The Vault with Financielle - “Do I Really Need an Emergency Fund?” | The Vault Episode 64

Episode Date: May 14, 2025

Send us a textIn Episode 64 of The Vault, we discuss this week’s controversial opinion, “You don’t need an emergency fund if you have a high, reliable income”. We then dive into our listener dilemmas:💸 "Should we get quietly married before the baby comes?”💸 ”Should I reduce my pension contributions?”We celebrate a listener who almost doubled their net worth in just 18 months by staying mindful with money—even after depleting their emergency fund. Tracking the bigger picture in the Financielle app really paid off! 🥹❤️ #CommunityWin #MindfulMoneyIf you’d like to share your money win, head to the community in the Financielle app or email [e-mail] your (totally anonymous) money dilemmas to [e-mail] and we may feature yours on a future episode 💌🐝Thanks to our partner PensionBee. They’re a leading online pension provider on a mission to build pension confidence so that you can enjoy a happy retirement.Pension saving is made simple with PensionBee - you can combine, contribute and withdraw online or from the palm of your hand with their easy-to-use app. Their retirement planning tools - like their Pension Calculator - blogs, videos and podcast - all aim to help you take control of your pension and build a better financial future.When investing, your capital is at risk.Chapters00:00 Introduction02:56 The Importance of Sleep and Supplements06:12 Financial Advice: Emergency Funds15:42 Dilemma: Should We Get Married Before the Baby?20:48 Navigating Marriage and Parenthood22:54 The Importance of Tracking Net Worth27:47 Balancing Pension Contributions and Emergency Funds42:34 Final Thoughts and Community EngagementThe Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

Oh hey, Laura here. I'm just starting off this episode of The Vault to tell you about the money playbook. I used to be terrible with money, designer shoes, fancy meals, all on credit, but everything changed when I realized I needed to take control of my money. That's why I created the money playbook, a step-by-step guide to help you take control of your money, ditch the overwhelm, and create a solid plan for your future self. With three stages, survive, build, and grow, the playbook walks you through everything from paying off debt to building wealth. Start your journey today by grabbing the money playbook for 25% off with the code

vault, check out the link in the podcast description. I promise you won't look back. Now let's get to the episode. Welcome to the Vault with Financial. This is a safe space where we talk all things life and money and no topics are off limits. Hello. Hello, good morning.

You're wearing an Apple watch. An Apple watch, yeah. I thought this is new for you. I'm tracking my steps. Reintroduced. I'm not a steps tracking gal, but I decided that there are some days, I will do the school walk, but aside from that, and I do go to the gym, you don't get much movement from

me. Like I'm quite home on the computer. I've got a bit of problems with my back and sitting down for long periods of time does not help it. So I thought, I'm not doing a, I've got to hit 10,000 every day, but if I'm getting over six, I'm aiming for about six. So I think Neil did a bit of research and it was like six would make a positive impact

on health overall, because we've talked about the 10,000 step thing before, which is unrealistic for a lot of people. Well, if you're very, because you're active at the gym, but you're very sedentary if we're just, like I've done days where, like I wanted to get online earlier, so I've been like, oh, how can you do the school run?

And then I haven't moved, other than to make a cup of tea. And to go to the toilet. And get some food. It makes you realize how many steps you don't get in. If you don't make yourself go out for, it's kind of making me go out for lunch. Seeing the sun, getting like the vitamin D and stuff,

it's actually not just for getting the step count, and it's just getting out into the sun. It would be interesting to see see, because you'll be able to track back and see the days that you do in it and track you back. Yeah, yeah. Oh, I know it makes a difference, just the whole weight sitting on my lower back, you can imagine,

whereas if I'm up and moving, it's just something about it that just really makes positive impacts. But it might just start singing because I'm, it's a bit rogue and in that, I'm a bit of a fidgeter. So I'll just not realize. So Siri might come and talk to me in a minute. Yeah, it is new. I think it was free with something.

Like a vitality or a... I think it was, not me, something that Neil did. And he was like, hey, do you want this? Yeah, sure, go on then, love a freebie. I've got, I've not got it on our, I've got an aura ring that Carl got through work. And like the, lots of people are interested in getting them, they're definitely not life-changing. I would never buy one.

But I'm trying to work on sleep. Yes. So mixture between the toddler or some late nights if we're doing some work, or if we're watching some sport or something. And then we do early morning gym. So that can suddenly bookend you. And I mean, I've, I think,

Lizzie, I've shown you my sleep before and you've been horrified. Oh yeah. I've had a solid nine hours. Yeah. Well, mine's never seen nine. It's never seen eight probably as well. But interestingly, Michelle,

who I worked with at the BBC, she's got one and she was consistently getting less sleep than me at night because she was getting up earlier for presenting. She was studying it the night before, but her quality was way better, her REM and stuff. So it's really interesting. It knows, for example,

if I've had like a wine the night before, or I've had a takeaway, or I've had eaten late, it says something about your readiness and it says, do your resting heart rate. And it's fascinating to me that whilst you do feel a bit sluggish, if you've had a wine or if you've had a takeaway or if you've had sugar or if you've been dehydrated, it directly links you.

