Thursday, 10 January 2019 09:35

Julie Lord: Good Financial Planning's enemy is bad spending

Rate this item
(1 Vote)
Julie Lord of Magenta Financial Planning Julie Lord of Magenta Financial Planning

When I was considering what to write for my column, I thought you might be interested in hearing about the “No Spend Challenge” at Magenta.

Before you start thinking that we have been working in darkness or scrimping on the Welsh cakes for client meetings, it has been a client focused initiative that has yielded interesting results and made us think harder about the services we offer.

We asked a number of clients to keep a spending diary during October as we wanted to find out what people spend their money on. No spending
without recording the spend, if you like. We do detailed cashflow forecasts for clients but at a high level. We wanted to dig deeper into what sort of discretionary spending clients were making day to day and how their purchases ‘felt.’

Most clients were shocked to see how much they frittered away. Many reported that they found evening internet shopping addictive and some pointed to the scary ease of payment through contactless and Apple Pay. There is quite a lot of guilt around this sort of expenditure and, even in young people, it can be as much as £50 per week.


We don’t want clients feeling guilty about spending their money, but we can help them to budget and quantify a guilt free, fun spending account. Budgeting isn’t always about spending less — it’s about being organised and spending on things and experiences that are most important and enjoyable.

Everyone agreed that having to write down what they spend was a great way to stop them making impulse purchases. One client in particular is renowned for buying gifts for family and friends. It gives her joy, but in doing the ‘no spend’ challenge she discussed her spending habits with her family and found that although they were always appreciative they felt uncomfortable in constantly being bought things. She was shocked but now feels a sense of freedom in knowing that a visit to family doesn’t always need to be
accompanied by gifts.

It is clear from our experiment that poor organisation is expensive. Clients who are poor with time management have a tendency to choose grab and go options for lunch and often eat out or order take-aways due to bad planning.

Sharing our time management tips can only have a positive impact in helping these clients achieve financial independence and pursue more valuable life goals.


* This column originally appeared in the latest issue of Financial Planning Today magazine click here to download and read the full magazine. 

Julie Lord is chief executive and a founder of Magenta Financial Planning in Bridgend, South Wales


FREE. Get more stories like this daily to your inbox. Unsubscribe at any time. Sign up now.

Add This email address is being protected from spambots. You need JavaScript enabled to view it. to your address book to ensure email delivery. Thank you!


Read 1140 times Last modified on Thursday, 10 January 2019 09:42
FINANCIAL PLANNING JOBS - Advertise your vacancy from £99 ex VAT
Reach 12,000+ professionals by advertising your vacancy with us. Set up an account and post your job the same day. Big savings for advertising 2 or more vacancies.
Special Offer: Use code 'FPJSaver10' on checkout to save on selected packages. Click for details: