Money Matters 2024 - Cultivating Wealth
Our third panel discussion was chaired by journalist and writer Marisa Bate, and featured Emma Maslin, Nafisa Bakar and Kia Commodore. The discussion covered overcoming financial worries, understanding what influences our views on money, looking at the costs of raising children, balancing enjoying life now with saving for the future, and discussing when it's okay to spend on treats and luxuries.
financial fears
Emma believes that social media plays a significant role in many of the fears her clients express to her. She notes that the fear of not keeping up with peers, coupled with the pressure to have one's life together at a certain age, has become a widespread issue due to the global reach of social networks. People often compare their own progress to the seemingly perfect lives portrayed on social media without considering the effort behind getting to live such lifestyles.
In Nafisa's experience with mentoring founders, she has observed that many people struggle to envision and pursue ambitious financial goals, both personally and in their businesses. She sees this struggle with societal norms surrounding money and the structural and systemic barriers that particularly affect women, such as imposter syndrome. These challenges are not solely individual but are also deeply rooted in how individuals, especially women, perceive themselves in professional spaces and what they believe they can achieve.
Similarly, Kia has encountered numerous young individuals who have been instilled with financial fears from a young age. Some have been taught to avoid credit cards and overdrafts at all costs, while others have inherited a cycle of debt. These early lessons and experiences shape their beliefs and behaviours, making it difficult for them to envision a different financial future.
breaking the cycle
In addressing these deep-seated beliefs and fears, Emma, as a coach, points to the importance of rewiring one's belief system about money. She says that our beliefs about money are primarily formed in our early years based on what we observe and experience, particularly from our parents or primary caregivers. This programming occurs before the age of seven, and she stresses the need to address and reframe these beliefs to achieve financial well-being.
To gain a deeper understanding of one's belief system, Nafisa suggests keeping a log of every financial interaction and the associated emotions for a week. By doing this, you can identify your fears and beliefs, enabling yourself to challenge and change any that do not serve you well in adulthood.
Nafisa likens the home environment to being our initial school of money and suggests the concept of creating a new school through the people around us. She points out that research indicates women are more inclined to act on financial knowledge when it comes from family, friends, and peers, while men are more responsive to information from media sources.
Nafisa shares an experience from her early days in business, recalling a webinar focused on managing wealth and exiting as a founder. Witnessing others confidently discussing multimillion-dollar figures made her realise the impact of socialisation on one's perception of money and financial goals.
This is why Nafisa talks about the importance of open conversations about financial ambitions and goals with peers, as well as formalising these discussions into regular meet-ups to share investment aspirations and portfolio details.
Kia says that she recently hosted a workshop with a group of amazing ladies and shared insights on setting short-term and long-term financial goals. She believes in breaking down long-term goals into manageable steps, even if the starting point seems challenging. Kia encourages the audience to define their goals and identify specific actions to take in the next six months to move closer to their short-term objectives. She talks about the significance of open and comfortable conversations about money and financial topics, acknowledging that the process can be intimidating but is essential for financial empowerment.
“I’m absolutely fine if my children were to say to me, how much do you earn? I’d tell them. I think it’s just really important that we have an open and honest conversation because many of our generation were told, don’t you ask that person how much they earn. That’s rude, right? But where does that leave us as women?”
passing on our wisdom
Emma believes it's crucial to talk to kids about finances. She knows it can be tough but thinks it's important to pass on the lessons we've learned. Emma points out that today's world is different from when she was young, especially with the internet and social media. Her children, aged 12 and 10, already have mobile phones and are influenced by many things outside the home.
Emma stresses that parents should be the main source of their children's education about money. During the lockdown, her kids saw her making videos about finances and even made their own YouTube content. For example, her seven-year-old once explained pensions in a video, repeating what Emma had taught. This showed Emma how useful it is to discuss money in a way kids can understand.
She used the pandemic as a chance to teach her children about economic changes, asking them which companies might do well, like Amazon. Emma explained investing simply to her children: buying shares in companies they think are doing well. This helped her kids grasp basic financial concepts.
Emma thinks money is still a taboo subject and that we should talk about it more openly. She points out that while people might discuss personal topics like sex, they rarely talk about their earnings. She is open with her children about her income, challenging the idea that discussing money is rude, and believes this openness is important, especially for women negotiating pay or addressing the gender pay gap.
Nafisa highlighted the importance of helping young people, especially those aged 16 to 18, understand healthy money habits, given they might not have had these discussions at home and are often influenced by platforms like TikTok. She mentioned her experiences with teens at her Taekwondo club, noting that many still aim for traditional careers like medicine or engineering because of outdated school curriculums.
Nafisa pointed out that today’s youth are eager to make money due to the influence of social media, which shows them what money can buy and the experiences it can offer. She shared that she often talks about money with her four nephews and niece, emphasizing the need to show young people the various ways they can earn a living. Traits that might be seen as disruptive in school, like being talkative, can be valuable in careers like public speaking.