It tells you and you're like, oh, you do know that then. Oh, okay. I thought I'd get that one. I know if I, like, I don't really drink, but if I've had one, like, I'm fully aware that my sleep will be rotten. Like, I know that I've woken up and I've tossed and turned and not got that deep sleep.

And it just- You don't need a ring to tell you you're like, no, no. I don't need a ring, because I don't drink. If I do, I can sit, whereas some people that drink probably wouldn't really notice every weekend that they don't have, like, a great sleep. They just kind of go, huh.

Yeah. You know, whereas if you don't drink, you suddenly get, like, I imagine my sleep would just plummet. Yeah, sleep's very important, but we, Lucy and I are on the magnesium train. Lucy's been on it for many years. I'm catching up, but I noticed when I haven't, I didn't have magnesium, I think on Saturday,

I fell asleep early after we had a yesterday with the kids in Manchester, had a great time, but we were exhausted, did like thousands of steps and did loads of stuff. I was absolutely exhausted, fell asleep early, didn't take my magnesium and I didn't have as good a sleep. You don't wake up feeling like- No, I wake up feeling like smug. Snow white after magnesium sleep.

With all the birds flying around. Tweeting. Yeah. I thought you meant when she was dead. Oh no, well that as well. Really asleep. The deep sleep's incredible. Did you take it?

Cause I don't and I feel a bit left out. I've taken it about five times. You gotta be consistent I think. Yeah, I think it does knock you out. It's so good. I think the quality of sleep's just there. Like when you fall asleep, it kind of keeps you asleep. I think that's the thing.

You don't get the like top. You're not waking up every hour. I say tossing and turning, Lydia's like, who? She's fine. Yeah. I don't need assistance. You don't need my. But I have noticed a big difference with magnesium.

You can get spray if you don't want to take it as a. Apparently it's better absorbed through skin. Yes, I've heard that. I think I've had the spray before when I was pregnant. It was like itchy. Yeah, it stings, doesn't it people? But it's good for like doms and stuff as well. Oh.

Hmm. Good. Right, okay. Noted. Just trying to check, checking what we're doing and how much it's costing. Yeah, just more admin before bed. Yeah. And can we clarify, we are not a health podcast.

We are not giving health advice. Yeah, definitely not. Yeah, by the way, I saw that from a TikTok. So take it with the benches on. I read a research paper. You mean, you watched TikTok. I love saying that. I read somewhere and was like, no, I saw TikTok. Okay. Controversial opinion time. You don't need an emergency fund if you have a high reliable income.

Oh, who said this? It was, you made it up. Yeah. Just before we rip into the person that said it. Who said this? It was, you made it up, hopefully. Yeah, okay. Just before we rip into the person that said it. God! High income, oh God, no. We have seen time and time again how the rug can be pulled from under you. A high income is great if you don't spend it all, but then by default you'd be saving.

So what you're saying there is someone with a high income, it's fine, but you'll spend it all, but then by default you'd be saving. So what you're saying there is someone with a high income, it's fine, but you'll spend it. You just keep chasing it and chasing it. Some of our highest earners are our worst spenders in terms of not being able to save and not being able to do extra investing. And they share that with us. They kind of say lifestyle creep.

And so- Can you imagine like every year getting a really good pay rise and again, and again, and again, you can see why people then go, we're gonna get a new car. We're gonna get a new house. Nice house, yeah. We're gonna go on better holidays.

And rightfully so, you're obviously being rewarded for working hard and you should treat yourself, reward yourself, but not without having financial foundations because like Laura said, the rug gets pulled, mortgage rates go up, car finance needs to be paid, school fees might need to be paid, like people then go, I'm going to send my kids to private education because

we've been awarded with this amazing lifestyle. All those kind of tax implications that have been associated with the private school fees, like you just don't know what's going to happen. It's constantly changing landscape. One thing you can be sure of is you don't know what's going to happen. Yeah. So like prepare for that. And that's where like emergency funds come in. And arguably sometimes I feel like in the community, it's like the biggest pain point for people and they don't wanna do it.

They're like, I just don't wanna, I wanna move on to paying off my debt or I wanna move on to the next stage. Sometimes people see it as like a wasted thing, but the people- Yeah, they wanna jump into investing before the big emergency fund. And I get it.

It's not sexy, is it? Yeah, it's boring. It's not sexy. You don't get a big trophy at the end, but let me tell you, the people who have had to dip or rely on the emergency fund are the biggest advocates for it. And they're like, you better do this. Like Tolu, you'll see in the community,

really vocal financial member, Money Diary Queen, she's been on an unlock with Laura and she used to be like, she just didn't like doing the emergency fund bit. She wanted to pay off, she wanted didn't like doing the emergency fund bit. Which I get. I absolutely get an empathize, but like Laura said,

some of the people that get paid the most in our community don't manage their money as well as others because they've got the cushion of the big paycheck, but actually not realizing that they spend the majority of that paycheck and not much of it's going to protect in the future self? I think that the emergency fund is underrated. It is, especially the larger one,

until you've got one and then you go, oh, I feel amazing. You would never have it. It is like a well, it's a wellness thing. But it's also one of the newer features this year anyway is the asset doughnut that we've got. And I must admit, it's like a bit of a curse really, having done it.

