Penny Golightly brings the fun to personal finance on her blog of the same name, especially with her budget challenge, the Tenner Week. We caught up with Penny to talk about budgets and how to live on less.
What led you to writing on personal finance?
I had a job at an advice service in my twenties, and part of my work included creating materials for young people to help them better understand and manage their money. I loved that side of the job so much that after I moved on to other employment, I didn't want to give that side of it up. Around that time I also started writing spoof articles pretending to be a wealthy socialite, sort of a British Paris Hilton type, who was constantly making poor decisions and teetering on the verge of bankruptcy. That was all of the fun without any of the court summonses and bailiffs, and eventually it set the scene for creating a new cartoon character alter-ego who was a teensy bit more sensible with her pennies.
On a more serious note, I grew up in a heavily-indebted household, and the small and large workings of personal finance were very much on show as the daily struggle to get the family out of debt wore on. I learned almost by osmosis about shopping around for a better deal, meal planning, haggling to get a lower price on goods and services, swapping and borrowing, mending and making, buying secondhand and saving up for big ticket items. Looking back, these were all good life skills, and I'm glad that I learned them early.
What are some common misconceptions about personal finance you see online?
One thing I've noticed is that it can be part of human nature to become obsessed by one aspect of personal finance at the expense of the big picture. For example, many people concentrate on cutting their spending right back as if it were the only important element of money management and ignore, say, ways to increase their earnings. Other people might fixate upon a particular type of investment, perhaps only investing in gold or another single commodity, and miss out on other opportunities elsewhere. Also, too many people still think you should leave everything to the financial experts because it's too complicated to understand - but most people can understand most aspects of personal finance; it's just a case of reading up on the subject and improving your knowledge and self-confidence.
What inspired the Tenner Week challenge?
The "broke a week before payday" thing we've all been through is what brought Tenner Week about, way back in 2009. It started with only having £5 left in my purse, in fact, and I was feeling quite anxious about the situation, but then I thought that plenty of other people were probably going through exactly the same thing and it could be turned into a more positive experience. It's a challenge that you set yourself, and it's interesting to see how much you can improvise and recycle during seven days. In my household, we seem to eat better food during the challenge, laugh more, spend more quality time together and make interesting plans for the future. Seeing the situation from a different angle made it easier to bear, and it's good to find a challenge can be rewarding as well as tough sometimes.
Were there any challenges to saving money that you weren't expecting when you started the blog?
Going self-employed meant that I no longer had a regular paycheck, so making automated savings at the end of each month became very difficult. Since then, I've worked out a new freelance savings system where I dice up each payment into separate "pots" as and when it arrives. That took some getting used to, but it's all one big learning curve.
What do you wish we all knew about personal finance?
Well, there are some very savvy people out there who have their finances in good order, so I wouldn't want to tell them something they already knew. However, if you're just starting out on your financial journey, one saying that's helped me greatly over the years is this: Don't buy anything on high-interest credit if you don't know how you're going to make the repayments. Also, things tend to work out better in the long run if you have a plan, rather than hoping for the best.
What are some trends in personal finance we should keep an eye on?
Recently, I've noticed greater numbers of people in urban environments becoming interested in partial self-sufficiency, such as growing and preserving their own food, generating electricity and reducing their reliance on utilities companies and so on. That might be an interesting trend to watch. On the business front, I'm finding the rise of crowdfunding and microloans fascinating, too.