She also stressed the importance of making these money-making opportunities accessible. TikTok, for example, features people earning money in unique ways, such as the pool guy who cleans pools for a living. By exposing young people to a wide range of career options, they can develop healthier attitudes towards money. This broader perspective is beneficial for adults too, many of whom might not have considered business or entrepreneurial paths until they encounter accessible resources.
living in the moment vs. saving for tomorrow
Kia talks about finding the balance between living in the moment and saving for the future, which she finds quite challenging. She notes that living in the moment is becoming more expensive, making saving harder. Simple advice to just put money away feels increasingly difficult to follow. Kia shares her tips on how to strike that balance.
Kia recently returned from a holiday in Zanzibar, and she believes in both saving and spending wisely. She thinks it's important not to deprive yourself of making memories, especially when you're young. While it's essential to save for goals, like buying a house, she doesn't think you should miss out on all experiences just to save money.
Her strategy is to have a consistent saving habit. She suggests picking a percentage of your income to save each time you get paid, whether it's 5% or 10%. This method works even if you have a variable income, like from part-time work. Alongside regular savings, Kia also puts money into a "fun fund." This is money set aside specifically for activities she enjoys, such as travelling. This way, she doesn't dip into her savings for fun expenses.
Kia finds that planning both fun and savings into her budget makes life easier. She encourages everyone to see the world and pursue their passions without feeling guilty about spending money. To avoid the common mistake of borrowing from savings and never putting it back, she advises having a separate fun fund. This ensures that you can enjoy life and still save for your goals.
Emma highlights the benefits of starting to save early, particularly for pensions. By beginning in your 20s or as soon as you start earning a regular income, you can take advantage of compound interest, which helps your savings grow significantly over time. She notes that money well invested can roughly double every 10 years. Starting to save at 20 versus 30 can result in a pension pot that's twice as large, showing the value of early savings.
For those who feel they've started late, Emma reassures them that the best time to start is now. She mentions tools like PensionBee's calculator, which can help you understand how much you need to save monthly or as a lump sum to reach your retirement goals. This tool allows you to plan backward from your desired retirement age, showing what steps you need to take now to ensure financial security in later life.
analysing your money situation
Emma goes on to highlight the importance of constantly analysing one's financial situation. She shared that in her household, they have "money dates," a practice she also teaches her clients.
Emma explains that having a vision is crucial. Money is merely an enabler, helping us live the lives we want. Everyone has a unique vision of what a good life looks like. The first step is to get clear on what you're aiming for. Many people struggle with this due to FOMO (fear of missing out) and societal pressures. But clarity about one's goals is essential.
Money dates are a tool to help achieve this clarity. If you're in a partnership, it's important to sit down with your partner and check if your goals are aligned. Personal and joint goals should be reviewed regularly to see if they have changed and to ensure you're working together. Even if you're not in a partnership, having a money date with yourself is valuable. Ignoring your finances is not effective; instead, treat money like a best friend. Spend time with it, nurture the relationship, and it will positively reciprocate.
Q&A
An audience member asked how to manage a "money date" with a partner who doesn’t believe in it and thinks it's a waste of time.
Emma explains that everyone views money differently, often due to their past experiences. She notes that money is a common cause of arguments in relationships. Therefore, it’s important for partners to understand each other's financial perspectives.
To help with this, Emma suggests writing a letter. Each partner can share their early memories and beliefs about money. This approach is less confrontational than a direct conversation and helps partners understand each other better. For example, someone might explain that their sister used to take money from their piggy bank, making them feel they need to spend money quickly before someone else does.
Emma stresses that there is no single "right" way to handle money. It's about recognising each person’s strengths and challenges. By understanding each other's financial backgrounds, couples can work together more harmoniously.
Another audience member then asked what each speaker wished they had done earlier regarding money.
Kia reflected on her entrepreneurial days in secondary school, where she made £250 a week selling cookies and doughnuts, but she wasn’t taught about investing. She started investing at 20 after asking her dad for advice, though his methods were outdated. Kia wishes she had started investing at 18, recognising the benefits of compound interest and having her money work for her.
Emma shared her regret about not setting clear financial goals sooner. She ran her business for a few years without a concrete target. One year, she set a goal of making £100,000, threatening to close the business if she didn’t achieve it. This focus led to a £100,000 partnership. She encourages everyone to set clear financial goals, including savings, earnings, investments, and fun money.
Emma also reflects on the financial impact of motherhood. Before her first maternity leave, her pension was similar to her husband’s. However, taking extended leave, working part-time, and being self-employed without employer pension contributions affected her finances. Emma wished she had saved more in her 20s to lessen this impact, which is why she advises young women to be aware of these potential financial penalties and make informed choices early on.
Cherise singing at Money Matters. Credit: KOKO
Our media partner The Financial Times. Credit: KOKO
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At JPMorgan Chase, we believe that we have a responsibility to harness our business and policy expertise, research, data, talent and global presence to help create greater economic opportunity for more people.
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