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20 April 2014 Last updated
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Is financial fear holding you back?

Can pulling your head out of the sand when it comes to money matters really make you instantly richer? Aoife Stuart-Madge is willing to give it a try.

By Aoife Stuart-Madge
1 Jul 2013 | 12:00 am
  • The first thing to realise is that money management is not the scary monster you imagine it to be.

    Source:Getty Images

There’s a dirty little secret hiding in the back of my cupboard: my financial files. Inside are my bank statements, credit-card accounts and household bills. And, aside from the text messages I get to inform me my direct debits have come out of my account each month to cover my minimum payments, I have little to do with that file. In fact, if I’m honest, thinking about it makes me feel a little bit sick.

You see, I’ve never exactly been what you might call a money saver. Ever since I’ve had a grown-up job, I’ve taken advantage of every shopping resource at my disposal: bank loans, store cards, credit cards and, ahem, deferring student loan repayments. In short, I’ve spent everything I’ve ever earned and then some. What have I got to show for it? Well, a heck of a lot of shoes, a few ‘investment’ dresses and a (rented) apartment decorated with overpriced accent cushions, mostly. As Sex and the City’s Carrie Bradshaw put it, “I like my money where I can see it – hanging in my closet.”

Though my husband would tell you differently, I’m not deliberately frivolous. I just don’t get the point of squirrelling money away for a rainy day. Let’s face it, this is the UAE. We don’t get rainy days. As far as money matters are concerned, I spend now and worry later.

And when it comes to how much I owe on credit cards or how much I’m paying in bank charges and interest each month, I’m firmly of the ‘ignorance is bliss’ school of thought. As long as I’ve enough money left over after paying the bills to hit the mall and have a few nights out each month, I’m happy. Savings? Pah. Investments? Unless you’re talking about the Louboutin variety, I’m not interested.

That was until last week when my husband dusted down my box of dirty financial secrets and informed me that the amount of money I’m paying in credit card interest is enough to buy myself a new outfit each month. He had my undivided attention.

Unlike me, my husband excels at managing his money. He’s long since paid off his student loan; he clears his credit card at the end of every month; and he even has a (gasp!) pension plan. But even though I knew what he was saying made sense, the thought of wading through my murky financial history filled 
me with fear.

And I’m not alone. In her book, Nice Girls Don’t Get Rich: 75 Avoidable Mistakes Women Make with Money, Lois P Frankel lists fear as the top reason that women are being held back financially. So what exactly are we so afraid of? Karen Meager from financial consultancy firm Monkey Puzzle (www.monkeypuzzletraining.co.uk) admits that getting to grips with finances can be daunting – so it’s no surprise that it causes some of us to freeze up completely. “When fear kicks in,” she says, “some of us attack the problem, some of us run away and some of us put our head in the sand, or go into paralysis.” Admittedly, I’m firmly in the latter category. So I decided to face my fear head-on and, for the first time in my adult life, I wrote a budget. This included listing everything I had spent in a month.

The results made for some pretty uncomfortable reading. In one month alone I spent enough on double-skimmed lattes to fund a weekend stay in a five-star hotel. I’d also spent an alarming amount of money on kitchen utensils (I don’t cook) and stationery (I can’t remember the last time I wrote a letter) – and I’m not even going to mention my overpriced and underused gym membership.

So faced with the fact that I might have a slight shopping addiction, what’s a girl to do? When it comes to savings, ISAs, bonds and premiums, I’m clueless. You might as well be speaking a foreign language. The first thing to realise is that money management is not the scary monster you imagine it to be. In fact, according to Karen, it’s really not that complicated.

She says, “Many people believe they are not appropriately educated to make big-money decisions. Or if they make a financial decision that goes wrong, it can taint future decisions.”

The good news is that the financial sector is becoming more accessible. Karen says, “For many years the industry hasn’t helped with these fears – launching overly complex products and putting IFAs [independent financial advisers] and financial high-flyers up on pedestals – but that is changing and more IFAs, banks and investment houses are moving towards helping people to make informed decisions about managing their own money.”

So now that I’ve faced facts and taken my head out of the sand, what’s the best course of action? “Spend more time actively planning what you are doing with your money,” says Karen. “This is something wealthy people do well – they are very active about reviewing their financial situation. Also, look at your financial position as a whole, not just in bits. What’s in the bank? What do I have on credit cards? And so on...”

She continues by reminding me that it’s no use ignoring 
the problem – that it won’t run away or right itself. “Being honest with yourself and facing up to your financial truth 
may be scary, but it is very helpful in the long run,” she says. 
“It can feel overwhelming at first, but remember things are rarely as impossible as they might feel.”

Dealing with shopaholism is like dealing with any other addiction – recognising the problem is half the battle. Now I’m working through the various stages of recovery, including denial (But it was on sale!) and anger (Give me back my credit card, NOW!). And I’m proud to say I’m making the transition towards the next stage, which is acceptance. I know I have a shopping problem and I’m in control of it. Heck, I’ve even walked past a shoe sale and not gone in. Granted, when I checked over my shoulder as I sauntered past, the shop turned out to be closed. But hey, it’s the thought that counts, right?

By Aoife Stuart-Madge

By Aoife Stuart-Madge