A Little Bit Richer

Iona Bain: Hello and welcome to A Little Bit Richer, with me, Iona Bain, brought to you by Legal & General. Now, when it comes to money, a lot of us have a story we tell ourselves like, “I can't afford to plan for the future right now”, or, “I'll think about saving later”. We're so focused on getting through the month and when we're living like that, it's hard to think about the future. But the choices we make today, where we live, how we spend, what we save, they're all quietly shaping the life our future selves will inherit.

So today we're exploring the idea of present you versus future you and how the decisions we make today, big or small, will shape the opportunities we have later. Joining me today is financial educator and content creator, Tolu Frimpong, who has built a community helping people rethink their relationship with money. Tolu, welcome to A Little Bit Richer.

Tolu Frimpong: Thank you for having me.

Iona Bain: Let's start with a 30- second summary of why looking after your financial future is so important. Are you ready?

Tolu Frimpong: Oh my gosh. The pressure.

Iona Bain: You'll smash it, I'm sure. All right. Go.

Tolu Frimpong: Your financial future is so important because the reality is time is going to pass irrespective of how we spend it. It's so important for present you to really think and prepare for future you. So the lifestyle you want to live, the house you want to live in, the activities that you want to be able to do later on in life, all of that is shaped by the decisions that you make today. Yes, whilst life is happening, cost of living is high, we need to really think about what we're doing here and now so that later on we get to enjoy it.

Iona Bain: Oh, yes. That was absolutely spot on. Yeah.

Tolu Frimpong: Very good.

Iona Bain: Brilliant, brilliant stuff. And very, very inspiring as well. That's exactly the right tone, I feel, to start our conversation because you yourself have made quite a big financial decision in recent times. Could you explain to me why you decided to move you and your family out of London and what impact that's had on your finances?

Tolu Frimpong: So my husband and I made this decision a couple of years ago to move outside of London. It wasn't a decision that we took lightly because I'm a Southeast Londoner at heart, born and raised, and I've always loved living in London. However, I really had to start thinking about the future that I envision for my family, for my children, what I want our lifestyle to be like. And unfortunately, it was just becoming unaffordable to stay in London just because of the rising costs. Our mortgage was rising. Our cost of living was rising. Everything was just going up and there wasn't enough of a gap between our income and our expenses. So we really had to have a tough conversation about, okay, if we want to be able to continue to live a certain lifestyle, we really need to re- strategize and start thinking about, okay, what can we do to widen that gap?

 And we made that tough decision to uproot our family, make our children change schools, change home and move outside of London. And it's been an incredible journey so far. Initially, I was a bit nervous and sceptical about doing it because I've never lived outside of London. However, I'm glad we made that decision because it saved us a fortune and it's just given us a better quality of life.

Iona Bain: So no regrets?

Tolu Frimpong: It's only coming on to a year now since we made that decision to relocate. And yeah, so far no regrets.

Iona Bain: But that's really interesting that you were thinking ahead and able to really plan for the future. We know people do tend to be quite focused on the present for very understandable reasons, but why can that be a bit of a problem when it comes to our finances?

Tolu Frimpong: The reality is that we focus on the things that are urgent rather than the things that are important. So because we're focused on here and now, I need to feed my children, I need to pay for groceries, I need to pay for the afterschool clubs, et cetera. There's always something right now demanding our money and our attention. So we focus on that without looking at the bigger picture and what we want our future to look like. What we end up doing is missing the opportunities for the better life that we could create for ourself because we haven't lifted our heads above the parapet.

Iona Bain: We almost get stuck in survival mode.

Tolu Frimpong: Exactly. Survival mode. Yeah.

Iona Bain: So how do we shift out of that and start thinking more about the future?

Tolu Frimpong: There's a lot of things that we can do. I think number one is really understanding our numbers and really having honest conversations with ourselves about where we are and where we want to be. So like for myself, we had to have that difficult conversation about moving outside of London. For somebody else, it might be we need to downsize our house. I need to sell my car or choose alternative modes of transport. What can we do to reduce those expenses so that we can put money towards the things that are more important to us? And yes, there are so many external factors beyond our control, but the things that are within our control, let's focus on that and make decisions so that we can do the best that we can with the resources that we have available.

