The Vault with Financielle - Is Valentine’s Day A Scam? + Getting Married For Practical Reasons | The Vault Episode 50

Episode Date: February 6, 2025

Send us a textIn Episode 50 of The Vault, we discuss this week’s controversial opinion, “Valentine’s Day is a scam” before diving into our listener dilemmas:💸 "Should we get married for practical reasons?”💸 "We’re mortgage-free! What should we do with our new excess?”We celebrate a listener who can’t wait to create their budget with a mortgage payment, after buying her first house as a solo buyer! What an amazing achievement! 😍🏠If 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 💌As a Vault listener, you can get a whopping 25% off our digital course, The Money Playbook. This is a step by step guide to being financially well. It has 101 lessons where you'll learn how to budget, ditch debt, build savings and grow wealth. Use this offer code at checkout: VAULTCheck out The Money Playbook course here  💸Chapters:00:00 Introduction00:44 Welcome to The Vault00:52 Birthday Shoutouts06:15 Valentine's Day: Love it or Hate it?16:19 Managing Money in Long-Term Relationships17:40 Marriage for Practical Reasons20:24 Financial Contributions and Asset Building30:28 Emergency Funds and Investment Strategies32:05 Retirement Planning and Diversification40:05 Modelling Financial Scenarios43:08 Final Thoughts and AdviceThe 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

Hey everyone, it's Holly here. Before we get into the episode, I want to share something exciting. That's right. If you're looking to take control of your money, the Financial app is your go-to tool. With the app, you can track your spending, create realistic budgets, and hit your money goals faster than ever. In fact, did you know our premium community members save three and a half times more than our free users? That's incredible. Plus, you'll be part of an amazing community where we all support each other on our money journeys. Whether you're starting to pay off debt or planning for your future, the app has everything that you need to make it happen.

So what are you waiting for? Download the Financial app today and start your free trial. Trust us, your future self will wish you did it sooner. 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. Happy Thursday. Happy Thursday and happy birthday to Lucy's mum. Happy birthday to you. And my grandad. Happy birthday Lydia's grandad. I literally shit myself on thinking, is there anyone in my family? No. We're good.

Do we have any Febs? My husband. Yeah. Oh, we'll fall out with you. I know, I know. I was about to say, I thought it was January. No. Well and truly into Feb.

Yes, and happy birthday, Jen. Happy birthday, mum. Yeah. How are we all doing today? Cold. Cold. What's new? We're always cold though. I know I'm double layered up. Until like August I'm cold. Yeah. Although. Heated blanket. Last year I went all year with it on. The heated blanket. It didn't get warm last year. No. Lucy, if you don't know, is very much into it being cold and miserable. She thrives in these conditions.

So don't let it be fooled that being cold is a bad thing. Lucy likes being cold, but getting cosy. You don't like being cold. You like it being cold outside and you particularly being cosy. Yeah, like my idea of hell would be like moving to a whole country where it's hot all the time. Australia. That's horrible.

And they think it's cold, like, in their winter. And you're like, please. You've never experienced a chest at winter. What I would say is, you are a bit like a newborn baby, though, with all the different contractions that you have to warm yourself up. Like, it is getting quite excessive. You're like, is it like, you have a hot lamp. That's the next thing they have. Oh, yeah. Like it is getting quite excessive. You're like, is it like, you have like a hot lamp. That'll be the next thing

that you have. Oh yeah, a lizard. A lizard. You like the cold, but you don't like the cold. Iguana vibes. The big thing about,

you know, but for lots of people, like heat these big old houses, but actually, if you are working from home or you're on the couch or you're, well,

Holly's like, I can't have a heated blanket on the couch because you just fall asleep immediately my family would think I've been knocked out yeah

I will I will I'm over in the day I'm warm at work I'm over my knees that's what you have yeah it's nice like a grandma

yeah literally a grandma everything's tucked in we have an oil heater is that the right phrase it's oil

inside you can hear it sloshing around and you plug it in like a little radio like a portable little heater yeah and we we just heat the studded west wing we've called it before don't get twisted it's not um but that's what we call it and we just plug that in but i think i need to heat myself I think I need to put myself first yeah it'd be cheaper though yeah yeah

well maybe not in the heater itself but I cannot after 8pm of an evening I could not straight asleep yeah that's what I do

I had a really bad spout of falling asleep I don't know why at quarter to nine on a Friday and a Saturday night for quite a few weekends we keep watching Suits and that's my sleeping time now because i'm a bit bored yeah you've done a couple of episodes a series and you're like i'm comfortable around harvey

to fall asleep now yeah yeah yeah i'll be got it for christ. So we're a few weeks in now and we keep stealing it and she keeps going, are you borrowing my? Yes. You started that. You started it.

No, I can't even have one. You can't. Well, I was asking you about it, wasn't I? Why? Because you don't have the wall for it. Have you done it on the ceiling yet? No, I don't think.

