Editor’s note: You, friend, already know I’m very interested in the softer side of money management, including the way our relationship with money shapes our financial health and wealth. Here is a wonderful guest to share the evolution of her relationship with money: from a saving child, through a credit card-wielding adult, to building a mature attitude to money. Lynn from Mrs Mummypenny is not only a good friend of mine; she is also a woman, and a blogger, on a mission and an inspiring story to tell. Lynn Beattie is also the author of The Money Guide to Transform Your Life: a combination of a brutally honest personal account of her relationship with money and sound, down-to-earth tips on how to improve your relationship with money. Please, make her welcome.
My relationship with money as a child
As a child my relationship with money was great. I used to obsessively save my birthday, Christmas and pocket money. I opened a Bradford & Bingley bank account aged eight and would pay in my saved money as often as I could. I remember checking my passbook lots, watching the balance grow and seeing the interest being added.
I went out and got a job as soon as I could, aged 14, I was working in a shoe shop every Saturday. My first job and I have never stopped earning since then. I was able to buy whatever I wanted with what I earned, my own clothes, drinks with my friends (yes, I started young). I had financial freedom from a young age.
Life Changed Overnight
But then my mum died suddenly, I was 16, still working in the shoe shop. In fact, I went into work the day my mum died (I was brought straight home by my wonderful boss). Life changed overnight. I was the only child left at home with my helpless dad. I become the carer, the homemaker, looking after the shopping, cooking, cleaning, clothes washing. I also managed the household budget.
The loss made me more determined to do well in my A-levels and to get away from this life that had gone so wrong. I got the grades I needed and went off to university 300 miles away in London. I was to study maths with statistics and management for four years. I even chose to do a sandwich degree which meant I could work for one year of the degree course.
Money Sense Stopped
This is where the money sense stopped and my relationship with money went bad. I started university in 1995, I got a full grant, I was also getting an allowance to pay my rent and bills each month from my dad. I went straight to the Student Barclays Bank on campus and opened an account with a big overdraft and opened a credit card. My first experience with debt. It was the easiest thing in the world to get at this money. It was free, no interest to pay on the overdraft or the credit card.
Suddenly I had lots of money I could spend, so I went out and spent it. I bought a new stereo for my tiny university room. I bought a stack of clothes in Topshop, at the till they offered me a store card and a way of delaying the repayment of the clothes. I signed up and was accepted.
Just to make my mental wellbeing that much worse at the end of my first year of university my dad died. Again suddenly, of a heart attack. I went into a spiral of spending way more than I was given in grants or earning from my part-time job at the pub or from my work placements. The spiral of ongoing credit card debt began all the way back at university.
Graduation and Working Life
I graduated in 1999 and went straight into a well-paid job at HSBC. I was to study for my CIMA accountancy exams. My 20’s were spent earning good money but spending more and always living with credit card debt. I wanted a material life, I wanted the designer bags and clothes and the nice holidays.
I also wanted the security of a house and some savings, so I bought my first house when I was 23 and started putting money in a stocks and shares ISA at 22. I was very sensible some of the time then frivolous some of the time.
Marriage and Babies
My 30’s were a more sedate affair. I got married, had three babies. My career continued to progress and by the age of 38 I was a senior commercial manager for EE in London. But still the credit card was forever present, it would go up and down. At points it would be high but a bonus would pay it off or I just managed the hundreds of pounds payments per month. Working a stressful full-time job in London with three young children was tough. I wanted to spend more time with my children but there was no way out, I was tied to my corporate job and corporate salary to maintain the life I was living.
Redundancy and the Launch of Mrs Mummypenny
An opportunity arose, redundancy! I had worked for EE for 5 years on a good salary, so I knew the redundancy payment would be high. It took me a few months to negotiate it, but I finally got redundancy agreed. I had been running Mrs Mummypenny as a hobby for a couple of years and knew it has potential to build into the most incredible business, but I needed to work it full-time.
I took that redundancy money and invested some into my business and it paid the mortgage for the next 18 months, until my business was earning enough to pay my half of the mortgage. But the spending continued for too long as if I was still earning my corporate job. We went on holiday to Las Vegas and took the boys to Spain for 2 weeks.
April 2017 was the crisis point where my mindset changed. I’m not sure what did it. We had just returned from my expensive 40th birthday trip to Vegas and I sat down and face those credit cards. They had built up to 15.5k.
Maybe it was the influence of the many personal finance writers whom I speak to most days. Maybe it was turning 40 so it was time to get fit physically and financially. From that day forward, I vowed to pay down that debt and change my attitude to money.
Debt Repayment and Financial Awareness
Fast forward to April 2018 and nearly 10k of that debt has been repaid. I have shifted my financial mindset to a place where I now want and need that debt to be repaid. I have an emergency savings fund of £3k. I have another skimming saving account taking chunks of money from my bank account every week and I have a stocks and shares ISA. I am even looking forward to paying some money into my pension and over-paying the mortgage, once the debt is gone!
I have a business that is successful. I am my own boss, fully in control of my destiny. I am in a good place financially in reality and in my mind.