Iona Bain: So for you, the decision to move out of London cannot have been an easy one. It's where you were born and brought up. How do you separate the practical and financial considerations from what can be quite an emotional decision to make?

Tolu Frimpong: We used to live five minutes away from my in laws. So my mother- in- law, father- in- law, were literally around the corner. So we had that option of 24/ 7 support for the children and we had to give that up. So that was a big emotional decision to make because my husband's super close to his parents and I'm super close to them as well. We lived with them for three years when we first got married. So very close- knit family. So making that big decision to move out of London wasn't one we made lightly, but we really did need to think about our children and the future that we wanted for them. And we knew that as much as it was something we wanted to do emotionally, stay close to family. We knew that financially just didn't make the most sense for us to stay and we needed to make that sacrifice for the future that we wanted for our family.

 So it wasn't an easy one. It was a very emotionally draining one. And it is one to this day that I'm like, it would be so nice to have them close by. I'm still hoping that we can convince them to move down eventually.

Iona Bain: That's a long- term plan.

Tolu Frimpong: Yeah, exactly. That's the long- term plan, to get them to retire and move to Ken. I think sometimes we do need to separate the emotion from the practicality and think about what actually makes the most logical sense.

Iona Bain: I completely agree. And my parents have downsized, which is a big financial decision to make, and they moved halfway across the country as well, partly to be near me and my brother, but also partly because it made financial sense for them. But again, it's not easy. They were in that house that they were in for 30 odd years and therefore I'm very admiring of people who can make those big decisions, but it is easier said than done. So what would your advice be to anyone who is thinking about making a really big decision that would benefit their finances, but is going to represent a big change in their life?

Tolu Frimpong: I would advise them to sit down and write the pros and the cons of this decision that they're making, because I think when you actually take the emotion away from it, when the pros strongly outweigh the cons, it makes it easier to make that decision. You can come back to that. Exactly. You can come back to it. It's like, okay, yes, this is hard. However, we've made this sacrifice because. And so for my family, it was the best option, but also we were considering things like secondary schools for my children. And just recently, my son got into his first choice, secondary school. So it was little things like that, that give you that reassurance that, oh, okay, actually we have made the right choice for our family. So yes, it's not easy, but nothing in life is easy, so you have to choose your hard.

Iona Bain: Yeah. Embrace change.

Tolu Frimpong: Exactly.

Iona Bain: And there will be people who are wondering about making a change in their finances when it comes to their pensions or maybe starting to invest, but they don't feel like they've got enough money. And for some people, that is a reality. For other people, it may be more of a perception rather than the reality. So what would you say to anyone who doesn't feel that they have any money to spare for those sorts of things like a pension or investments?

Tolu Frimpong: Yeah. I would say that you can't afford not to do these things. So if I give myself, for example, I opted out of my workplace pension when I first got my graduate job and I worked at that job for 10 years. So I missed out on all of my employer's contribution, my employer's match, and plus the compound interest that I could have been making on that pension for a decade. And that's because I thought I needed that money. I want to go on holiday, I want to travel, I want to save for a new car. All of these things that I thought were a priority then.

Fast-forward to nearly 40 year old me, and I'm kicking myself at that decision that I made back then to opt out, because yes, you may think you can't afford to pay into these things, but it's for your own betterment and for your own benefit. So you're paying for your future self. Right now you think that, okay, this is the best decision, but actually you're only doing yourself a disservice later on down the line. So all you're doing is you're delaying your heart.

Iona Bain: And part of the problem is that presumably at that point when you were deciding whether to stay in the pension, you weren't really being told what the benefits are staying in that pension long term were. So do you feel that sometimes people don't get given the kind of information that they need to make an informed choice?

Tolu Frimpong: Oh, absolutely. I didn't know what pensions were. All I knew was that it was another deduction from my payslip. I'm seeing national insurance, I'm seeing pension, I'm seeing student loan, all of these deductions from my salary. And I'm like, " Why are all these people taking my money?" So we didn't have that education. It's not until I went on a whole journey with money, getting myself into debt and paying off that debt that I learned about the value of things like pensions. And that's when I'm like, " Oh my gosh, Tolu, you've made a big mistake here by opting out."