We've done it on the ceiling. So we can do it on one side of the bed. So you just kind of turn your pillows around a little bit because you don't want to look completely to the right. But we've done it as a family. I'll lie down because I've got a new Super King bed. It's literally the best thing of my entire life. And we put it on the ceiling, but not straight above our heads.

It's like at an angle. So it's the bottom of the room. And so it takes a little bit of getting used to. At first I was like, I feel like I'm on a roller coaster or something yeah but you can do ceiling because we do have like the it would be perfect where the windows are it's like big white shutters when we first moved down perfect projector but it's like these and they've got like lines oh yeah and everyone's faces are like distorted it's funny I'm terrible

pop up screen by the way I don't have a lot of money I'm a cheat the kids keep putting Mario on the TV and I swear to god we did a four player

family thing I was travel sick I had to stop on Rainbow Road Rainbow Road doesn't have sides though I don't like that one it's like when you go

bowling and you don't get the bumpers turn it off I can't look at it anymore I honestly then I was literally I can't look at it anymore I honestly then I was literally I had to put my head down I felt ill

so I'm now bumped out of the Mario Kart crew I like physically can't play games like that I'm just genuinely I can't do it

are you frozen I was like 12th 14th 10th yeah of the thing well the kids do this

I'm going to have to demonstrate if you're not watching on YouTube I'm sorry use your imagination but when you go up a hill you they go does it make a difference yeah you get extra things they say that no no well yeah so then i started doing it but i go like neil's like what are you doing then the kids are just very effortlessly

like flicking it and i'm like hey i think you're pretending you actually just want peace and quiet and you're like I feel really bad I'm gonna go to my room and read yeah in the quiet it was all planned pre-planned well we're definitely in hibernation mode yeah yes definitely okay controversial opinion valentine's day is a scam agreed oh yeah it's we'll. I didn't realise that we're coming up close to Valentine's Day, which tells you how we celebrate it. I am not. I never have been. I remember.

I really hope. It's not a high school thing. But yeah, in high school, one of my first boyfriends got me a necklace and that was at the end. You were 10. I think his mum might have even sorted it out. And I got a necklace and I was like,

thank you. And I was like, that was it. I was done. It gave me the ick. I think his mum might have even sorted it out. And I got a necklace and I was like, thank you. And I was like, that was it. I was done. It gave me the ick. I don't know why. Yeah, the biggest representation for me of Valentine's Day is like when you're watching American TV shows as a kid and there's just like, it's a thing there. You know, it's like a card.

Give a card to Valentine. A red chocolate box. Do you know what I mean? It's that. That's where, that's my memories of Valentine's Day. It's more like fake. It's, yeah. Movies. Do you do memories of Valentine's Day It's more like fake Movies Do you do anything on Valentine's Day?

I feel like we go out for dinner On Valentine's? No Friday the 14th you are going out I didn't know it was on a Friday We go out for dinner yeah On Valentine's Day Do you wear a red dress

last year no I actually did I remember that was on you are on Sweet Valley High you're on the walk in it

me and does Alex have like a rose in his mouth it was a suit that's too big for him yeah with a with a silver chain

which ones I mean high school no literally when me and Alex first started going out it was like the start of the year and we literally

went to Manchester and we went to San Carlo I literally wore a red dress it was Valentine's Day but it was also like kind of one of our first dates

oh my the pressure yeah I love Valentine's Day but it was also like kind of one of our first dates oh my the pressure yeah I love Valentine's Day I'm not even going to pretend I bet all the girls I bet all the waitresses

and waiters were like walking around yeah I've never missed Valentine's can you get the photo can you get the photo

on my Instagram the only thing that I've ever done on Valentine's Day that's meaningful is an M&S meal deal. That is good. Best day of the year to get a meal deal. Is there a more expensive menu on Valentine's?

Well, that's what... Probably. But you go out... Lucy, you go out New Year's as well. You did that last year. Yeah, we went for dinner. We just always go for dinner at any opportunity. On the day that they hike the price but Lucy's like

can't be in I'm trying to work out if this is just Friday night dinner and it happens to be on Valentine's Day or whether it's no no

it's Valentine's where are we going because it's Valentine's yeah it's like where are we going because what do we want to do we'll just go to

like a little like a little local worse like tapas restaurant or something the violinist in the corner intimate one time we did actually go out for dinner on Valentine's Day worse like tapas restaurants intimate the violinist in the corner intimate

one time we did actually go out for dinner on Valentine's Day and the table next to us he proposed and I took their first photos of the major couple for them what this shows by the way

is this is divisive I already know what you all think you're getting this a few days before Valentine's Day tell us email in

DM us let's do some polls on Lydia Valentine's Day. Tell us. Email in. DM us. Let's do some polls on. Lydia, Valentine's Day. What's your take? Not for me. No. Look, here we go.