And I really like seeing the asset doughnut. It breaks down whether your assets are divided up by cash, property, market investments, and then other. And mine stresses me out because my cash property, market investments, and then other. And mine stresses me out because my cash is such a small percentage. Now it's actually a good number. It's a number that makes us feel comfortable.

But a lot, the vast majority of our net worth and our wealth is tied up in two properties. I can't get at that. If I needed money in an emergency, I can't get at that. Yeah. If I needed money in an emergency, I can't get at it. I have a tiny amount of expensive things. I've got a nice engagement ring and I've got a watch and I've got one handbag. So there are three designer things.

I literally sold everything else and don't really find value in them. So I don't have them, but they're not really worth anything. They're not part of my net worth. I'm not gonna be able to sell them for full value. so I don't have them. But they're not really worth anything, they're not part of my net worth, I'm not gonna be able to sell them for full value, I just don't count them, so I can't really get cash by that way. And then the majority of my market investments

are in a pension, again, not accessible. I have so many stocks and shares, I so obviously have that wealth, but the majority of it is locked away. So when, as a high earner, and this is coming back to what you said, as a high earner, and this is coming back to what you said, as a high earner, there's one thing kind of being able to buy a big house with that high income,

and there's another being able to put money into a pension because it's going as a percentage. But if you're not building up that emergency fund, those two things are out of reach. Yeah, or you've got a finance car. Yeah, exactly. You can't sell the car. It's not, and we can't, no, you're right, exactly.

And so, one, it can be pulled at any point, but two, if you spend it all, because you're not saving it, even if it's being diverted into these sensible places as well. It's all liquidity anyway. You don't have liquidity, you can't get access to it. And so it's like tied up in things that you can't sell.

Form of an emergency. So it's like tied up in things that you can't access. So for an emergency, I was being story coming to head and I'm like, can't tell that story. But I was like, could tell it if I don't tell who it's about. I was told yesterday about some couple separating and we were talking about assets and we were talking about how the particular woman had probably about 200 grand's worth of clothes and handbags and shoes. And this was, we knew this because of the amount that it was being insured for. But she had no cash. And it was

this, it was a friend of a friend. So it was just this chat we were having about, if you buy loads of stuff, because you've been used to high income, used to high this and high spending, and you've got a house full of stuff, what you can liquidate some of that. We know what you've been through

trying to sell your Chanel handbag. You're like, it's broken record. It's still sat in my wardrobe because the people that want to sell it want to take half. I'm like, so it's basically back to what I paid for it. I'm not making any money. It's not an investment. I don't care what anyone says.

It's not an investment. I saw a webinar for women about your handbag as an investment. Are you fucking kidding me? Like we've got a gender investment gap. We're trying to get people to invest in things like ETFs and basic funds and basic investing, but we're gonna have a webinar on handbags. But this was the same point where you have,

if there's no cash, then you don't have that back. You've just bought stuff. You have to go to the trouble of having to sell it at a loss. Go and look at, we always do this, go and look at what it's selling for in vintage and then decide whether you're gonna buy it in the first place.

Yeah, and from the whole its value, my whole its value, go and look at what it's selling for in vintage and then decide whether you're gonna buy it in the first place. Like when you fed up with it. Hold its value, why not hold its value? I danced around it on the floor. When it was on the floor, it was like, it's had beer thrown all over it. I haven't got the dust bag, I haven't got this, I'm gonna like, just don't even go there. Unless you're gonna like literally not use it

and then you still don't get the resale the most of the time. And again, I just think it's linked to that high of anything, so yeah. An emergency fund, I think people that don't have one are the ones that would say that. And the ones that have one go, oh my God. Please. I love it. Please.

Yeah. It's my best friend. It's a family member. It's not going anywhere. Personally, it helps me sleep at night for sure. Yeah. It's just really like. Magnesium and you. Magnesium and a magnesium. I prescribe you. I prescribe you.

I prescribe you. This is advice. Magnesium and you. Magnesium and emergency fund. I prescribe match made in heaven. I prescribe you. This is advice. Magnesium. This is health advice. Emergency fund. Even a mini one for people, you know, even someone on a high income that doesn't have a mini one,

because when something goes wrong, like you said, they've spent all the wage, they're going to lean on credit, whether you're higher or lower. And the emergency fund is so underrated, but highly coveted in the community. I think we should start a thing where we name our emergency funds.

Do you know how people name their sourdough starters? Oh God. That's good. Yeah. What's your emergency fund called? It needs to be something that you love and you don't want to leave. Need to get some money off Steve.

Love Steve, Steve's not going anywhere. It can't be a man. Oh gosh. No. Mine is Gemma. Gemma. Gemma Collins. She'd spend it. Dipping it into the GC.

