3 TIPS TO LIVE IN ABUNDANCE FROM A FINANCIAL GURU
It’s not often we sit down with Grazia’s money columnist, Bola Sol, so when we invited her to Trouble last month, we knew we had to get the inside scoop on how to flourish in a post-pandemic, newly appointed Labour government world. Here’s what we found out!
YOU CAN’T BE EVERYWHERE FOR EVERYONE:
One of the things that struck me most from our conversation with Bola was the notion that we cannot be everywhere for everyone. Whether it be your friend’s expensive hen do in Dubai, a wedding in Italy or a string of birthdays we can’t muster monetarily - being financially free means sometimes having to make unpopular choices. Speaking to the friend or family member in question and appealing to them from a place of empathy is generally never taken for granted. The financial crisis we are under in the UK affects us all, and sometimes the choice is between paying our extortionate water bills and attending a social dinner on a Saturday evening. Make the right choice for you.
Bola says:“I’m coming to your 21st, your 25th and your 30th birthday. I’m not coming to 22 or 27. That’s my financial boundary.”
2. INVEST, BUT ASSESS YOURSELF FIRST:
Yes, it’s true you can invest as little as £1 - and Bola encourages you to - but it’s worth calculating your risk level first. Assess the risk season of your life; for example, those paying off a mortgage may be a little more risk cautious or risk neutral compared to someone with less financial ties and responsibilites. It’s also wise to evaluate your capacity for loss, and not to invest any money you wouldn’t feel comfortable losing.
Bola says: “Some people get into investing thinking it’s like a lottery and it’s not.”
3. CREATE AN EMERGENCY FUND:
An emergency fund - a nest egg or rainy day fund as our parents might say - is as crucial now as it has always been. With the housing market in a bad way, the job market fluctuating massively since the pandemic, and countries around the world facing war, it is vital to have a lump sum stowed away in case of real need. Roughly, this looks like 3-6 months of your usual expenses; rent, bills and food. If you have saved well beyond this figure, Bola suggests that you may want to look at allocating some of your money into investing, as it isn’t crucial to have more than 6 months put away, and you may be able to grow that figure further if you have more to play with.
Bola says: “You don’t want to be in a place where something changes in the economy or there’s a family emergency and you’re panicking, because then you’re operating out of desperation and no one can make good decisions under that type of emotion.”
[You can access our full conversation with Bola Sol via the Trouble podcast, here!]