Good, I would never post on Instagram like this anymore. Oh, you're beautiful. I thought you were showing me the picture of the person getting proposed. No. It's just laid across the bed. With a glass of champagne. With a satin, I think, red dress. Who are you? Was this the dinner

or was this coming home from the dinner? Yeah, literally. I'm really shocked at that. I want a little present. Oh my. Right, what we expected. No, maybe just something like a little jelly cat. Just a little diamond.

Just a small one I'm really sure honestly we don't do cards very anti-valentine's day cards actually growing up like my mum and dad literally like got us valentine's cards and like oh they always made a big deal of it so I don't know it's just like I've got a friend I've got a friend that does like she'll get the Our Kids stuff and like sweets and love hearts and stuff

I think it's so lovely and it's like a little nice little cute thing but as a couple it just gives me the ick a little bit yeah I'll send you a picture

do you know what I'm gonna wear a red dress now I feel like having a friend that does it I'm like what's that like yeah let us live vicariously through you

and your American film oh my god I think you should go out for Valentine's Day and wear a red dress it's a nice nice atmosphere

I can't think of a more icky atmosphere I can't I can't think of anything I'd rather go out on New Year's and not say anything people do

Galentine's Day yeah that's nice I'm all for that yeah I'm all for that she's a girl's girl yeah I am I think I would love people watching so I would love to be deciding Wednesday. Yeah, that's nice. I'll have all for that. Yeah, you'll have all for that. She's a girl's girl. Yeah, I am.

I think I would love people watching. So I would love to be deciding about everyone's relationships. So I'd sit and we'd be like, right, they never come out. This is the only time out of year she's made him come. He doesn't look like he has to be here.

Look at the girl in the red dress. Like Becky with the big hair. She's an American of you, by the way, isn't she? I think like, we're all like romantic the big hair I think like my Elle Woods we're all like romanticising

but I think like Derek and Janet are going to be sat there and they don't like each other they sit in separate rooms every night and it's just that it's just a formality

mum and dad dad's watching the sport she's watching fake names but do you know what I mean like they hate each other and the kids have flown the nest

and they don't actually want to spend time with each other they've done it for the last 40 years so they're out I'm desperate for Holly I want Holly to go out on Valentine's now I just couldn't wait to go

I don't even do films can I come along and film yeah I'd do a Galentine's just to be like obnoxious and loud and like ruin everyone's

romantic evening but no people do Galentine's in alright well do it out I don't think you do be loud and proud it's romantic evening we know people do galentine's in all right you do i don't think you do be loud and proud oh lydia come on now right up your street well no judgment it's uh well she's judging but um it just shows you how divisive it is yeah and the pressure of like presence on alex to get a little jelly cat? Probably, yeah. Probably as in, you know, are you putting him under pressure? She's got the red nails, right?

Do you get... I mean... She's got a red top on! I'm sorry, this is... Does he buy you flowers? No, I'm not a really big flower person. Oh, okay. There are two

really good like movie Valentine's moments one of them is he's just not that into you I love that that rom-com

it's so it was one of the first ones of its kind in the US where there was loads of different celebrities in it and you're like

oh my god all these people are in it and they're all connected it was very very clever do you remember because Jennifer Garner

plays the one that's having an affair and she turns up as the waitress on the Valentine's night and she's serving them so i recommend that one and then there's the other one on sex and sissy the movie yeah where she goes out with miranda and there's all the balloons and streams and she says lesbian couple as well in the lesbian couple and she's got i think cupid wings on in her yeah and then they say she miranda confesses that she told said

something to be crazy to get buried we know it word for word like of course you two are crazy to get buried that'd be fun a restaurant with all those heart balloons

everywhere and you can't walk through over the top you'd love it well whatever you do tell us what your plans are I think no more than

like you can't spend more than 20 pounds on a gift okay for Valentine's Day I remember in high school there were people going crazy and spending like getting in high school people going crazy

and spending like 100 like getting perfume and crazy i remember my sister in year six she had like two boys in love with her and she was getting like multiple gifts her arms full of but i think that's driven by us tv no us tv parents facilitate but as in like the idea that you need it because in your teens or from your tweens even you're watching well when we were our age you did

sitcoms that would have a Valentine's theme to them so it's just you would expect where does my card come from yeah and then 13 year old you is expecting

someone to confess their secret love with a heart shaped chocolate box which I don't know would be really expensive I know and also they'd all be rubbish yeah

you just want a dairy milk bar I hate Which at the moment would be really expensive. I know. And also they'd all be rubbish. Yeah. You just want a dairy milk bar. I hate, not going to have to hand you them a little bit, like when you put boozy chocolates. Yeah, I hate that. It's like if you buy me a box of chocolates and there's like a champagne truffle in there and a gin or something,