No, badge of honor, we spend it. Dipping it into the GC. Yeah, she would. Dipping it into the GC. Dipping it. No, badge of honor, we love it. Yeah, well, we prescribe you an emergency fund. Okay, time for our first dilemma. I'm interrupting this fabulous podcast to share this week's controversial money opinion from Pension B. I don't need to worry about my pension, it will just sort itself out. Ladies, what are we thinking? Agree? Disagree?

Well, I wholeheartedly disagree. Although I'll be honest, I used to think that way before I realised how preparing for retirement would benefit my financial wellness today. I genuinely sleep much better at night knowing the work I put in now will ensure I have a healthy retirement when the time comes. That's so true. Life is so unpredictable and it's important to plan for the future. But I know a question we get asked a lot is how much should I save for retirement? Thankfully, our friends at Pension B created a pension calculator that helps to work out how much you should put away annually to create the retirement you deserve or expect.

Just move the sliders up and down to find your sweet spot. Although remember, this is just an indication of what you could receive and it isn't a guarantee. Okay ladies, FinanJel has spoken. Nobody has a crystal ball so it's time to take control of your future with the help of PensionBee. Download the app today to get started or head to pensionbee.com forward slash uk for more information. And remember when investing your capital is at risk. Should we quietly get married before the baby comes? Me and my partner got engaged in September 2024. We then fell pregnant in October and I'm due at the end of June. I really wanted

to be married before the baby comes. Is it worth just quietly doing the legal bit to keep us protected if anything happens to one another? We've agreed to get a prenup as I have two rental properties but he's purchasing our family home in his sole name due to stamp duty and taking advantage of first time by incentives. What are your thoughts? I didn't really want to get married whilst pregnant

but it would give us more rights and protection. Should we just go and get married? Help. Congratulations. Yeah, it was a fun year. Yeah, yeah, wow. 2024, 25 was your year. I don't think we've ever been asked, should we get married?

Do you know, like, because it's not strictly a financial question. That, is it? Well, no. Should we get married? I mean, that's like, should we get married ever? They're saying should we get married before the baby's born? I quite like the idea. I think it's so chic.

Like, we've talked about it before, the town hall wedding. Yeah, I love that. I am here for it. I am, sorry. What I would say is, you're here for it, but she does want to get married pregnant. And so is there an aesthetic side of this where we've talked about the small courthouse wedding

where it looks neat, but look, I wouldn't have wanted to get married pregnant. I would want, I don't have to be tiny, but I might not have wanted to get married pregnant physically, and she does, because she's due in June. This is like any day. The problem is, sometimes people do this, and then they go, and then I'm gonna have a big wedding,

so they're doubling up anyway. But I think it's more the legalities, so. I know, so what is your answer? Yes. What was your answer? Well, both. Yeah. Cause I think we do like this. I love a good wedding.

But I appreciate how you may not want to be a visibly pregnant bride, not because it's inappropriate. No, no. And just cause you, just because you wanna wear the dress that you wanna wear, you wanna wear heels, you wanna whatever. You might wanna drink it, you add in all these different things. Yeah. So what I, we definitely will not tell you

whether you should or shouldn't get married because you said you want to anyway, you're engaged, but it's definitely for you. But it's a good exercise to do to look at the benefits of getting married and then seeing if you now will be looking to do it after the baby, how you plug the gaps. So I think it's, you know,

I'm not gonna remember them all off the top of my head, I'm sorry, but there'll be some things, for example, like next of kin, you know, the next of kin thing. So at the moment, if anything happens to either one of you, you know, have you closed that loop because you're not, you know, civil partners and you're not legally married. And so you're not each other's next of kin

unless you have proactively done something about that. When it comes to things like, once you have the baby, if you're not married, then if one thing were to happen to each of you, usually it's connected to death, so we're gonna go uber serious, but legacy week, remember, we're here for this,

this stuff does happen, is what would happen if you weren't married. And so you can close those loops, which is like taking out specific life insurance policies and pensions, going to the pension provider and noting down who it's for. Because at the moment, I can't remember what would happen, but it could go to the baby. Well, before the baby, it wouldn't go to you. So if you have a pension, you can nominate who you want it to go to and you don't have to be married to do that.

You can literally go write that down. But marriage may or may not have helped with that. It just depends. It's all about looking what would marriage have done legally when a child comes in, how does that change? Because it does change the rules of interstice in terms of who gets stuff if there's no will. And can you close these loops for like a period of time?

So let's say you might get married instead in September or in, or next June. Let's say you wanna get married in a year. For a year, do you need to make sure there's a will? Can you put some things in place that cover those gaps? But it might be like, we want the same name when the baby's born, like, cause people forget if they don't get, if they want the family name.

Like you want the same, like a lot of mums don't have the same name as the kids. And it might be really important for her to do that. Like just cause she wants it. So yeah, there's a lot. So it's the getting married anyway. Yeah. Those Holly's Apple what?

Just reminding me of. Siri giving us his point of view. So everyone, it's currently X amount on a first day. Yeah, no, I think it is that. I think that, I think you'll know when you got what you wanna do. Yeah. And if it's not getting married, pregnant,

or getting married before the baby comes, I think make that decision. You can, with insurance policies, wills, a little bit of legal advice before, I'd sooner pay a grand for some one-on-one, one-off legal advice and close all these loops. Yeah, got the eyes crossed to see you. Say this is for a year, if you either really don't want to get married now or really do and just do what you do, what you want to do.

