How to build a strong sense of financial wellbeing, with Clare Seal
🔮 When Clare Seal faced a difficult financial situation in 2019, she turned to Instagram to make herself accountable, posting anonymously as @myfrugalyear. In under a year, she had grown a following and went on to start The Financial Wellbeing Forum. Clare is also Glamour’s Money Matters columnist and the author of three books.
💝 She talks about how “it’s fine not to be perfect with money all of the time”. Instead, aim for an 80/20 split with the goal of being in control of everything for the majority of the time, supported by a solid baseline of a healthy relationship with money and strong financial habits that can weather any minor slip-ups.
💥 Today on The Wallet:
1️⃣ It’s essential when you embark on a journey to improve your financial wellbeing, you are not wasting your energy or beating yourself up about the things where you don't have any control. Try to instead focus on what you can do and take small steps forward.
2️⃣ It’s easy to try and overcome financial baggage in quite a superficial way but it’s paramount to unpack why you’ve been doing the things you’ve been doing in the first place. It’s about understanding your behaviour to move forward and learning to forgive yourself and trust yourself again.
3️⃣ You can earn as much as you want, but if your spending is out of control and you don't know what your money's going to, it's really difficult to find any sense of financial wellbeing. Overspending can be a self-soothing technique. The biggest thing is identifying emotional triggers and finding alternative ways to assuage them.
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1. What can you do right now to improve your financial well-being?
“Learning to spend mindfully is important and also challenging. If you’re trying to improve your financial well-being and you don’t have control of your spending, it’s like filling a bathtub when the plug is out.
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When you embark on a journey to improve your financial wellbeing, it’s crucial not to waste your energy or beat yourself up about the things where you don't have any control (structural problems, the policy issues, the fact that the cost of living is skyrocketing at the moment with very little mitigating policy being put into place).
So many people blame themselves for things outside of their control or decisions they made when they were much younger. Poor financial decisions can have a massively long tail and can affect you for years and years. Try to instead focus on what you can do and take small steps forward.
This can include processing any financial baggage. It could be through coaching around self-limiting beliefs, which many people have around money: if you've always struggled with overspending, if you've never felt able to save, that can become a bit of a self-fulfilling prophecy.
All of the things that are within your personal control include spending, and especially for women, having the confidence to ask for a pay rise or the salary that you want when you go for a new job (although this can be complex).
You can do a lot around habit change, like having a budget (however you frame that, it might just be a spending plan). Learning to spend mindfully is important and also challenging. If you're trying to improve your financial well-being and you don't have control of your spending, it's like filling a bathtub when the plug is out.
2. How do we separate our net worth from our self-worth?
Separating your net worth from self-worth is about accepting that your behaviour with money doesn't define you as a person. You are so much more than the sum of your parts. Every person is. Money is a fraction of one of those parts.
It's so deeply ingrained in our society that we see people as worth more when they have more money, and we turn that back on ourselves. The idea is wrong in the first place. Everyone's worth the same, whether they've got loads of money or none. Whether you struggle in your relationship with money is irrelevant to how good of a person you are.
It’s also about recognising when you're on that hedonic treadmill of always needing more and more and more. We're encouraged to do that, always needing the bigger job, the better job title, the bigger salary, the newer car, the bigger house. It doesn't give us any space to just be content. We never feel like we're enough. It’s essential to step off that and see the trap for what it is.
It’s easy to try and overcome financial baggage in quite a superficial way, like making a budget spreadsheet as restrictive as possible promising to do things differently. But it’s paramount to unpack why you’ve been doing the things you’ve been doing in the first place. It’s about understanding your behaviour to move forward and learning to forgive yourself and trust yourself again.
If we, especially as women, lack financial confidence and haven't done that piece of work of learning to trust our decision making, it's tough to move forward in a meaningful way.
3. How can we spend more mindfully?
You can earn as much as you want, but if your spending is out of control and you don't know what your money's going to, it's really difficult to find any sense of financial wellbeing. We are bombarded with marketing and offers and nice things on social media. You have to be actively fighting against that.
Overspending can be a self-soothing technique. For many people, specific triggers lead them to shop online. It’s about recognising those emotional triggers, spotting the connections, and finding other ways to assuage the anxiety.
The biggest thing is identifying those triggers. You can either think about it, or you can go back through a bank statement. Look at everything where you had buyer's remorse or don't remember buying it: think more broadly about the circumstances around that, and you might start to find some answers.
To make practical things feel a bit more holistic, make a bit of a ritual out of what you feel like you have to do but don't want to. For example, Sunday evenings, you can set yourself up for the week ahead in lots of different ways: do some hand cream, check through what’s coming in the following week, what's going out the next week, does it all balance up? It can help to go into Monday knowing that everything's in hand.
Willpower and habits are stored in two very different, far away from each other sections of your brain. So it's about nurturing the habits rather than just trying to run on willpower.
RESOURCES:
You can follow and connect with Clare at:
Instagram: https://www.instagram.com/myfrugalyear
Twitter: @claremseal
The Wallet: How Am I Repaying My £27k Credit Card Debt?
Resources featuring more advice from Clare:
‘I've knocked £10k off my debts in a year - and these are the money-saving hacks I swear by.’
Why taking care of your finances is not a passive act.
The Real Life Money Journal: A practical guide to help you understand your relationship with money and take control of your finances
Order her new book - Five Steps to Financial Wellbeing: How changing your relationship with money can change your whole life.
*** Our podcast partners PensionBee are also offering you a £25 pension contribution (£20, plus £5 in tax relief) when you sign up. To claim the offer, follow this link: https://www.pensionbee.com/vestpod. Capital at risk. ***