 So definitely I think it's the unawareness that people have about the importance of things like your pension and investing. So you want to make those decisions today so that future you can be comfortable because the reality is that time is going to pass regardless of what you do with it. And I can't believe I'm going to be turning 40 soon. I thought I was going to be a baby girl forever, but here I am, barely 40.

Iona Bain: It's a shock, isn't it?

Tolu Frimpong: It's a shock and it comes by so quickly. So you want to really make sure you're putting things in place and preparing financially so that you are in the strongest position you can when you meet future you.

Iona Bain: Absolutely. And how important is identity in all this? Because we have previously covered the book, Atomic Habits in our book club episode, and that talks a lot about how identity drives current and future habits. So how would you apply that thinking about identity and how you see yourself to motivate you to really act in your best interests?

Tolu Frimpong: Identity is a big thing. And I think it's one of those things that hold a lot of us back from becoming the best versions of ourselves. So I like to say that saying all the time where if you believe you can or you believe you can't, you're right. So if you don't think you can save money, you're not going to save money. So I've always said, I can't wake up early, but having children, I've had to become a morning person by force because they're morning people. So it's like all those years of me saying I'm not a morning person wasting all those hours early in the morning when I could have been productive, working on my business, et cetera. Had I have had that identity shift back then, I could have achieved a lot more.

Likewise, when it comes to your finances, saying, " I can't save. I can't invest. I can't pay off debt. I can't do all of these things." You're never going to start taking the steps required to then achieve those things. So the book, Atomic Habit that you mentioned, he talks about starting small. So you can't go from saying, " I'm not a saver," to, " I'm going to save 1, 000 pounds a month." That's not realistic. You're setting yourself up for failure.

But what you can do is say, " Okay, every time I spend 10 pounds or 9. 50, I'm going to save the 50 pence and I'm not going to touch it." And then you can build on that little habit incrementally week on week, month on month until you look back at the end of the year and you see how much money you've been able to save. And then you have that evidence that, oh, actually I can do that. And then that identity becomes more real to you.

Iona Bain: Yeah. And it's really interesting because potentially from that small behaviour change in the beginning, further down the line as you develop that identity of someone who is looking after your future self, you're then in a position to make those bigger changes perhaps that will really, really add up and compound over the long term. So there's that kind of relationship from the small habits right up to the big decisions.

Tolu Frimpong: Exactly. It's baby steps, but it all compounds over time for sure.

Iona Bain: And how does somebody move away from thinking, I'm always broke. That's just how life is. That's my situation, to I'm somebody who builds wealth? How do you make that shift from one identity to the other?

Tolu Frimpong: So it's going back to building evidence in support of this new identity that you're claiming is yours. So if you're saying you're not somebody that can save money, if day in, day out, you're saving 50 piece, saving a pound, five pound, 10 pounds, eventually over time that money compounds and then you realize, oh, actually I can save. I've been able to achieve this goal of maybe paying off this amount of debt or opening my investment account finally. All of these little things, you build up that evidence. I think also what we say about ourselves becomes true. So be mindful of the words that we speak. So saying I'm lazy, saying I'm broke, saying I'm never going to be rich, saying only a certain demographic of people can be wealthy. All of these things that we say and that we consume in our content, all those things shape our identity.

So when you don't think you can see yourself in a certain space or you can't see yourself achieving certain things, it's never going to be a reality. You've kind of set yourself up for failure even before you've got started.

Iona Bain: So how did you go from being somebody who made these decisions like opting out of your pension and tending to think about the here and now to somebody who clearly thinks very, very deeply about the future?

Tolu Frimpong: I think it's life. Life happened. I got myself into a lot of debt and I went on a whole journey of learning about money. So a lot of the content I started consuming was more about people starting to budget, people paying off debt, people learning how to invest. And I'm seeing women that look like me who are now investors that have huge amounts of wealth that they've been able to accumulate, not because they were born into money or because they earn a high figure, but because they were just really good stewards of their finances and they were able to make their money grow. And so for me, seeing them being able to do it said to me okay, if they can do it, there's no reason why I can't do it.

