all, have in mind a plan and tell your money where to go. When you’re using a budget, you should budget for your essentials. Always make sure your essentials are covered. Then make sure you’re not going into debt by missing essential payments because that will harm you and your credit file in the future. When you’ve then got a budget, you can see how much you’ve got leftover and how much you can then save for the mortgage. So you can actually do both at the same time. And a lot of the times, it’s not really about the amount that you earn. When you start using a budget, you start to realise that sometimes you’ve actually even got more money than you realise, because you’re keeping your costs at a minimum and you’re living below your means, whilst also making sure that you’re saving and then directing the savings to your financial goals in the future. So that would be my advice.
Thando: And to add on to that what I would say is, it’s more to do with your mindset and your approach. So it’s very easy at that stage to obviously want to buy a house. You see everyone else buying a house and you’re thinking I don’t have enough money to buy a house, myself. So the thing I would say is adding it on to the budget. What the budget will allow you to do, is to plan ahead. You will then know based on what you can do that you’ll be able to buy a house by 2025. And that’s okay! You will know that you don’t have to stretch yourself to buy a house next year and put yourself in a worse situation because buying the house isn’t the end goal. There are also ongoing costs of owning the house. So you have to think about it. So you want to be very, very mindful that to do what works for you, but also keep your plan in your mind and not be too focused on what everyone else is doing and comparing yourself to other people. That’s where you lose track in the sight of your own plan, and can easily start to make decisions that won’t be to your benefit in the long run.
Abdul: Yeah, I think you both mentioned budgeting and planning which is actually something that seems to be a great tip coming through in this series that we’ve got going on. Like you mentioned, circumstances change and actually planning is extremely important. Apart from that, what would you say would be your money-saving win or top tip?
Lindie: When it comes to saving, I’d say that start planning now. Now, it doesn’t matter how much you’ve got, just start! The thing is, imagine if you started saving a pound every day, from the beginning of the year, you’d actually have £365. But the difference is, if you look at that pound and think, actually, that’s not a lot of money. Why should I save I’ll just spend it, you could actually go the whole year without saving anything. So it’s your mindset, but also remember that start with a little and you will get really far. Even with the little – every little helps.
Thando: Yeah, absolutely. I guess my top tip for you guys and I’m just gonna say – it’s got to be a budget, right? I can’t move away from that. The reason why budgeting is actually really key is because the budget is where everything else comes from. So that’s where you’re able to allocate money towards investing, towards paying off your debts, towards saving, towards your living expenses, and even towards fun! It’s not about not having fun. If anything, what it does, is enable you to have fun, guilt-free because you know that you can afford it and enjoy the rest of it. That’s what the power of the budget is. Having a budget will also increase your confidence with money. Because you need a little bit of confidence when you’re handling money. You need to say it with your chest, okay I’m confident in what I’m doing and I know what I’m doing. And what a budget does, it empowers you to have that confidence with your money decisions and where your money is going. And that’s one of many, many benefits of having a budget. So I would definitely say the budget is the foundation.
Abdul: Thank you for those tips. And actually, if anyone is reading this and is thinking about, planning their personal finance and budgeting, we are running a competition. You can win a free session with a Chartered Financial Planner, so you can work through your goals and decide to plan. And like you said, circumstances are changing across the globe. So it’s great to start now. Thank you both for sharing your experience with us today. But before we go tell us where we can find you and any upcoming projects that you have.
Thando: Sure. we are on Instagram, @skilledfinances. We’re also online at skilledfinances.com, where we blog in more detail around the topics of personal finance. We are also planning a few things in the background but we will soon be offering to coach to those who would like. Some one-to-one discussions around personal finances. You know whether you’re planning to pay off your debts or to buy a house or to simply save we can guide you with that. So that’s one of the exciting things that we’re working towards right now.
Abdul: Exciting stuff. Thanks again for coming on to our live and we appreciate everyone tuning in and sending in their questions. And we’ll see you guys next week on Friday for another episode in Abdul Asks. Thank you, bye!