January 19 2019, London

Paula Muldoon

Where did all my money go?

Six months after starting my first developer job I looked at my bank account and wondered, "Where did all my money go?" From a book by a Buddhist financial planner to swapping budgeting app recommendations with my best friend, this is my story of building a healthy relationship with money.

Transcript

Note: this transcript was done live, and as such there might be some errors. If you spot any - please get in touch and we'll get them fixed ASAP.

[Plays violin]. [Slow violin music]. [Music speeds up]. [Applause]. Thank you.

I love turning up at programming conferences and playing the violin! [Laughter]. It really confuses people! So, my name is Paula Muldoon. I’m a JavaScript developer, as you’ve heard at Cambridge Cognition. I’m still a professional violinist in my spare time, talking about setting boundaries at home from work, I practise the violin every evening, and a Makers Academy alumni. I’m a person who spends money. I’m going to talk to you about how my relationship with money has developed since I became a developer, and started angry actual real money as opposed to being a musician.

Don’t worry about taking notes. I will put the slide up on Twitter. I’m not a financial adviser. I’m a violinist and a JavaScript developer. Do not take what I’m saying and as serious financial advice. Research yourselves. That being said, you can definitely do what I say! [Laughter]. Let me tell you first of all about my former relationship with money. When I was a professional musician, I was really good at saving money, mainly because I worked really hard and I had no life or time to spend the money. I just put everything in my savings account apart from what I needed for rent and food. If you want to save money, I recommend being in a job where you have no social life! I had no chance to spend the money. I did save well enough to put myself through programming boot camp. I was proud of how I had done. I was a freelance musician, and I had good savings and financially responsible.

Then I got a tech job. Oh, my God, I have money! It was like money coming in every month at the same time, and it’s there, it’s in my bank account. I don’t have to worry about when it’s going to come. I know it’s going to come every month. I wonder if any of you have come to development from a freelance career, you probably know this feeling of joy, someone giving you money every month. And I think well, I’ve got this money now. I’m going to save money, obviously. But, you know, I will have to buy these little things every now and again because I’m a developer, because I have loads and loads of money now. I can still save all the money and buy all the things at the same time. I figured £20 here and there doesn’t really add up to much, especially if you’re not adding up your expenditure so you have no idea how you’re spending. That was me. So, a few months later, I looked at my bank account, and it didn’t have any more money in it than when I started being a developer. I thought something’s not right here. I was supposed to be in this job that gives me money and financial security and amazing life Skype. Why aren’t I laying on a beach coding?

It turns out £20 here and there do actually add up. I wasn’t buying large and frivolous, cashmere sweaters every day, the new laptop cover case, or buying candles. You can buy candles quickly. They’re really expensive, it’s bizarre. I had to learn about budgeting because I wanted to do things like buy a house, and maybe buy a car, and have a grown-up life, and maybe even retire. That was an amazing idea. I was 30 years old, but better late than never how to figure out to do this. I am half Irish. I really like, I think this is an Irish balanced budget. [Laughter]. Potatoes and euros. That’s definitely what you should do. I started with a Google spreadsheet of my expenses. I what I thought I spent on food, I had no idea. Some of these figures I filled in by hopeful guess work. They tended to be lower than the reality, I discovered. I thought now I know ruffle what the main things are. Then I thought, I should track how much money I’m actually spending. So I don’t know if you’ve ever tried to use Google spreadsheet or Apple Numbers on your phone when you’re out doing your shopping, the mobile experience is horrific. So I didn’t get very far with that because you’re trying to scroll in and see the tiny things to enter, you can’t see things properly, and it was a disaster. I entered a couple of things and that failed miserably. Then talking to my best friend who she and I shared tips together, adulting, a whole other talk! She told me about in thing call You Need A Budget. I thought that’s patronising! True! At well as patronising. She suggested I try it. I had a free month’s trial. I was opposed morally to pay money to fix my money problems. I didn’t want to go beyond the freelance trial but I thought okay, if I make sure I don’t auto-enrol and refund, it’ll be fine. I tried this thing.

It was really - it sucks, you can’t buy things that you want to buy! So, there was this day that I was in the shop in Cambridge where I live, and I found this amazing yellow linen lab coat, mustardy yellow. I thought this will change my life. I will actually, I will be a senior developer, I will be driving a Tesla, everything will be possible but I’ve seen the last 15 seconds of my life. I thought I’ve got this budget, it says I don’t have any money in my clothing allowance for this month. I’m getting paid in a few days, it will be fine. My poor long-suffering boyfriend who heard me talk out loud for 15 minutes about whether I should buy the coat. I thought I will experiment and see if the universe doesn’t come to a quick heat death and I don’t buy this coat. And spoiler alert, it didn’t. It’s all fine. A few days later, when I got paid, and I did a new budget for the next month, I immediately put the money in my budget for that coat, and then I bought it. That was the turning point for me, to realise that I could say no to something that I felt like I needed to have, even though I had only seen it five seconds earlier, and that the universe would not explode. The fact that I can have some control over my money, I will talk about later some of the mind set you bring to this, but I think what is really important here, is that I treated this as an experiment, curious to see what would happen rather than saying no, you can’t have that, bad Paula for spending money. What’s going to happen if I don’t spend this money? The way YNAB works is cool. The idea is that every pound has a job.