Yeah. But you're thinking of the right things. So many people don't think this through and like I said, you just don't know what can happen. We have had all the unexpected happen in this community. So, you know, whether it be a separation, God forbid we're just talking about this and you just get him married. But or whether it be an illness or a death

or whether it be something different, difficult about being off work. There's so many different things. Tick off all the stuff. Loads of people when they get married as well, sorry, loads of people when they have a baby, kick marriage down the line, because they go, oh, we can't afford it,

oh, no, nursery fees have started, we can't afford it. It does get you back. And it can be like 10 year, 20 year, 30 year, never get married kind of journey. We've got friends that have kind of done that where they've just gone, it's just not the right time, not the right time, not the right time.

And if marriage and what comes with it in terms of like protection is really important too, you have to, like Laura said, decide, is it the legality thing that's really important? Like having the same home as the baby and making sure that if anything happens, we're all protected. Or is it that you actually do wanna get married?

They're two different things, aren't they? Yeah. Yeah, sorry I can't tell you. I mean, I would like to tell you. I get married, but that's just because I like a good wedding. Well, yeah. She doesn't reveal her hand. So I can't tell.

No, no. there's no judgment. Like, I just think you're thinking about the right things and, you know, going back to legacy week, so many people don't, or they think we'll get round to it and you don't. And especially when you've got a baby, you won't. So you have not a long time, sorry, got a couple of weeks to navigate what is missing,

get the right advice and just pay for it or assess the situation and go get married and just take that box because once you've done it, life's gonna take you away. It really will, you're gonna have so much excitement but so much going on with this new baby that, yeah, this will go up to the bottom of the pile. One thing I would say is getting married on your own quietly like no one can give an opinion on anything.

Yeah. Like I think we talked about my friends at a loach before. Like no one gave an opinion on what the dress should look like or whether they should serve canapes or what. Or whether they like beef or chicken. Chicken, like nothing. It was all up to them. So if you've got that vibe about you

and you just want to like crack on and do it, it could be quite a nice little surprise. Yeah, I like that idea. Okay, community win. I've been on a huge money journey the past couple of years. And when I started using this app, I wasn't sure how to follow it. Then when I finally learned,

I felt overwhelmed by filling out every transaction daily. There were months where I stuck to it and others where I didn't. However, since I started tracking my net worth, it's been such a game changer to think of the bigger picture. In a year and a half, I've been able to almost double my net worth by trying to be more mindful of my spending

and saving every little bit I can. I can't believe I've been able to do this, especially considering I had a lot of emergency outgoings this last year and practically depleted my emergency fund. I'm very happy and thank you to the community. Woo hoo! This is like a lesson for everyone. Not everyone learns the same or behaves the same

and you can still get results. So some people are like Uber trackers and they'll tell you in the community, like someone's got a question, they'll be in there before us. I'm like, I know I spent three days ago in the spa, I spent two pound 10 or whatever. Some people wouldn't have a clue,

but track things like the network, so like long-term progress, like everyone's different and no way is the right way. We gave, the good thing about our app is we give people options. You don't have to track absolutely everything because we know that a lot of the time that might put people off, they've not got time to do it,

they don't wanna do it, where some people are like, I want in, I wanna touch every single number, I wanna know what every single penny's doing, and it just shows you everybody's completely different. But, they're- Something for everyone. There's a famous quote, can't remember who it was by, I'm gonna say it wrong anyway, but the vibe is,

like, don't be making $20 decisions, make $20,000 decisions. And like doing actuals and tracking specifics is fab. It really is. It's great to do if you're not good at them for a period of time, it really can show where you're spending money. It can keep you accountable.

And I also think that if you're also doing your net worth, it can help to link the two, which is these small decisions here really can have an impact. But so many people make the budget about these small spending decisions. They don't focus on the excess. And the excess is the bit at the bottom of the budget,

your personal profit, and you put that towards things that grow your net worth. So the budget is the month on month thing, and the tracking might be a daily thing, but the net worth thing is this, she's had an 18 month journey where she's looked at that she's doubled her net worth. And it can help you focus on the right things.

Cause if you're focusing on, oh, I'm spending a bit much on groceries, spend a hundred quid more on groceries, don't, it's the hundred grand over here that we wanna focus on. And I really think that's important. And I think when someone does the net worth, we've talked about financial poor,

when you could have had to use your emergency fund four times and use it and you build it back up again, and then you use it again, and then the car needs stuff. And then you need to pay it for insurance. And it feels like a slog. And you look in your bank account because everything's in all the sinking funds. You just feel like you're worse off.