I'm like, whoop. I love champagne truffles. Really? Just keep it simple. Absolutely love them. Yeah, I just want a dairy milk. Yeah. You'd prefer that to be there

no oh really what they've even forgot that what they call it charbon and walk what they're called i've forgotten what they're called the pink pretty box yeah my friend jemma's always had them and um i've always liked them i think i excitedly was like a chocolate that is so grown-up palette of you yeah it is i was excited at your house once and thought it was a chocolate and bit into it i was like oh the devil i just want it was a chocolate and bit into it, I was like, the devil it's a strategy to keep more for yourself if you get the chocolates that no one else likes

if you get dairy milk, no one's taking them I trained myself to like the orange and the strawberry from roses because no one else would eat them and they'd be logically what's left so I trained my palate to like them because there'd be like 20 left I'd be like, oh well i guess i'll just eat them then no one else likes them like that the first few times and i was like i can do this and i'm kind

of sad i definitely don't hear of many people having a valentine's thinking fund so would it come split from gifts and meal out yeah yeah i think so but you don't know because you're not paying for it i'm not buying a gift oh Oh my God. Google says that UK consumers are expected to spend upwards of 2.2 billion for Valentine's Day. No. Average of £50 per person. Well, yeah, going out for dinner. That's probably right. Well, how many people don't go out for dinner?

True. Oh, well, M&S. M&S. Yeah. I'm telling you now. M&S, Morrison's, Asda, they all do the meal deals. And I do approve of those. And the six foot teddies.

Is what I would say. Oh yeah. Oh God. When you see them the day after Valentine's Day, they're all the teddy bears just sat there, sad. Oh, that was divisive. Who knew? We're also friends.

Yep. Oh, cool. Cool. Cool. Okay. Dilemma number one. Should we get married for practical reasons? I have a question about managing money as someone in a long-term relationship with no plans to marry or have children. As an overview, my boyfriend and I live in a lovely house that he owns. When we got serious,

he was ready to buy his first property, but I wasn't in the position to do the same. I had just come out of a joint mortgage that left me chasing my tail financially for years. The way we work it is that I cover most of the bills, which costs me much less than I'd pay renting a loan. Holly loves it when women pay the bills. I'm literally just looked at Laura. If you watch her on YouTube,

I just literally looked at Laura as if to say, what do you think about this? But without saying anything. This setup has allowed me to get to a place where I'll be debt-free in the next year and ready to start investing for my future. I'm unsure if that will involve buying property, possibly with him, but I'm hoping to have clarity on that decision

by this time next year. We're 37 and 38 and we have no plans to marry or have children. We love our life as it is my concern is that we might be missing something practical should i be considering writing a will even though i don't have anything to pass on right now should i be reviewing my pension are there any other considerations like taxes or protecting ourselves financially if one of us was to die unexpectedly is this a situation where it makes sense to marry for practical reasons

any advice on setting ourselves up for this lifestyle would be much appreciated. The question is the best one at the end, which is like, should we marry for practical reasons? And I'm like, that's why you get married. You don't get married to have a party. You don't get married to get the dress. You don't get married to have the ring. They're the bonuses that are the wonderful celebration elements of this and there's a wonderful commitment to people saying actually we want to be together you know hopefully for the rest of

our lives that's all the nice bits but marriage is a contract an arrangement and a partnership for practical reasons literally i mean a few hundred hundred years ago, it was how people like money passed around and how, you know, like estates were secured and, you know, security was secured. A dowry. This is like, you know, Austin, Tata Jane, Austin stuff, isn't it? It's for practical reasons that you would get married,

but it's like flipped to be more, oh, we're getting married. Yeah, we're going to have a party. Like in front, say, have a party in front saying declaring your love in front of all your loved ones and bringing everyone together and joining of the families but actually like laura said it's in its in its most natural state it's a commitment to each other and it sounds like that's what you're trying to figure out how and to navigate and build that together and so the good news is there are a couple of different ways you can do that so um

marriage or i love civil partnership civil partnership is a great arrangement for people who don't like the idea of marriage and might have you like people are burned by past relationships but my parents not working out there's lots of reasons why people they come from bad marriages yeah um but there's like civil partnership is some people might have like you know a party and stuff but some people might not and it you know, a party and stuff, but some people might not. And it's literally, basically it replicates marriage. But you can just go to the courthouse and, courthouse in America, you can go to the town hall and get married. But I think what the third element to this is if you don't want any kind of formal union,

you can try to document and put in place arrangements that replicate it so for example um if um he has assets and he would like them to be left to you in the event that something happened to him so for example he pays you a long-term relationship you plan to spend the rest of life with each other you don't plan to have children and you don't plan to get married if something to happen to him illness wise or he passes away you get nothing yeah zero like nothing so if he thinks and vice versa to you if you i know you don't have any assets but if you're in that situation you can put in place obviously a will that can like step in there and you can say you can say i want this to be left to you same with

life insurances and protections you know at the moment they are sharing bills. And so he, at the moment, it's not clear whether without her, if she was poorly or if she passed away, whether he could carry on because he's been having the bills paid for. And so that's like, that's the partnership bit. We're going to do this together. We're going to look after each other. If you're ill, if I'm ill, if, you know, if anything's happening,

if you've got job losses, we're a team. And and what you want that's fine for you to say that but the law would step in if there wasn't anything written down yeah and so I think that's why it's really good for them to think of when Holly looked at me the reason she was looking at me about the bill thing is we see often in relationships where especially a man might be more reluctant to get married than the woman, but the man will be building up the asset and the wealth and the woman won't be. So just because she's paying bills, it doesn't mean that she would have any legal rights.