If you get paid 2,000 a month, you allocate for your rent, food, something for savings, until you have no money left to allocate. Then you don’t have money that’s floating around in a grey zone. Everything has a purpose. So what can you do about money? I think there are two points to moneying well - that is a verb! The more important is to understand your beliefs around money. We will talk around that in a second. The other one is understanding the practical steps. Let’s talk about the beliefs first. We all have these in-built ideas about money. For example, there will never be enough money, or money is evil, or I’ve always had enough money, or, if you’re me, all three of those at the same time, which is very confusing. But those ideas shape how we deal with money, and they can be kind of subliminal. We won’t quite know that we have them consciously until we start to interrogate them, but they are there. So, for example, if you think money is evil, for some reason, how’s that going to affect you when you ask for a raise at your job? You’ll be defeating yourself. Possibly even subconsciously. Or if you think I will always have enough money, yes, there will be a day when you don’t have enough money, or guaranteed. If there’s never enough money, you may never have a life. You will save, and save, and save, but never spend the money on something that is meaningful to you like a house, for example. So these beliefs really shape how we approach money. They are often given to us from our family, our parents, our upbringing, our society. There are a lot of layers that go into that. There are a couple of ways I can recommend for how you can understand it for yourself.

The first is a book called the Seven Stages of Money Maturity, written by someone who used to be a Buddhist monk and then became a financial adviser. It is a logical career progression! Like becoming a violinist and a programmer! So, this book really dissects the whole experience of how we see money for both ourselves and also in our relationships. Obviously, really important how you deal with money with your flat mates, partners, spouses, parents. We have lots of relationships with other people centred around money, so how we deal with that actually affect our relationship very deeply. There are lots of brilliant little worksheets in this book that you can do. To give yourself a really good understanding of how you approach money. If you don’t have time to read an entire book, there is a podcast called Profit Podcast, and again this is a on Twitter. Profit Boss is geared more towards women in finance. If you’re female-identifying, I recommend having a listen there. It’s set in America so some of the laws may be applicable, and the accent is strange, and I’m American!

There’s a worksheet on the website for that podcast. That worksheet takes 20 minutes and again, it is a quick introduction to these ideas of your beliefs around money. And then talk about money. It’s a really sort of taboo subject in many ways. Like it’s considered to sort of, inappropriate to talk about. You don’t have to discuss how much salary you’re making if you don’t feel comfortable doing that, but you can ask questions like when you go to a restaurant, do you choose a meal based on how much it costs? I always used to do that. I still do. I’m going out to dinner, the experience is exciting, so I’m going to choose the cheapest thing on the menu, and money is evil. It turns out other people just buy what they want. And do you save part of your pay cheque? How much? Do you have a credit card? Again, just find people that you trust that you can have these conversations with. But just ask, and they can always say, you can preface your questions with, “You may not be comfortable discussing this, and, if so, that’s fine.” But be open about it. As a first step, if you want to change your relationship with money, don’t change your relationship with money. Try to understand what you’re currently doing. You already have these habits. Discovering them might be quite difficult. You might look at your spending habits and see oh, my God, I’m spending £300 a month at Starbucks. Or even, never mind, not going to get into coffee shop hierarchy. I’m not judging anyone who drinks coffee from Starbucks. Definitely not! Yes, you might find out some really difficult things about yourself.

That’s okay, because the things are there. And there is a great opportunity to practise self-compassion saying there are these things about myself that I don’t like, I don’t want them to be part of me, but they’re currently part of me. I’m going to give them a hug and say how can we work together? Also find out with the beliefs of money that you have, I believe on our fears and beliefs try to protect us in some way. If you’re thinking money is evil, okay, interrogate that. Do you mean that maybe money is used for bad things? Can you then take money and use it for good things? Can you do something better with the situation with something that’s kind of neutral? So just learn about yourself. Again, the kindness and curiosity are really, really crucial. Once you’ve spent some time getting to know yourself, there are practical steps. I talked about one establishing how much your essentials are, rent, food, bills, transportation. Do a simple spreadsheet. Then work out what your take-home pay is after tax and pension before there are online calculators, go in and Google and al late how much money you make, so you know how much money you’re making each month. I did not know this until five months in my first development job, I didn’t know how much money I was making each month, because I assumed I would make a different amount of money, so it was not weird to me I earned different money each month in my programming job. It didn’t occur to me there was a discrepancy. Know how much money you’re supposed to have each month. After you work out your essentials, subtract the difference from your take-home pay, that’s the money you have to work with, working with savings, entertainment. Budget everything. Give everything a purpose.

