Catherine & Her Money Story
“The one that has had the biggest impact on our financial situation is that my husband and I have both contributed to our pensions at around 10% of our income ever since we started working. After nearly 18 years, that has meant that we’re pretty much on track for a comfortable retirement which gives me great peace of mind.”
Can you please tell us a little bit about yourself?
Hi I’m Catherine, I’m about to turn 40, and I live in London with my husband and two children aged 10 and 7. After working full time since I graduated, including 10 years of juggling full time work and child rearing, I’ve made the move to become an entrepreneur.
My husband and I met when we were at university - he’s American, and so we spent 6 years living in Boston, Massachusetts just after we got married, and moved back here 10 years ago. We will celebrate our 16th wedding anniversary this year!
What’s your relationship like with money and personal finance?
I grew up in a single-parent household and there wasn’t a lot of money around, but my mother is also extremely frugal and managed to keep everything ticking over. I was fortunate enough to be the last year to receive financial aid from the government towards my university education although I still ran up a fair amount of student debt just covering my living expenses. I guess these experiences have made me reasonably cautious with money - and well aware of how precarious it can be to not have a financial safety net. I would definitely say that until I got married, I was consistently in a worse financial situation than most people I knew!
I got married at 23, which may seem very young, but we’re still together so it definitely counts as a great decision! What it does mean also is that for most of my adult life, I’ve managed my finances jointly with my husband’s, although it’s probably fair to say that I manage most of the day to day decisions. All of our finances are pooled - we tried separate accounts at the very beginning but soon found it easier to switch to everything being shared jointly. We’ve been very fortunate that since our marriage, we’ve been in a stable financial situation that has allowed us to focus on building our net worth and our retirement fund. I’ve always kept a very close eye on our finances, and have been tracking our net worth regularly for about 12 years now.
I always believe in complete transparency and honesty in a relationship when it comes to money. We always discuss bigger purchases with each other, but there’s enough trust in the relationship that neither of us asks “permission” to treat ourselves. We both know what our budget is and we operate within that, for the most part!
I have a very low tolerance for risk which means that my financial management has been more about saving regularly than taking large risks.
What does financial independence mean to you?
Financial independence means having enough of a safety net that any eventuality is covered - my father died at a very young age, hence the financial constraints I faced growing up.
Independence to me means that we’ve planned for the worst so can relax and enjoy life. It also means having the opportunity to have great experiences - whether that’s travelling or enjoying meals out with friends.
Budgeting - do you follow any guides, or are you more of a freewheeler?
I’m a bit of a lover of spreadsheets I’m afraid, so I do have a detailed budget. It’s based on the 60-10-10-10-10 principle and I’ve been using it in one form or another for about 15 years.
When we were both working full time, I tended to be more lax in terms of monitoring it closely, but at times when we’ve been on one full time income (like maternity leave or now, when I’m building up my business) then I do monitor it closely, as well as using a cash-flow spreadsheet to monitor our current account.
What’s the one thing you indulge in?
Expensive bath oil and as many massages as I can reasonably get away with! Oh, and eating out is a definite love that my husband and I share.
What is the best financial decision you have ever made?
There are a couple - the one that has had the biggest impact on our financial situation is that my husband and I have both contributed to our pensions at around 10% of our income ever since we started working. After nearly 18 years, that has meant that we’re pretty much on track for a comfortable retirement which gives me great peace of mind.
One of the decisions that has been the most satisfying was that on the day that the stock market tanked during the crash of 2008, I had this notion that we should buy Google and Apple stock. As I’ve said before, I’m a very risk averse person when it comes to finances, so I don’t do much in the way of direct stock trading under normal circumstances. I tend to invest in index funds. However, on this occasion, I couldn’t believe that Google and Apple weren’t going to bounce back and their stock was at a historic low, so we put in $7,000 (we were in the US at the time) and all in all, that yielded around $26,000 in a couple of years.
One more thing - I have successfully negotiated a pay-rise three times in my career. Definitely worth asking especially if you can put the emphasis on the value that you have added to the company.
Have you ever experienced a financial epiphany? A sort of wake-up call, where you suddenly think - “I must start doing things differently”?
When I first started working in London, I was on a very low salary and I would regularly run out of money by the middle of the month. I remember one time that I had so little in my account, I couldn’t get a £10 note out of the ATM, I had to go into the bank and get £5 from the teller, money that I needed to buy a ticket home.
I think that embarrassment made me very conscious of the need to get control of my finances, and find a way to not live at the bottom of my overdraft!
What is Vestpod for you?
What I love about Vestpod is that it empowers women to take charge of their own financial situation. I know so many women who don’t engage with their finances and as a result end up not in control or stressed instead of feeling empowered.
Own up. Have you made any major financial faux-pas?
Well, I wasn’t brilliant with credit card debt when I was at university - I had a couple of cards which I ran up to their max, and ended up paying the minimum amount each month which wasn’t even covering the interest that was accruing. It’s made me very wary of credit cards - we definitely have them and use them but we always pay them off in full each month.
Interestingly one of the worst decisions we made financially was buying a house in the US in 2004. It was at the time where you could get mortgages up to 95% of the value of the house and we bought at the top of the market - a huge (by London standards) money pit of a house that we sank a lot of money into. When we went to sell it in 2008, we were only able to sell it for what we paid for it, despite a new roof, boiler, kitchen, windows, doors etc. etc.
However, despite us effectively losing that money, we have a lot of fond memories of that house - we were able to host family and friends, and it was the house we living in when my son was born. So even though we would have been so much better off financially if we had rented for four years and banked the renovation money instead, it goes to show it isn’t always about the numbers.
Favourite book & podcast?
I can highly recommend Jen Sincero’s “You are a badass at making money” for anyone who needs to look at their relationship with money - she has a really great style of writing and a no-holds barred attitude. She reads the audio book which is excellent.
Podcast - totally not money related, but “My Dad wrote a porno” has got me a few strange looks on the tube from laughing away to myself. Definitely a must-listen for some light relief.
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