With years of experience within the financial industry, how does a Financial Coach work on their personal goals? In this episode of Abdul Asks, we talk to Rachel, our in-house Financial Coach at Claro about her goals, timelines and top tips!
Abdul: Hi, everyone. Welcome to another episode of Abdul Asks, which is a new series where we’ll be talking to our community at different points in their financial journey to help you understand and learn more about saving investments. Claro is a digital financial coach and community that empowers you to make smarter financial investment decisions every day. Now last week we had our Investment Manager talk about her ways of working on personal finances and budgeting. You can check that out here, but today we have another guest, Rachel. Hi!
Rachel: Hi, I’m Rachel, I’m a CFP. I have been in the financial services industry for about 15 years giving financial advice to clients and now I’m Head of Planning and a Financial Coach at Claro. I would say I’m helping with the development of the financial planning project and building the team.
Abdul: Welcome to the team! One of the questions that we ask everyone who is coming on to this new series is to talk about your current financial goals. what are they currently and how does that fit in with your life at the minute?
Rachel: At the moment, my main goals are to save for my childrens’ future. So that could be a house deposit or for university but basically just to give them a good start in life. I want to pay off my mortgage and also save for retirement. So they’re my three main goals at the moment.
Abdul: Amazing. And do you have a timeline for these goals?
Rachel: Yeah. So really all of them are what I class as longer term goals. And, for me, that’s over 10 years really, before I’m going to fully achieve them. So, my children, I’ve got two little girls, and they’re six and four. Any money that I’m saving for them, they’re certainly not going to have before they’re 18. And probably a little bit after that. So obviously that’s going to be in 10 years and then the same for a mortgage. You know, it would be nice if I could retire within 10 years, but it’s highly unlikely.
Abdul: Hopefully. Given these timelines that you have spoken about, have you currently allocated your available savings against these goals?
Rachel: So when I’m looking at how much I want to save towards our goals, the first thing that I look at is how much money is coming in and how much money is going out. And when I think about what’s going out, then I’m thinking of my non-negotiable expenses, say like mortgages and bills and all of that kind of thing. And then with what’s leftover, then I work out how much I can realistically save. Then I save that straight away. So I don’t wait till the end of the month before I save it because I’ll be more tempted to spend it obviously. So I try to save on straight away and then. Kind of like another layer to it is, if I’m saving this amount then how and when will I achieve what I want to achieve and how am I happy with that? Or how much income will I have in retirement? And am I happy about that? If not, then thinking about what will I need to do either now, or maybe in the future, to do that. So just keep reviewing it on an ongoing basis.
Abdul: That’s good. As a Financial Coach at Claro, you probably save and invest at the same time. How do you decide where you save and invest your money?
Rachel: Yeah. So the money that I own for my mortgage obviously is easy. I just pay my mortgage. That’s fine. Then in terms of my other goals, I look at being tax efficient. So I’m using my allowances, like my ICER allowance. Pension contributions and making sure I use it was a lot. And then the other thing where I allocate it from an investment perspective, because my goals are longer term, then I’m happy to invest in stocks and shares and I’ve got kind of cash in a secure fund for emergencies and short-term things that might come up. So for my allocation, for these investments and savings, I can take a little bit more risk. So, yeah, so stocks and shares are where I would put them.
Abdul: Oh, great. You mentioned risks. So how do your risk and your potential returns play into it?
Rachel: So the longer it is until I’m going to need access to the money, the more risks I’m willing to take, basically. So I want to get the best return on my money. So because these goals are longer-term, I’m quite a high risk as to where I invest.
Abdul: Oh, that’s interesting. Do you have certain values that influenced this sort of mindset?
Rachel: What’s driving all of my goals is my family. So they come first. And I think that comes through in what my goals are, personally. So saving for my children and paying off my mortgage and retirement. It’s all about trying to have a secure financial future for me and my family.
But then also, in terms of which investments I pick, then I will definitely be taking into account my values. I do more now, and going forward and previously I think ethical investing people stayed away from it a little bit. The market was quite restrictive in terms of what investments were available and maybe the performance wasn’t perceived to be, or probably wasn’t, as good as some of the mainstream funds. It felt like maybe a bit of a luxury to be investing in line with your values as well as trying to get the returns. But I definitely think that’s massively changed now, the market for ethical investing. So going forward, I’m really going to be looking at trying to invest in companies that are having a positive impact on the world. But whilst I can still get really good returns on my money.
Abdul: That’s amazing. What would be your top saving tip or money tip? For someone who’s maybe new to personal finance or hasn’t spoken to a Financial Coach.
Rachel: So my top tip is to talk about money more. People don’t but I think it’s really important because it’s just the best way to learn. So for me, I’ve got a really good friend who I can talk to about money and she’s actually in a really similar situation to me I’m in, the time in her life. So it’s always really helpful to talk about what she’s doing with her money, what I’m doing my money and get ideas – despite the fact I’m a Financial Coach myself. And I think that goes for it for anybody. If you can find someone or people that you’re comfortable talking to and you can get ideas from, and maybe people that are sometimes a little bit ahead of you as well, you can kind of see what they are doing and the outcomes that they’ve achieved. This gives you a bit more confidence, but if you don’t really have those conversations was in the first place, then, you can’t get there. So my top tip would just be to talk about money more than be more comfortable doing that.
Abdul: And that’s what we are doing at Claro – a perfect little plug! What would you say is your favourite or most useful resource that’s helped you stay in the know?
Rachel: I follow all of the usual kinds of financial publications and financial times and all those kinds of things to keep up to date on the industry and the markets and be a better Financial Coach at Claro. And all the different products and legislation and all of those kinds of things. One of the things that I did want to mention, which kind of fits in with my whole talking about money, is Claro is running a monthly competition to have a free session with a financial coach. So if anybody has questions or needs some guidance on anything to do with your finances, then I would recommend entering, seeking it a free session. Click here to enter!
Abdul: Finally, what project are you currently working on? I know you’re working on loads of things at Claro so tell us more.
Rachel: Here at Claro, I’m keeping busy developing the planning project and it’s really exciting. So this is where you’ll find me and we have some upcoming webinars to help support our claro community so stay tuned.
Abdul: Cool. Well, thank you for joining me today on the show and we’ll be back next week with another episode in the Abdul asks series. Thank you, Rachel!
Rachel: Thank you. Bye.
This information is for illustrative purposes only and it should not be construed as financial advice. When investing, your capital is at risk.
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