I really recommend you need a - I really recommend You Need A Budget. There is some good advice blogs, communities around it, and, more importantly, it helps you gain clarity about where your money’s going, even if you don’t change your spending habits, you at least know, and that’s really, really important. And, again, think of these first few months of doing this as a chance to get to know yourself better, not to change anything, definitely not to beat yourself up because the fact that you’re doing something about your money habits is amazing. And maybe you’ll discover that you have the best money habits in the history of the world, and that tuck just feel good about yourself all the time! Did not happen to me! A couple of other useful tips: automate everything. We are developers, we should be automating things. Automate all your bills. Never risk having to remember to pay a bill because it’s way too easy to forget, and then get a bad credit rating because of that. First of the month is good to have them paid. Just get that done. Max out your workplace’s pension. It is amazing how many developers I talk to don’t know what the workplace pension is, don’t care about it. It’s free money. Do something. So, for example, my old job, there were two different pension schemes, one where the employer would contribute 7 per cent, one where the employer would contribute 3 per cent.

You had to sign a form to get extra money but many people didn’t bother. So look out for free money. It is really nice. Contribute as much as you can, because if you contribute in a salary sacrifice scheme, what happens is your employer takes money out of your pay cheque before you get paid before you get taxed. It’s free money, it goes into a pension pot. If you haven’t seen it, I guarantee you won’t miss it. And some more - some people earn money teaching code, maybe freelance projects. You need to make sure that your contract doesn’t prohibit this, or have your employer sign a letter. A lot of people like to spend their weekends teaching code, it’s a nice thing to do, and you can save or invest that money because you actually don’t need it. You can get a pay rise. Save that. You don’t need the money. Guaranteed, almost. So, I forgot when I wrote this slide that we were going to be in Monzo, so I said have you heard of this bank account called Monzo? If you haven’t, that’s impressive. Monzo’s a bank account, and they give you fantastic information about how you spend, you get immediate alerts with your purchases, which is really good, because if someone uses your card to buy something fraudulent, you’ll know about it right away. Also it means I have never tracked my credit card statements at the end of the month. That sounds incredibly dull, but with Monzo and Starling, another bank account, you get immediate alerts, it’s all on your phone. You do it as you go. No end of the month sitting there with a credit card statement.

Also, check out for ISAs, they’re a really cool savings account where you don’t have to pay tax on the interest. The interest rates are terrible, so you won’t make any money, but they’re a handy place. If you want to buy a home, or have an investment account, there are different types of ISAs for that. Check with your bank. Credit cards. Get a credit card and charge an affordable amount each month. When I went and got a credit card after I got my developer job, they offered me one with a credit limit of almost £5,000. There’s no way I could pay that off in a month, the advice of the person that my bank was to get it lowered, so I rang them up as soon as I got the card and said lower it to £1,000 because it’s too easily to go to Tiger and accidentally buy all of the candles and accidentally have a £5,000 credit card bill. At least you won’t have to pay for electricity because your house will be heated by candles! [Laughter]. Get free credit records from Equifax and Experian. You can check your credit reports and see how you’re coining. They are important if you want to buy a house, a car, or get a loan for something else. This is what banks look at to see if you’re reliable. Now is the time to start building up a good credit history. Finally, cyber security. It’s not something people talk about very often, but it’s really important. You don’t want your bank account to be hacked, obviously. Other accounts too contain - get a password manager. It can store payment info, so when you’re shopping on the train or candles - yeah, we’ve all been there! Shopping online on the train for very essential things, not candles, you can automatically have your card put in, and you don’t have to type it out. It reduces the security risk. Get one of those. And also, just check your credit and debit cards because they’ll have different protections.

If you’re paying online, some will protect against fraudulent uses and others won’t. Know what happens. The main thing is, know what is going on. Understand your beliefs about money, and be kind to yourself, and speak with friends and family, and trusted people about it. Because you’ll find that the answers are really interesting, you’ll gain trust, and that’s all really useful. So, that is almost it from me. Thanks to all of you for coming. Thanks for the hosting and the bank where we are. Tweet me as well! If you try any of the things in this talk, do let me know. I’ll be very curious. I’m going to close with a final movement of my sonata that I wrote. It’s about my journey from being in the music world to being in the tech world.

Thank you very much. [Cheering and Applause].

Pic of Paula Muldoon

Paula Muldoon learned to code at Makers after an international career as a violinist and is now a JavaScript Developer at Cambridge Cognition.

@FiddlersCode
Sketchnote of talk Sketchnote by Drawnalism Picture of talk Photo by Paul Clarke Picture of talk Photo by Paul Clarke Picture of talk Photo by Paul Clarke