So she's subsidizing him, but she's not putting money aside, kind of, she's putting a little bit aside, I think she said, but she's not got a property that she's paying down a mortgage on or she's not or she's not investing an equivalent amount which is the way you can do it you can kind of go no worries you pay the mortgage but i need to put this 600 pound a month into an investment account and that's the same so you

can you don't have to buy into consumables yeah it is it's going like i'll pay for the food shop and so he's banking this kind of equity that you're making there's nothing to show for it at the end of the day if a relationship contribution that you're making there's nothing to show for it at the end of the day if a relationship breaks down and that's what happens you have nothing to show for your contribution for the salary that you earn

what is it going towards food that you eat no thank you so the way you either have to make sure that just because you're not buying you're replicating that

what's called that building up capital so whether it's building it up in an investment account maybe in the future buying an investment property but you don't need to buy property but he's banking and building up wealth that'll look after him in old age what's your plan because if it's not a joint plan because you can own own homes together and not be married yeah you know you can both own this if you're if you're like one option for them if they're in a really good place

you know you save up and buy into the house and own it jointly you know you can do that you don't have to be married to own a home together but yeah i'm glad she asked the question because we've seen it too much haven't we so many women there's not enough education around it so many women just go i'll pay the bills and they're not paying into anything that grows any assets that grow and then large percentage of marriages end in divorce and a lot of women get burned by not being educated on what they should be paying especially i'll buy the kids clothes i'll buy the kids clothes she was like we say time and time again we've had this chat with you lydia i'm gonna use lydia example in a safe way which is about when you've talked about like whether you want to buy a property yet whether you don't um whether you want to you know change the living situation there's periods of time where all this is okay yeah so for a period of time if she's paying the

bills and she's kind of building up savings in the background and she's paid down some debt like there's a period of time where it's not wrong but we all have to mentally set a deadline to that time and when you've got to that deadline time you in your head either it needs to be in place where you are um even if you're not like said buying into the property or buying a new property together you're sloshing stuff money to the one side that's building up wealth at the same time but for a period of time it's fine it's just the longer it goes on why are you running away from marriage a commitment you're like formality yeah we're going we want to be committed to each other

then you have to have the conversation about okay what am I going to do it just does make me like so often it's usually it's usually a male reluctance to get married

which again is fine I think there's this like really battle around like the party and the thing we don't need that but then there's this reluctance to commit

to the more important things which is well the protections that it gives. Your partner's financial future. And so, like, for me, that's a red flag. If a partner doesn't want to talk about the underlying bit, you know, I've spoken to so many women where it's like,

oh, yeah, we might get married one day, but he really doesn't want to. I'm in a good place, like... That's fine, but let's get the legal sorted then. Yeah. Because you have to have a plan B. You have to have a plan B you have to have a plan B on the split

did you watch that I'm not there yet it's on Barcelona yes I watched it yeah the husband obviously if you watch the first

series she's a divorce lawyer she gets divorced and they both talk about the importance to their daughter about having a plan B because they thought

they were going to be together forever and they didn't but they both had a plan B in place I think they had a prenup and that's very quite American it's also drama yeah yeah

it's like oh sure we'll write a prenup when most people don't have don't do a prenup but yeah that marriage and the commitment thing is just a little bit

off for women a lot of the time and we only really ever speak to women that are burned by this rather than men yeah mainly I mean we I don't no men have ever come to women that are burned by this rather than men. Yeah, mainly.

I mean, we are... No men have ever come to us and said that or anyone in our lives where I feel like the man has got off worse. So put a ply in place, even if you don't actually want to get married. And life insurance as well. The importance of life insurance. Yeah, and that's where you go through all the... What are all the contractual and legal benefits of marriage?

What entitlements because everything is down to for example next of kin like if something happens to your partner and who's gonna ring an accident you might not get the phone call no exactly there's like what protections and things and rights do you get and can you replicate that through documentation or through something like a civil partnership if marriage isn't for you um because there's there's no reason not to and if as long as you both are fully aware of the consequences of not doing that at least you're informed as well yeah just be informed even if you're not going to do anything just know that you're not going to get a nasty surprise should the relationship break down or something

happen to one of you community win time I bought a house it was the longest we've got a very house focused episode this week it was the longest process in the world that has left me

traumatised oh god is this a win? so I did it I'm finally on the ladder as a solo buyer just outside London I still can't believe

it's happened I cannot wait to do my budget with a mortgage payment on it oh my god imagine like how long she's waited for that moment where she's paying a mortgage not rent like I know it's important to lots of people and especially when sometimes when people are buying on their own like it's such a big achievement that you do that big switch and it's it's so hard to do so well done and we don't underestimate how difficult that is.

