I spend a lot of time encouraging people – including family and friends – to build wealth and become financially independent; to put money into a pension regularly; and when the opportunity arises, to squirrel a little away in a tax-friendly Individual Savings Account (Isa).
From little acorns grow mighty oaks and all that. Maybe I should have chosen a career as a financial planner rather than becoming an entrenched member of the press.
I’m listened to most of the time – surprisingly, most of all by my three sons – though many friends think I have now become something of a one-trick pony.
“Change the record,” they implore whenever I launch into a speech on the merits of Isas – one of my few party tricks. “This is meant to be a birthday party, not a lesson in personal finance.”
I usually skulk off into the kitchen in search of a revitalising dandelion and burdock, and spend the rest of the evening monosyllabic and rather sulky. In such moments I cannot help but hum Jona Lewie’s classic tune You’ll Always Find Me In the Kitchen at Parties (worth a listen and giggle to on YouTube).
Yet building wealth is only half of our personal finance journey. You need to keep an eye on wealth preservation – the other side of the personal finance balance sheet.
By preservation, I mean ensuring your income won’t be denuded by frivolous expenditure and that you are not paying over the odds for key household items, such as energy supply and broadband.
It also means making sure you are financially protected if something horrible happens to you – an accident or a serious illness – and the family finances are derailed.
I do take time out once in a while – usually if I have a week off work – to undertake an audit of my personal finances. Invariably, I come out of the other end in slightly better financial shape. For those of you who do not know my back history, I was once an average auditor for Price Waterhouse (PricewaterhouseCoopers as now) in the late 1970s in the fine Midlands city of Leicester, so auditing is in my DNA.
Having just had a week off in the London sunshine, I have completed my latest personal finance forensic audit.
Out has gone an expensive gym membership, which was costing me north of £100 a month and was set to rise in price again.
Although I love a session in a steam room after a sweaty lunchtime run (hobble, wobble) in one of London’s Royal Parks, I calculate that, on average, these steam room experiences are costing me £25 a time – frivolous spending that I can no longer justify.
Goodbye, gym. Hello, changing into my running kit in the office.
Next on the agenda is my electricity supplier. I have been a customer of British Gas for far too long. Why the loyalty I do not know. Maybe because I thought I would only be staying in my current home for a while and I couldn’t be bothered with the hassle of switching. Yet I’m still in the same property, so I can longer justify my love affair with British Gas.
Instead, I will put my trust in one of these new-style auto-switching services that does all the hard work and transfers you to cheaper deals when they become available. Labrador, Switchcraft, Look After My Bills, Flipper or WeFlip? I’m not sure which one yet, but when I do plump for one I would be amazed if my energy bills were not shaved by at least 15%.
Other little things I have done is ensure my Boots Advantage, Nectar and Waterstones Plus cards are always in my wallet – and not in the drawer by my bed. All these rewards cards provide me with a mishmash of benefits – for example, the occasional free ‘meal deal’ at Boots (I love the duck hoisin wrap), free cinema tickets (Nectar) and a discount on my latest purchase of fine literature (Waterstones).
While I am financially protected if something untoward happens and I cannot work, those of you who aren’t – or are unsure about whether you are – would be wise to give ‘Percy’ a try. Available at Abi.org.uk/percy, it gives you an idea of how much stress your household finances could come under if the breadwinner were unable to work because of long-term injury or illness.
I went through this process with a close friend a couple of weeks ago – interestingly, in his kitchen at his wife’s 50th birthday party. He was shocked at the income loss he could experience. He has since bought financial protection insurance. A splendid result. You’ll Always Find Me in the Kitchen at Parties.
JEFF PRESTRIDGE is the personal finance editor of The Mail on Sunday. Email him at firstname.lastname@example.org.