Thursday, 5 November 2015

Money Talk: Lessons Learnt

Last weekend was quite a frustrating one for me. On Friday I was en route to a young professionals networking event when one of the most horrific occurrences that could ever happen to any modern day human being befell me. My phone dropped on the cold hard concrete floor of Kings Cross St. Pancras Station! I immediately did an about turn and headed straight back home. I was so upset. I was even more upset when I learnt that I would have to fork out £130 to fix the blacked out LED screen. 

I also almost didn't  go to a wedding I was invited to on Saturday, but I decided better at the last minute.  I did make up for my miserable weekend by accepting an invitation to the World Travel Market - the go to event for anyone and everyone in the travel and tourism industry. In hindsight, my actions went against everything I shout about being on top of  your emotions. However the impromptu knock to my finances has inspired me to use this week's installment to speak about finances.

I have made many mistakes in my twenties, however I have also learnt a lot, and I would love to share.  This is the first time I am sharing info about myself I can actually say I am still a little embarrassed about, but I am hoping I can save someone the pain and hassle of what I have been through. In my early twenties, it wasn't that bad. I wasn't exactly living large and loud, but I was often very careless, and this was with little consequence as I was still living with my parents. But at aged 26 when I moved into my own flat I was very quickly made to face up to my financial escapades.

Here goes: 4 lessons learnt.

1. There is a concept in the business world referred to as due diligence which describes the process of verifying a person or a business before signing a contract. Personal example. At age 24 I bought my first car, a silver Fiat Punto. When I say buy, I actually meant I handed someone £2,500 and asked him to bring me back a car. I wasn't present when money and keys exchanged hands, and was thus unable to check out the buyer myself and ask all the questions I needed.  This resulted in thousands of pounds in repairs and hours spent on the curb waiting for roadside recovery. Before I continue, I must stress that it was not the fault of the gentleman I gave the money to, as I believe he made the purchase with the best intentions. I would also still insist upon taking someone with a bit of knowledge with you when purchasing something like a car.

Wedding time! One criticism is that I never post photos of myself here. So here goes! 

2. Quit whilst you are ahead. Referring back to my crackajack car, I should have cut my losses and ridded myself of it once it started to persistently break down. But as if pouring money into a bucket with a large gaping hole, I continued to spend hundreds on the vehicle almost every month. Once I had finally had enough, I decided to sell it to We Buy Any Car. Guess What? I discovered I had been driving a write off! 

3. I  can totally understand the skepticism that ensues when a company tries to get you to buy insurance for every small purchase. And I do think you should weigh whether it's really worth taking out £20 insurance on a £20 iron for example. BUT I would always advise you take out insurance on high risk items and services, ie. purchases that would cost you a fortune if something goes wrong. Example. Last summer I decided to hire a car (yes, it always involves a car!) for roughly £200 and decided to pass on the £60 insurance as "I am a careful driver". £60 soon turned to £1000 after accidentally reversing into a wall! Lesson learnt. 

Africa time! At the World Travel Market
4. It is good practice to have an emergency fund. So although you may have a pot for your future car or house or anything else you are saving for, you also have another for when the unexpected happens. My broken phone is a case in point example. Having said this I totally understand the struggle, so if this can't be done monthly, you could put money aside for emergencies every other month, or take out a portion from your regular savings.

I hope these tips help you. They are all my own from my personal experiences and I am not a qualified financial advisor. If you are in serious financial trouble or would just fancy some advice from a professional, you should consult the likes of Money Saving Expert or The Money Advice Service. 

What are some of your tips? Share below.


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