Connecting with CleverGirl Finance

1.What is Clever Girl Finance about?

Clever Girl Finance is a financial empowerment platform to help women take charge of their finances and lay a solid financial foundation for their future. Clever Girl Finance has two main objectives to help women take charge of their finances. The first objective is to provide women with financial guidance, financial tips and budgeting tools to inspire them to pursue their dreams of financial independence. The second is to provide aspiring and established female entrepreneurs with advice, tips and tools on running a financially successfully small business. In addition, Clever Girl Finance offers financial coaching and accountability for individuals and small businesses to help them create and execute a solid strategy for financial success.

2.What gave you the confidence to build an online platform?

When I created Clever Girl Finance I just wanted to create a way to educate women about their personal and business finances and provide them with the right tools to make informed decisions. I took a leap of faith and didn’t focus on perfection. Finance is one of my favourite topics and so I’m confident in the fact that I know what I’m talking about especially when it comes to my personal experiences with money. From my successes to my failures both from a personal and business perspective 0 i’m using that as my platform. I also continue to grow as a person and business owner everyday and I’m investing in myself and my knowledge as I continue to establish myself and my brand.

3.Why is it important to have a strong relationship with money?

Simply said, your relationship with money is tied to the quality of life that you can live. Money determines what you can do and what you can’t do in life. A lot of people take this simple fact for granted and end up just getting by and being unhappy about it. We all make decisions around money every day, and being a little strategic about those decisions can make all the difference for our future selves and the type of lives we get to live.

4.Housing prices are currently increasing and more young people are renting. How can a young person save for a house?

I’d say set some goals – find out where you’d like to purchase a home, what the home prices are like and what is required for a home down payment. Then do some analysis on your budget and figure out how long it will take you to save for the downpayment based on a few different saving scenarios. How much can you put away each month? Can you consistently put away the same amount? Will you be getting any additional funds? However before you even beginning worrying about a downpayment though, you want to make sure home ownership is right for you based on your current life and financial goals by asking yourself 3 key questions.

Question 1: What is the estimated monthly cost of owning your home vs. what you currently pay in rent?
Renting a home usually come with fixed costs so you typically have an idea of what your utilities are each month and if there are any unexpected repairs then you just call your landlord. Simple.

Well when you become a homeowner, in addition to your mortgage and utilities, you are responsible for all home maintenance (think grass cutting, landscaping, snow removal etc) as well as any repairs that need to happen (and repairs do come up – ask any homeowner you know and they’ll tell you).

So you need to build in a buffer to your monthly budget to expand your emergency fund to include needs for your home. Can you do this?

Question 2: Can you afford the down payment?
Depending on what kind of loans you qualify for, you will be required to make a downpayment of around 5% to 20%. In addition, you may be liable for some closing costs AND there is also the cost of moving. These are all costs you need to take into consideration before you begin house hunting – can you afford it? And if you can’t right now, how long will it take for you to save the amounts you need?

Question 3: How long do you intend to live in your home and what if you had to stay longer?

It’s important that you have an idea how long you intend to stay in a home because aside from wanting a place to call their own, one of the main reasons people buy homes is for financial purposes so they can build equity.

However, equity takes time to build and after only a couple of years, you may not have built enough or any equity in your home. So if you move too soon after you buy, you could end up losing money after you factor in your initial purchase expenses and then your selling and moving costs.

Homeownership is great and is definitely something to consider including in your wealth portfolio but remember, you need to plan accordingly and be ready to stick with it for the long term in order to realise the gains of homeownership.

5.How do you stay disciplined with your money?

I automate my finances – I think that’s the biggest thing for me. Automating your finances makes  things so much easier  because you don’t have to think too hard about it and your money is put to work for your immediately – bills are paid, savings are done. I highly recommend it.

6.What is your top tip for young professionals who have a monthly/weekly salary (per annum)?

Automating their finances – especially since they have a steady income – starting out it does not have to be 100% but for fixed bills and for savings automation can save them a lot of time and keep them on top of their money goals. I also stress staying away from credit card cards and if they have any debt credit cards student loans etc creating a plan to pay it down as quickly as possible.

7.For young people who are experiencing debt is it too late to save money?

It’s never too late to save money but it’s important that young people have a strategy for their debt AND save for their future selves at the same time.

They can start by finding out their total debt and what the interest rates  are. .Then they’ll need to create a monthly budget and factoring their debt load into the budget in addition to their essentials / needs and seeing where they can cut back to see what extra funds they can funnel towards their debt. I suggest leaving a little wiggle room in the budget to do things they enjoy and so don’t resort to racking up more debt – A budget should not be punishing. There are several online calculators that will help determine how quickly a debt will be paid off given how much one can pay on a monthly basis.

Secondly they ensure they have a buffer for emergencies and start planning for their future selves by saving for retirement. To start, while they pay down their debt I would recommend they build up an emergency fund of at least $1000 dollars thats easily accessible in the event of an emergency like a car breaks down etc. They should also start contributing to their employers retirement plan e.g. 401k. In addition to the pretax benefits (lower taxable income) they can also take advantage of their company match (many company’s offer one) which is basically free money. If they don’t have access to an employer retirement plan they can do some research to find out what types of self funded retirement plans exist (for the UK) and create a plan to start contributing the minimums there while they pay down their debts.

8.What would you tell your 25 year old self about spending money?

Don’t buy as many handbags lol. I’m a saver by nature so I’ve always been pretty good with saving money. Right out of college I was able to save over $100,000 in less than 3.5 years by contributing to retirement accounts, saving over half of my income, keeping my expenses low and starting a side hustle but i also had a big handbag weakness and I think over time I could have saved a lot more if I had toned it down a little bit.

 

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