I was blessed to be raised with financial education at the dinner table. That my brothers and would be financially confident was an obsession of my parents. We discussed interest rates at the table (whether we liked it or not) and were included in discussions about major purchases and how to avoid bad debt.

Partly due to positive habits formed young and partly because I began my working life (at 15yo at McDonalds) in Australia, which has a compulsory pension scheme with a guaranteed employer contribution, I began saving for my retirement at an age when I would have preferred to spend the cash. Of course today in my 30s I am more prepared for the future than most of my peers (and most British adults in general) with a significant nest egg invested in a diversified portfolio of assets.

Ah but my friends… And so many students and people I get chatting to at the pub… They all wish they knew when they started working what I knew when I started working!

My friend Lisa has been at her law firm three years. She started as a bright eyed enthusiastic and eager worker. We always assumed she would arrive late at dinner or have to work weekends, and for the first couple of years or so she did just that. In the last few months however I noticed she was suddenly available; and unhappy. It was so unlike her. So of course I asked her about it.

She hasn’t seen a pay rise of any significance in two years and feels her company takes her for granted so she just “can’t be bothered” She earns a good salary but has been using her overdraft every month and couldn’t understand how this was possible. She wasn’t sleeping properly because as night begins so does her panic about money and the future. To add to her general stress she decided to start looking for a new job that would invest more in her.

 Doing what I do I am often, like a doctor at a party, asked about “just this one quick thing” – suffice it to say we sat for a couple of hours and chatted about where she was at and where she wanted to be and what path she could lay to get there. I wanted to get her from financially apathetic to organised and energised. Not completely altruistic – I wanted to get the old Lisa back!

So we sat with her statements and bills and put together a budget that she could stick on her fridge at home. We set up an ISA and a standing order for payday so that she can put some of her salary towards saving for a deposit to buy her own place. She had all her money going into a current account (no wonder she couldn’t keep track!). I helped her put together a sensible and manageable repayment schedule so she could pay off her (relatively small) credit card debt so she could stop worrying about money being wasted.

Also turns out her company has a pension scheme that she wasn’t signed up for because she didn’t understand the implications of the company matching contributions so saw it as a paperwork aggravation not as free money. She said she was going to complete the paperwork (though pretty sure I’ll get enlisted into service) and that she would contribute a little each month as a start but would go to the maximum matching amount after she paid off her credit card.

This was a few weeks ago. I’ve received a few emails but she cancelled our last girly evening because she had to work late so I don’t know how she’s getting on but I’m confident.

Lisa has so much ambition, all she needed was a bit of guidance so she could take control of her money and get into the right habits to be able to live the life she wants. The best time to have gotten this information was at school or university, but failing that (and almost everyone in this country does) it’s the kind of information she could have benefited from when she started working. Today she would be debt free, three years into an aggressive saving campaign for a deposit and she would have three years worth of pension contributions forming the foundation of a retirement she can’t picture so wasn’t preparing for!

Vivi Friedgut (June 2012)

I’m just glad (and so is she, though she’d never admit it) that she had a me!!

Related articles

• Doctors need to get real on pensions (henrytapper.com)
• How can you tell if your pension’s any good? (henrytapper.com)