Why the hell am I doing financial? I've got no money. And then you do your net worth. And in a month that can feel particularly difficult, you've added money to your pension, you've paid the money off your mortgage, you've added money to your emergency fund and you've paid down some debt,

your net worth's gone up. So you can feel stressed and restrictive, but you're growing your net worth over here. And it's then full circle because it can reinforce, okay, this stress about being a bit tighter with money and feeling like I've not got a lot in my bank account is leading to something. I'm going to do more of it. It's like positive reinforcement. It's like it made a difference over here. So I'm so glad that she's had that stand back moment. Yeah, look at the bit, the net worth is about tracking

the bigger picture, we call it like the bigger picture when it comes to your money. It's like really big view rather than that daily, small incremental, I'm down, I'm up, I'm down, I'm up. It's like taking a step back and looking at the progress over time. To double your net worth in 18 months is just massive. And it's a reflection of your financial wellbeing.

Like numbers are all different. Someone's net worth could be different to someone else's. But if that's going up, it means you're paying down consumer debt and or you're growing your money, you're investing. You're doing the right things. It's the right behaviors. And by the way, that compounds.

The more that you do both of those things, the more your net worth will grow. And that's like, it's such a reflection of a lot of the grind. It manifests itself in a positive net worth situation. Some of the thank, what you feel like a thankless task. So you're like, going for not unpolished spending and not over egging it and not doing it.

And going without for certain things that don't really bring you joy. You must question sometimes when people do like, what am I doing this for? And then you're like, that's what I'm doing it for. Like this long-term financial wellness goal. Yeah, it's cool. Good feature, people should do it.

Make sure you do it. Once a month. If you'd like to tell us your win, head to the community in the app or email it to the vault at financial.com. Okay, final dilemma of the day. Just a quick one, Laura here. If you're wanting to take back control of your money,

ditch debt, make better decisions and build wealth for the future, the Financial app is for you. With Financial, you can track your spending on the go, hit your money goals faster and create a realistic budget that you can actually stick to. Not to mention you'll be part of an exclusive money community who share tips, offer support and celebrate your successes along the way. Click the link in the description to download Financial and start your free trial now. This is your sign to take control of your money today.

OK, I'm done. Let's go back to the vault. Should I reduce my pension contributions? Oh, controversial. Hi, I'm fairly new to financial. You don't say you would know the answer. I'm fairly new to financial, but I've been trying to get my finances in order for two years now. My husband and I are both high earning software engineers, around 200k a

year combined. But we live in an expensive area of London, so expenses and rent are high. We moved to the UK four years ago, and up until that point, we didn't really care about saving money. We basically spent everything without thinking. Two years ago, I looked at my bank app and saw that I spent 10K on Deliveroo in four months. So I knew we needed to change something. Sorry. Oh, he's got so many questions.

I wanna know what you had, like I'm here for it. Well, the first part of it wants you to go through and we can rank what you had. You're like, was it worth it? Was the repeat offender like, this is really good. Yeah. That is not unheard of.

No, and the second part wants you to delete that right now. But anyway, carry on. A year ago, we had pension advisors come into my work and I realized I'm way behind on my pension pot. I increased my contribution to 10% through salary sacrifice, trying to catch up for the years I lost because I'm not from the UK. I don't expect to 10% through salary sacrifice, trying to catch up for the years I lost because I'm not from the UK. I don't expect to get any pension money from my home country.

Luckily, I don't have debt and I'm 60% done with my six month emergency fund. Recently I looked at my payslip and realized that if I reduced my pension contributions, I could probably half the time I need to save for the emergency fund. But I'm scared that I'm really behind on the pension. Some people say I should have a year's salary saved by now, but I have less than half of it, and that I'm missing the time in the market. I'm in my early 30s, what should I do?

Oh, I've got a confession. Go on. I stopped my pension contributions as a lawyer at 22. I thought you meant like now. I was like, I don't know. I was like, sorry, I was like, sorry what? No, no. Can you write in?

I just want to like be on their side. She's not saying stop that. Empathize, yeah. I want to empathize and I didn't, I thought I needed the money now, but then it wasn't, it was pre-financial. It was obviously, it was, oh my God, how many years ago was that? I was about to say it was 10 years ago.

A long time ago. More than that, 15 years ago now. But no one was in my life guiding me and I did reduce them. So I just wanna, within a year, I went straight back, I went, F, that was a bad decision, but why the hell did no one tell me that at the time? And so, you know, lots of people have been there where they're kind of going, can I afford it?

You're actually not saying that, which is very healthy. It's more that we've talked about this, she's trying to do multiple goals. So actually, what we tend to say is have a look at the auto-enrollment percentages and try to get to a point where you're at least doing the defaults and then focus on the goal that you're up to. That is impacted by your age

and how far behind you are with pension. Cause it sounds like they've got this high salary, they've got to work to make up the difference. She doesn't say how old she is. And so the younger she is, it's easier to slow down contributions because you've got time. Whereas if you're older and you're close to retirement,

you've got a job to do. The other thing to consider here is her salary. So it's 100K. So she's at these really critical levels for personal tax. It's obviously always changing. It changes year on year, but your personal allowance is impacted by different earning levels and pension contributions can help, obviously,

say dip you under that and save on tax. She has a salary sacrifice one. So there's a bit of a nuance to that. So there's a few things to consider when you're looking at it. I think the thing here is she's possibly trying to build too high an emergency fund. What do you think?

