Finance

A 2-post collection

First vs only

Earlier this year Elon Musk became "the world's first trillionaire".*

That wording made me pause.

The use of the word "first" inherently implies that there will be more.

More trillionaires?

I would rather write "the world’s only trillionaire".

"Only" does not imply momentum.

"Only" implies uniqueness. Isolation. Loneliness.

It takes the edge off the statement.

"First" suggests we might want more trillionaires.

We don't.

* In desperately sad news, Musk's trillionaire status has fluctuated, and shortly after the IPO he lost it.

Personal finances and the 8th wonder of the world

This week I have been working on my personal finances.

Personal finance is a topic I haven’t spent much time on, and I haven’t spoken about much.

Most of what I know about personal finance I have learned from books, business, and making mistakes.

For the most part I feel fortunate with my current circumstances, but the ambition within me causes me to rarely stay satisfied for long.

I‘ve noticed myself fall into a common trap: lifestyle creep. As one earns more over the years, it’s easy for spend to increase in line with any increase in earnings.

I don’t think I’m extreme here — I am not buying yachts, or even cars, but it’s all relative. A rare treats becomes a regular treat. Which becomes a habit. Which becomes hard to remove from your life. In my reflections this week I could see several instances of treats that had become hard-to-remove habits. It was a wake-up call.

Learning to budget

I’ve never been very good at budgeting, but I thought a good place to start would be to adopt a simple high level goal: spend less than I make.

Spend less than I make.

That sounds pretty simple, right?!

Except… in today’s world, I haven’t found this easy at all — to even know how much you are spending is hard.

There is so much to juggle and understand: get a credit card, get a current account, get a joint account with a partner, get a savings account, pay a mortgage / rent, pay recurring payments, bills, subscriptions, direct debits, transfers, donate to charity, pay tax, and maybe even go on holiday and spend money in a different currency once in a while.

Even with great tools to track my spending (I’m a huge fan of Monzo here in the UK), I still find it hard to truly know what I’m spending during a month.

Not only have I found it difficult to understand and get a baseline of my spending, but I have also found life getting more expensive. “Inflation” has been mentioned a lot in the UK news cycle for as long as I can remember, but I never fully understood its implications.

Taking action on my spending

I won’t bore you with everything I‘ve learned, but I will jump to a few realisations and actions and I have taken since drawing my attention to my finances more intently:

  • Plan my meals at the weekend for the week ahead.
  • Don’t get a coffee out every morning. Make one at home and bring it on my dog walk.
  • Make avoiding spending fun — set a budget goal for the month in Monzo and try to stick to it.
  • Buy good quality ingredients at local shops on Saturdays. Combine this with a meal plan and I have no excuse for getting a takeaway mid-week.
  • Question everything I spend on. Do I need to