No mean feat. No well done. 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. Time for our next dilemma again on the house theme. 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 okay i'm done let's go back to the vault we're mortgage free what should we do with our new excess this is a good one hi girls i'm in the fortunate position of not having much consumer debt. I'm only three months away from paying off my 0% finance on my iPhone. Brackets. I'll never take that approach again, thanks to Sink Heaven. People forget about the phone contracts. In the same month, I'll also finish paying off my student loan after 18 years.

I have no credit cards or car finance. I feel like I've got a good foundation to build on and I've started working on growing my emergency fund. Recently, my wife and I decided to sell our house, which we renovated and added significant amount of value, but still have a mortgage on. We're now moving to another house in the same area that we love and will allow us to live mortgage-free. I'd already been doing research into going mortgage-free. It took a while, but the penny dropped about just how much interest we'd pay been doing research into going mortgage-free. It took a while but the penny dropped about just how much interest we'd pay over the life of the mortgage and hearing you talk about the potential of going mortgage-free really solidified my thinking. The house we're

moving to is another renovation job which we're looking forward to. We think we'll be able to do all the work we need on the house using the equity from our current house sale while still having a healthy nest egg of around 50k left over that's even allowing for contingencies. Our dilemma is what should we do with that 50k and the extra 800 pounds per month we'll have from no longer paying our mortgage? We also own a rental flat in London with a mortgage on it. Should we put the 50k towards decreasing the interest on the flat's interest only mortgage, and use the £800 excess to start paying off the capital, allowing us to keep more of the rental income? Or should we invest into the stock market or into a private pension or a bit of all three? Currently, we don't have shares or private pensions. We're both freelancers and just didn't give it enough thought until now.

But listening to your advice has opened our eyes up until now the rental property has been our main asset for planning for our future financial security but after reading the financial playbook and listening to your podcast we think it might be time to diversify our investments and create a stronger future for yours for ourselves what do you think amazing Amazing. That's incredible. This is really exciting. Yeah, it's good. My brain is quite a long one, so I've lost a little bit here. So when they do this project, will it be mortgage-free? Is that what you said?

Yeah, I got the impression. There's not a home mortgage. No, plus 50 grand left over as a nest egg. After renovations and everything. So they'll have a mortgage-free home and they'll have 50K. And they'll have renovated it, yeah. Okay.

Sorry, because I was like, oh, have they got a home mortgage? Right, so, and I love, and I love that they've brought the playbook into this and I love that this was the point of the playbook because the playbook is like a set of steps that you can follow and you apply your situation to it. And so we'll walk everyone through it

because we're going to do this now to help give them the choices and then they take what answers, they make the choices they want, we'll give them the choices and then they take what answers they make the choices they want we'll give them the suggested answers so we always want a really good emergency fund and so the nest egg this 50k for me

is where they need to start because the mini emergency fund for them isn't relevant like at least one month's expenses they've done it and then this the consumer debt free or nearly she says like the iPhone so they're virtually there on consumer debt free so then you need your bigger emergency fund

two freelancers uh no mortgage so that like when what you need to do is yeah just like sit we say like three to six months expenses sometimes more if you are freelance because of you know it's a little more risky. But their expenses are going to be relatively low because they don't have a mortgage. That's usually a big chunk of it. So working out that number, and for now, let's pretend it's 50. Like, because I think that, imagine being mortgage-free and having 50 in cash, you might bring it down to like 30.

But picking the right emergency fund, and then the next thing you do is you go, you buy a house, you've already bought a house and then you make sure that you budget what they make from their regular income. It sounds like they make money on the flat as well. So what I don't know is whether they bring in that income into their normal income or whether I would love it

if their freelance income can sustain their spending, including what we call big life goals. So when you're moving through the playbook, this is the time to make sure you're traveling making sure you're buying nice things for your home or going on nice treats like um they enjoy renovating and that's like a bit of a pleasure but that's kind of catered well they'll have paid for it with this so that so making sure that their budget their income can sustain a nice life. It's just ultimate goals. And then we move to grow. So lots of people have dreams of or have a rental property and want that to be a pension.