Yeah, she kind of gave away that she's got, I know you should get a year's emergency. She's surrounded by high earners. Yeah. And if you're savvy with money, and you're a software engineer, and you don't really have a life. That job is in high, look at your job,

like, arguably in high demand. I know that tech has had a really difficult, like, 12 to 18 months, and that could go on, so I'm not saying be radical and have a three month one. You're in London, you've got high expenses, you've got high salary, six months should be fine. Six months expenses for you and your partner, that's a year.

If one of you's out of the job, you've effectively got a year, so park that and hope that your partner is going in together on that. You've got six months expenses for you and your partner. That's a year. If one of you is out of the job, you've effectively got a year. So park that and hope that your partner is going in together on that. You've got six months each. That's a year. Should something happen to either of you, you're both in really high, highly sought after jobs

and you can go into different industries so you can move around. So you've effectively done that. I really would not reduce my pension contributions because you're gonna lose out on so much. You can- Well, the tax alone, like, cause she's a higher earner. That's what the, you know, and the national insurance

cause she's a salary sacrifice pension. And so if she'd said to us, she doesn't have an emergency fund, the answer would change. Wouldn't it? We'd be saying, no, no, you like, you need to be learned to save because you are on a really good salary with a really good skill set.

And you should be able to. You should be putting it on your side. But I think she needs to recalculate what her emergency fund should be. And set that and go, right, I'm happy with that. And I bet she's not far off. So then on that basis, I wouldn't mess around with the pension contributions. I love the idea that she'd be doing 10%. Because if she's doing 10%,

she will be getting a contribution from the company. And she obviously saving on tax at the same time. When you're earning at those levels, you want to mitigate tax. Again, if there's any issue with job losses, we've talked about this on previous pods, but you can close the gaps with, there's each other's emergency funds.

There's taking lower salary jobs. So if they're on a hundred grand, 60 would help a lot, I know, in a high expense area. We've talked about insurances, so there are peace of mind insurances that you can bring, whether it's critical illness, whether it's income protection for a period of time that can help reduce that need to build 12 months,

because it's an ideal, and if she wants to carry on those percentages and still save up emergency fund money, like I'm comfortable there, but I think this is nice to have emergency fund money now. Interesting though, she, it was the pension man, could have been a pension woman, but it's always a man, isn't it?

But that's what made her think. You listened, you took it in, you realized you were behind. Is your partner talking about reducing his pension contributions to mitigate the emergency fund? I'd like to know, was that a consideration of his as well, or is it just you that you're panicking going, I need more of a buffer, I need more of an emergency blanket.

But if you can go in together and get an emergency fund together, obviously keep them in separate places because it just keeps, it protects you. But if worse comes to worse, you've got an agreement that like we've built this together, should something happen because you'll be joint tenants on them.

I don't know if they've got a mortgage or they're paying rent. Rent, rent. So you're both liable for paying that rent. Interestingly, that'll be their next challenge. Like do we buy somewhere in London? Do we move somewhere cheaper and work remote or commute? Because they'll take those salaries. Yeah, because in tech,

you can still kind of command the same salaries and work remote. Interestingly, I think the same question would come up on saving for a house deposit as well. And it'll be the same concept. So what we would typically say is just invest your defaults, make sure you get in that, you know, 5% employee contribution. You're getting some from the government, you're getting some from, well, you're getting the tax benefit

from the government and you're getting some from your employer. It all depends on her age because if she wants to build a house deposit, we don't want you over-investing because you're going to take too long doing that. She doesn't talk about house deposit, but it's the same thing because they spent too long messing around and now they're trying to get the right together. Yeah. There's gotta be a financial goal in there somewhere.

Like what's the next thing? They need something next after the, I think they're done on emergency fund. I think they need the next thing. But it may be that they decide they're not gonna buy in London and so then pick the next total and it's your choice to prioritize which one.

I mean, I love the idea of 10% in pens. It's like gorgeous, isn't it? We've talked in previous podcasts about going and doing those calculators as well. Like what is the final, yes, you've got the percentage. So you're not constantly worrying about every single month. What's the goal and then working backwards. Well worrying about it every single month. What's the goal? And then working backwards. Well, and actually she could go back to her employer

because the pensions man, the financial, he will be, I think she says he, which is why I'm saying this, by the way, I'm not leaning into it. But the financial advisor, he or she, will be there to look after her because that is part of the, they don't need to send investments to this person. The workplace pensioner usually pays

for access to this advice. So do some different planning scenarios with the pension advisor, but the financial advisor, because they could look at this holistically and go, okay, this is your age, this is the kind of lifestyle that you want, this is how much you need in your pot.

You don't want a house or you do. They will help you with this. And so once you want, this is how much you need in your pot. You don't want a house or you do. They will help you with this. And so once you've, I think you're not far off that emergency fund. So once you've got their scenario plan with this person, because you are of a good enough salary, that it does merit financial advice, I think. And this extra financial planning,

you're in London for different price issues and help build a couple of options. And you get options because there's not one way to skin a cat, so they won't say, oh, you can only do it this way. Say, okay, if I'm doing this, what could it be? If I could do this, what could it be? And once you've set them going, leave them.