My mum always says to me, " They don't have two heads," and it's so true. They don't have two heads. So they're showing me the blueprint as to how I can also do it. I think before there was a lack of knowledge, so I didn't know what I didn't know.

Iona Bain: It's interesting because some people might see that content and think it's a little bit daunting, but you saw it and you were inspired by it.

Tolu Frimpong: Very inspired. Yeah.

Iona Bain: And do you feel like the information that you receive is also incredibly important to you cultivating that new identity? What advice would you have for people who want to improve what they see around them? Because that was clearly, really, really crucial for you.

Tolu Frimpong: Yes, absolutely. I would say be mindful. So if you're just seeing people live these lavish lives, but they're not showing you how they've been able to do it makes it seem like, oh my gosh, I'm missing out. What have I done wrong? Why is my life like this? And there's this like that. But when you're following accounts of people that look literally just like you, ordinary everyday people that just make better money decisions and they're able to pay off debt, they're able to save, invest, et cetera, it makes you think, okay, if they can do it, I can do it too. I think the books and a podcast and everything that we consume can help shape us for the good or for the bad. And I think for me, I was just consuming a lot of materials that helped change my money mindset and helped me get better with money and enabled me to start a platform that I ended up starting.

Iona Bain: Yeah. It's a really good point because for me, I have to balance news about how difficult the economy is. But I know that if I consume too much of that, it then starts to influence my perception of my finances and I start to get things out of perspective. I then have to balance that with information that actually helps me to be more positive and constructive and helps me to keep the news in perspective because otherwise it can get to you. We are in tough times at the moment.

Tolu Frimpong: Tell me about it. No, we really are. I like to focus on what I can change and not things that are beyond my control because it makes me kind of feel helpless. Whereas when I'm consuming stuff like, okay, I can apply this, those are the things I tend to lean more towards.

Iona Bain: And if somebody maybe doesn't feel quite ready to make a big decision about their finances, whether it's starting a new job or moving to a new place, whatever it might be, what kind of one or two things could they start doing today that could really add up and make a difference over the long term?

Tolu Frimpong: What you don't know, you can't change, right? So just learning about money. Listening to podcasts like this, this is a great step as well.

Iona Bain: Absolutely.

Tolu Frimpong: But not just listening to it, but actually taking one thing and saying, " Okay, this is what I'm going to apply today." Whether it's opening that savings account, whether it's opting back into my workplace pension, whether it's starting to invest. Whatever it is, just make that decision. I think that would be a great place to start.

 I would also say, look at what you can do about your financial circumstances. So whether it is skilling up, whether it is speaking to employer about a pay rise. You've been in that job for five years and you've only had a pay rise once. Why is that? And just add value to yourself even within the workplace. So maybe you've asked but your employer said no, maybe ask, " Okay, what can I do?" And make that your mission over the next six months to position yourself in a way to revisit that conversation and get that pay rise. So what can I do within my control to improve my financial situation? And then once I've made that improvement, what am I going to do with that extra money?

Iona Bain: Yeah, because it's not just about saving money. It's also about investing in yourself because then over the long run, that will obviously have a really, really big dividend. So after this episode, if folks want to go away, have a cup of tea, whilst they're waiting for the kettle to boil, what's one thing that they could do to try to make their futures better?

Tolu Frimpong: I think one thing is come up with a plan. So sit down, write down what future me wants to look like and what steps I can take towards making future me a reality, whether it's opening a savings account or opening an investment account, opting back into your workplace pension, just making a decision today that future you is going to thank you for.

Iona Bain: I feel really inspired now to go and do that and have a cup of tea at the same time.

Tolu Frimpong: Love it.

Iona Bain: Thanks, Tolu.

Tolu Frimpong: Thanks for having me.

Iona Bain: A huge thanks again to Tolu. And we really hope this episode has given you something to think about. What's one small step that you could take today that would make life easier for future you? One to think about. Next time, I'll be joined by Tom from L&G for a recap on workplace pensions.

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