And it is not a retirement option. It's just the wrong option. How many people have you spoke to where they've gone, I don't need a pension because I've got a flat. It's usually, by the way, someone not from money,

someone that isn't used to wealth, someone that might have heard something down the way a someone not from money yeah someone that isn't used used to wealth someone that might have heard something down the pub from someone once that says i'll live off rental income and what that shows is usually a complete lack of understanding of the tax system and about how to efficiently you know build wealth and so it should always be like a nice to have as part of a retirement portfolio so they are um. And the other thing that people don't realise in the UK, you get taxed on the rental income. You don't get taxed on the profit. So when she said it would be nice for us to like

keep more of the money on the mortgage, like overpay the rental mortgage and it's interest only. It doesn't really work. Like it would help it a little bit and a little bit more would go to you, but you're still paying tax on the income. So on the left, you've got this like rental property that you're paying tax on the income lesser tax credit but it's not a lot it used to be a lot more than

it was um it really has disincentivized landlords which is you know i'm quite a bit left-leaning and i think that's okay i'm all right with that i'm a landlord myself but i'm comfortable with that i'm more on the side of a tenant to be honest and so but they disincentivise it because people were buying up houses cheaply loads of landlords doing really well and everyone can't

get on the property ladder whereas over here you've got pension where you get a employer contribution not for them because they're freelance but you get your

pension from the government you get your top up from the government your tax back so it makes more commercial like commercial and economic sense

to go over there and so that's what the best answer he gave because it was him wasn't it? Is it he? I'm not sure He said my wife Not sure

Might be a she Didn't you say my wife? But she could be a She could be in a homosexual relationship so she or he they are in such a good place that they're starting to talk about diversification and this is what's so proud but that's why that this is where they need to be really leaning into

um this is where i'm like i wish the financial advisor industry was better more accessible because it's still not designed for their level of wealth yeah which is crazy because they've hope mortgage free like they're going to be investing they're going to have a lot of money to invest hopefully yeah but where um i feel like i've been all over the place with this answer so i'm really sorry everyone at home so i'm going to bring you back to it but what we're talking about here is looking at the options for and let's say we're going to keep all the cash in emergency savings. It's your options for retirement. You ingrow. So the way you grow is you put money in the stock market, you invest it,

you put money into property or you overpay your mortgage. They've already overpaid their mortgage. So that's not one of them. They've got another mortgage, obviously the rental one. But it's a balance between the two. And with only 800 excess, I'm kind of like be leaning into investing for retirement. And at the amount that you're investing, really starting with a simple SIP in the UK, which is a self-invested personal pension, you can go to your bank for one of these. You can go to all the major platforms. We've got some that we work with. And basically, once you look at the fees at that level, it's not going to be too extortionate. I don't think you need extra help. I think you could do

a risk calculator on one of these robo-investor websites, which leans into your age and your risk appetite. And for me, I would, if it was me, I would be dumping 800 at least a month into pension because you need to start that pot building. Now, what you may do, and I've had people in our community do this, get comfortable with that, get used to it. Because a pension is like a bank account, but when you've not had one before it's a bit overwhelming because it gets locked away and you can't get it back out again but once you've started that if you get comfortable you may go into that emergency fund of 50 and say we're gonna dump that we're gonna dump 30 and we're gonna run 20 into the because again you get the government top up you

get a pension top up and it grows but you You get free money. You've added to that pot. From the government, yeah. I would also though... Seems excessive, that emergency fund. Well, it does. It does. They're freelance, but they'll be mortgage free. Mortgage free, yeah.

The other thing I'm really interested in, and this maybe would be one reason I would possibly go see a financial advisor is, I've got my eyes on that London flat. Sell it. I know you would in a minute. But there's like, you've obviously obviously hopefully you've

benefited from capital increase in that flat and so yeah if it's a really good asset how long is it going to grow in value for there's gonna is there gonna be it should really grow the same in the market but at least in your head that's like pension and you'd be growing you'd be growing your pension tax-free and getting a tax top-up from the government whereas the other side it's growing in capital but two things one when you eventually sell it you're gonna have to pay your pension tax-free and getting a tax top-up from the government whereas the other side is going in capital but two things one when you eventually sell it you're going to pay capital gains because it's your second home so you'll have to pay tax on any profit you're making anyway um but secondly you are paying tax on the rental income so i think that if there's any reason to

possibly go and sit down with someone and then you may be relevant financial advisor because depending on the value of the equity in that it might be a good enough fee to go sit down with someone that you recommend. So you've asked the right question. You've moved all the way through now. But I definitely think pension was glaring in for me. And just getting in that market and getting comfortable with some passive earnings. And so if you want to end up keeping the flat and the pension that's fine but and getting a full understanding

of the tax implications of that property I think would make you re-evaluate possibly yeah versus because obviously they'll be paying tax

and they'll be doing a self-assessment so they'll know but the interesting thing for me though is that we don't have to talk about this we're not this is the wrong way around a little bit

