We spoke with Esther about her personal experiences with debt, her top tips for budgeting, and the value she finds in developing financial literacy. Esther is the founder of Boss of my Money- a platform she utilizes to offer finance advice and coaching to women.
Q: What is your current position/role and when did you first develop an interest in finance?
A: I’m a budgeting expert and the founder of Boss of My Money. I’m a UK finance blogger, I help women, families, and couples to develop their financial literacy while helping them achieve their financial goals.
The first time I developed an interest in finance was probably around 2011 when I watched Suze Orman on the Oprah show. It was two women talking about money, and on that particular show there were lots of other women and I was intrigued by the conversation. It was the first time that I heard money talked about in that way: budgeting, and not being okay with debt, and planning for the future. I was so inspired by the show, it was all new to me. I was 23 and had just started my first job where I felt like I was being paid a lot of money. I felt that like I had that money, but I wasn’t really doing anything with it, I was just spending. So, I began to listen to Suze Orman’s podcasts and bought her book Women & Money— it convinced me to pay off my student loans. A few years later I paid off my student loans, but I didn’t change my money mindset. I was earning so much that I just felt like I could keep spending. Eventually I got into a lot of credit card debt. I began living in the vicious cycle of debt. I always say to people, “it’s okay to pay off debt, but you have to have a plan after,” otherwise you pay off the debt and then you get back in it again.
Q: What challenges have you faced with personal finance?
A: One of the first challenges is being very good at making money but not knowing how to manage it. You would never buy a car and drive it without learning how to drive.
We study for years and we get trained in different careers, but we never learn how to actually manage the thing that we get from the thing that we studied from the career that we spent years training in.
No one teaches you how to spend your salary, so that was my main challenge, I didn’t have the tools to manage my finances even though I had a good salary.
Another challenge I faced was debt, specifically consumer debt. I would spend my salary and my credit card was like my second income stream. I used my credit card to pay bills, buy petrol, buy food, buy gifts, and go on holiday. I was completely oblivious to the idea that I had to pay that money back and then some. I had £18,000 worth of credit card debt and I defaulted. I was in a horrible place and nothing prepared me for that. Thankfully, I found an organization in America, a financial literacy organization, called Clever Girl Finance – I couldn’t find anything in the UK. That’s what helped me to change my money mindset, being around other women who were in similar situations or who had achieved their goals inspired me in my journey. So financial literacy is what helped me to become completely debt free.
The final challenge I will mention is not knowing how to say no and people pleasing. I love to give and oftentimes I would give out of need instead of abundance. For example, I would lend someone my rent money if they were in need because I just wanted to help them – even though I almost got evicted from my own home 3 times. After the third time I dug deep, and I realized that I had a need to please and a need to feel wanted, so I had to accept that I was good enough as opposed to trying to get other people to validate me through giving money to them.
Q: If you could give advice to your 18 year old self about managing your money, what would you tell yourself and why?
A: I would say to budget. If I had just learned the basics of budgeting it definitely would have helped me. Just knowing to track my expenses, live within my means, and be accountable for my spending.
Also, understanding how financial systems work. For example, how to use credit cards. They’re not really there to help me, but there is a way that I could use them to benefit. When I was young, in my 20s, saying that I had a credit card was like saying that I had a Gucci bag. I can imagine myself saying to my friends, “Oh no worries, I’ll just put it on my credit card, and they’re like “That’s pretty cool.” No, it’s not cool, because I have to pay interest on it and I already don’t have the money. So just learning from an early age how credit cards work and how I can use it to build my own financial success as opposed to making the banks richer.
Q: What is your top tip for budgeting?
A: It is to have a weekly money day for your budget. No matter what method of budgeting you use, it’s important that you have a budget day or a money day where you come back and review what you’ve written.
When you make time for your budget and review it regularly you can see what’s working and what’s not working, whether you’ve over budgeted or under budgeted, and you can make changes quickly.
What often happens is that we create a beautiful budget, which is something I was very good at doing – I would create the most perfect budget and then payday came, and I would completely ignore it. So, once you create your budget having a set timeframe where you sit by yourself or with your partner, or with your family saying, “what have we spent money on this week,” and tracking that. Most of the time a budget doesn’t work because people create a budget and don’t go back to it. If you have a plan you have to use the plan for it to work.
Q: What do you think is the most critical step to ensuring financial independence?
A: The most critical thing to do is to pay yourself first, no matter what income you’re at, start to pay yourself first from day one. More than just saving a large amount of money or investing a large amount of money is building the habit that when you get paid, a percentage of that is not yours to spend.
So, I would say if you can do anything, or if you can just start with one thing, start paying yourself and your life and money will thank you for it.
Q: Is there anything you would like to add?
A: Words of encouragement, because we are living in a really challenging time. I’ve been there so I know what it’s like to not have enough money to pay bills, to be in a place where you could be losing your home or have debt and now know how to pay it.
I just want to remind everyone that what’s happening now is seasonal, we don’t know how long it will last, but life isn’t going to be like this all the time. You should try to do what you can with what you have and give yourself grace, don’t beat yourself up, just see this is a temporary situation.
Also, ask for help, don’t go on this financial journey alone. I learned so much from the women in the community that I joined, things that I didn’t know that would have probably taken me years to know. Just do your best, your best is okay.
Make sure that you look after yourself because you are your biggest asset, so keep developing your financial literacy, even if you’re not in a position to apply it.
If you start to develop the literacy now, when you become ready to use it, you’re going to go in to auto pilot mode because you have the skills, you have the knowledge, you know what questions to ask, you’re more prepared for the situation, and so when you get there, you’re just going to soar like an eagle. Utilize the financial literacy tools that are available and just keep growing and keep learning.
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