Like just chill and crack on and enjoy that. But track your net worth, like we've talked about the net worth on the app today, in different, the other dilemmas and stuff. That is the thing where you can see progress. And she obviously feels down about the pensions thing. You've got to start somewhere, but you're lucky you've got a big income.

You'll see it going up, and it'll just make you feel like you're doing something about it. The worst thing is like feeling out of control or not taking action. Whereas to be fair to you, you've gone, I'm behind, I need to come up with a plan. But I just think you're overreaching

that emergency fund a little bit, possibly. You need to do the math yourself. What are you comfortable with? What will help you sleep at night? We've all got different versions of what that looks like, depending on where we are and what our circumstances are, but we might be able to give you a little bit of a reward today and that might be, you're done.

Move on to your next thing. Again, let's have a think about, are you doing house or are you gonna jump straight into just pension, pension, pension? And I think a little bit of homework for everyone at home is, do you know how much you're contributing to your pension? Have you paid attention to that?

If you're self-employed, are you doing it? Are you picking a percentage of your income no matter what the month and putting it in? Because this is real and serious and our, you know, dial-in writer-winner has been very conscious of that. And it may be a bit too keen and jumped to a really high percentage if her budget can take it, great.

But too few of us don't know what's going in and if that keeps us on track. So- And what it's gonna look like. You might be like, oh yeah, I'm cruising. Oh yeah, I'm putting into a pension. And you get to retirement age and you're like, shit! But what are you putting into the pension?

Sometimes employers have better schemes, they have management schemes, they'll contribute more. Are you getting the most out of that relationship and getting it put in there? And like I said, the self-employed thing massively worries me. And also, even if you are not right for a financial advisor, if you're of more modest means, you're a more modest salary,

there are ways that you can go online, Money Helper and other pension sites, and you can calculate what do I need and what's the gap. And don't be overwhelmed by that gap, but don't ignore it either, because time helps investments. And there's no point coming up for air in a year and going, oh, so behind.

Just missed a year of contributions. Even if you start small, it's something that we're really happy to help on. I don't know if we need to look at whether we've got like bugs and stuff that can help with working out and pointing people to government stuff. Being aware of it, because a few episodes ago there was a dilemma,

like I've got a bonus, what should I do with it? You'll know exactly if a bonus comes into her lap, she'll know what she needs to do with it. Because she's conscious of the gap. What's your plan? Like we've got people in their mid-50s that whenever they get a bonus now because pensions, they're like gold, because everything's sorted,

but it's got a job and it's going straight to the pension. Immediately. Yeah, yeah, no. Don't hesitate. It's so good when I see people do that. Shall I say 10% and like, I'm gonna go on splurge 10%. Not a question.

No, no, it's going. Because the budget is so good that they've got a sinking fund for stuff that brings them joy and entertainment and holidays. That bonus is purely a bonus. It's never guaranteed. It's gonna go and fill that good that they've got a sinking fund for stuff that brings them joy and entertainment and holidays. That bonus is purely a bonus. It's never guaranteed. It's going to go and fill that gap that I've created. And then therefore it comes down again,

the pressure relieves like. That's so true actually. I love it. And also I feel like she's had a transformation from spending 10K on delivery in four months. Oh God, to now putting 10% in her pension. Oh, I mean, yeah. Well, that can change in a year with financial,

is what I would say. I still wanna know what she ate. I'm desperate to know. And like, are you a meal prep queen now? Laura and I live in the sticks, you can't even get delivery room. You can't get the local Chinese to do it. There isn't a local Chinese.

I know, that's why. You have to like go out into the wilderness. Wilderness and go find something, catch it, kill it, bring it. I want to live my character through people that live in cities. I've seen people get vapes delivered. You can go to a pub. But I think how a local pub that is not like an aesthetic pub, it's just like a chain pub, does just eat.

And we're like, why would you get that? No offense to that pub or anything in particular, but he's just like a chain pub does just eat. And we're like, why would you get that? Like, no offense to that pub or anything in particular, but like, it's just not, I'm thinking like, you know, Japanese or sushi or- Peruvian. Yeah, it's like something bougie. Get me my money's worth at this take away, not just like co-op. You did the co-op, didn't you?

You not do the co-op. Yeah, I did a Waitress one and it was half price everything. It was so cool. That's why you did it, yeah, yeah. That was why, that was why. That is an event in itself, I would say. It was so fun, I was waiting.

What did Isaac do to football? Did he get something to live with? He did like a coffee or something. He did like a coffee or something. Oh, for God's sake. That's crazy. And some crisps. It was his tea and I thought, again,

our village is pretty tough. And you listen to his podcast and I'm watching you. I know everything that goes on in that village. Text Holly, she'll bring you something. Out of stance. Okay, that is all for this episode. The vault is now closed.

And just a quick disclaimer, the vault is just a chat. Our online family topics, we are not giving financial advice.