they're not looking at retirement and working backwards and that's really what we should all do so there's we always tell people we want you to be getting up to where you're investing minimum of 15 percent of your income into retirement but you won't hit that straight away but we want to give someone a figure to work towards um and that's all relative because it depends on what you're earning right now 15 of what you know if you're 15 of a million a year is quite a lot of money going into retirement 15 on 30 grand a year it isn't as much but it's still a big chunk to us isn't it but what you should do and again financial advisors can help with this but a lot of the calculators online can

is start with the end in mind what pot do you need for 10 20 30 40 years time whenever you're retiring with inflation in mind to live off like how much and there's things online that can help you with that i think we've got some articles on how to do it as well once you're there work backwards and these calculators will tell you what you need to contribute per month to hit that because your 800 over here just happens to be your excess what if you need to be put in a thousand what would 1500 yeah so i think there's like a two-ended approach, which again, if you have enough investable assets, a financial advisor is amazing to walk through. If you've not, they annoy me usually

because they're not the right help for you or they don't want to help you because it's not worth it for them because they work on commission. So percentage of a low amount is too low for their time. But it doesn't sound like your financial status is too overly complicated that for their time but it doesn't sound like um your financial status is too overly complicated that you can't do some of the things that laura said and go and get a bit of self help by finding out those things and doing your calculations modeling it out you

give them some good tips on i would do bum bum bum and go and find out all these things and make decision for yourself like laura sometimes financial advisor will tell you one thing because it's the best thing financially that could happen but actually you might find that something else gives you more comfort are you not keeping the house or having a retirement they might love

having a rental property and so even if financially it's better to do the other thing if they want to keep that as long as they're also diversifying yeah

this is like what a good dilemma I know I want to see the house to be honest I want a piece of paper and a pen yeah can you make like a renovation TikTokiktok yeah laura wants to do all the math and i'm like what do the windows look like is it a period property are we talking george and sash windows

yeah what are we talking that's all i care about any final any final episodes any final words um oh I feel like it's exciting that they're gonna go away and do modeling I feel like people don't do this enough

and Laura's always like people ask questions like I want to say passing the street probably do and I'll literally stop people

and like so I've had a bit of cash come from a family member and I don't know what to do with it Laura's like model it

like get a pen and paper out like what pretend yeah just you cannot underestimate the power of doing a bit of modelling especially when you're mulling over something

and it's sitting and it's annoying and you keep daydreaming about it and you're just not sure like a lot of the time it's just maths it's just numbers

so you just need options you just need options A, B, C it's a bit like do you know when someone says I don't know if I want to go out or stay in and so I go

let's go out they'll go I want to stay in or stay in and so I go let's go out they'll go I want to stay in sometimes you need to see both options speaking to the wrong people because it will inevitably always be we're a broken record aren't we but bringing them to life and making them more real helps you navigate decisions and like I said I think a really good takeaway

for lots of people is it may be close for you it may be a long way away but model retirement a little bit have a little think about what your lifestyle is going to be close for you it may be a long way away but model retirement a little bit have a little think about what your lifestyle is going to be like where you are and money helper is the government's website on this and it's super helpful that it's from the money and pension service i should hope so with a name like that money helper it's really helpful good freaking job um but i think more importantly it's independent it's not like a it's not a brand or anything go to them they've no vested interest other than they want you to get your shit together so they don't have to look

genuinely this has been a bit of a light bulb moment for me because i don't think i've invested enough time in thinking about it because i just think it's so far away i invest into a pension and we invest in the market but actually you've not you've not connected the two things what will we need in our i've not worked out money to figure what you would need you just have to try it's all assumptions remember no forecasts are correct it's all like and there are there are websites to help you you can forecast inflation across 40 years so you you have to try and you do that exercise and this is what a financial planner would be really good at but they're just not able to help everyone but what you know what salary you've got to feel for the salary that you can live off now and so it might be that you say I want to I want to be the same way as I am now and the same

lifestyle same amount of dinners out the same amount of holidays yeah but let's push that through an inflation calculator because in 40 years when I retire that might need to be x grand so you can do that and then you go okay what pot is needed to deliver that amount of money and again it's assumption based you can take low averages delivers x amount what do i what's the gap so no one knows but there'll be a there's a rough and ready calculation at least at least sets you in the right direction but we might do it from a lot taller might sit you down and we'll do it because I genuinely think mine like

I should definitely be concentrating more on mine we might even be able to get a financial advisor to do it with us do you know like I've always wanted to do that like show you

what happens with a financial advisor like it's not like a smear test but like a scary possibly looking under the hood we have got a good yeah

good one that I think we could get the help from yes I think that'd be really helpful is that enough last words for you like I feel like yep

I'll just say no next time any last words fill the word count no no is a full sentence as we've said before I used to type and that is a summary of that

thank you get your word count up. Yeah. Boom. Got it. People used to write words, but then highlight the text and make it white.

At the bottom, like a full paragraph. Blah, blah, blah. That's all for this episode. The Vault is now closed. And just a quick disclaimer, The Vault is just a chat around life and money topics.

We are not giving financial advice.