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I’m an investment manager and here’s how I spend my money

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Quilter’s David Henry spends his time telling people easy methods to save and spend their money – so where does he spend his own money?

Throughout the cost of living crisis, lots of us have grow to be experts on how best to scrimp and save to get by.

In terms of getting the very best out of your salary and savings, you would possibly think those within the financial industry have a greater understanding.

David Henry, investment manager at Quilter, recently told us about how he invests in money, but how about where he actually spends it?

He talks to This Is Money about his biggest vices, whether cancelling Netflix is a brilliant move, and the way useful budgeting really is.

My vices are football and effective dining

Henry’s biggest fixed monthly cost is, unsurprisingly, his mortgage, followed by contributions to his Isa and savings accounts.

While he might prioritise his financial health and saving for retirement, Henry isn’t any stranger to spending his money on things he enjoys.

‘I like going out for nice dinners, happening holidays. I like my football… I have been to some extraordinary parts of Eastern Europe seeing Northern Ireland play. I’ve got a season ticket for my local football club.

‘I’m not an enormous automotive guy, I’m not an enormous watch guy, I’m not an enormous clothes guy. It’s just experiences and having the ability to go away and do things. That might be my priority.’

Henry, who says he’s ‘clinging on to being a millennial by my fingertips’, thinks spending on experiences is more a private preference than a generational divide.

The ‘nice to haves’ are inherently personal, Henry says, and the very fact he’s an investment manager has little to do along with his approach to spending money.

‘I feel there’s this concept that perhaps people within the finance industry are robots and have these items really worked out. That is just patently not the case. We’re all human beings… none of us have gotten it completely 100 per cent worked out.’

‘Ultimately I feel not only is it unhelpful to make feel bad about spending money, it’s actually a bit pointless.’

Good versus bad spending

While Henry might think it’s unhelpful, he admits he’s recently been feeling guilty about some recent purchases.

‘Over the past couple of weeks I’ve spent, for me, quite quite a lot of money. I used to be desirous about it and beating myself up just a little bit, but then I went through and categorised what I’d spent it on and there have been two predominant outgoings.

 Not only is it unhelpful to make feel bad about spending money, it’s actually a bit pointless.

‘I have been doing up the spare room… and I’m doing a recent qualification so I’ve purchased the course for that. [But] I’d categorise that nearly as good spending – with the primary you are investing in an asset, and with the second you are investing in yourself, and hopefully your future earnings potential.

‘I feel there must be a categorisation between good and bad spending. Loads of us spend money in bad ways as well occasionally, but so long as you regulate it, don’t beat yourself up an excessive amount of.’

A useful reminder for Henry is that he sees plenty of people that have been disciplined with their spending, ‘but accumulation for the sake of it’s a fairly miserable solution to exist.

‘Sometimes you will see someone who has done the entire difficult stuff – saved, invested, come to the stage of retirement and do not necessarily know what they wish to spend their money on, or who do not feel comfortable going and spending money.’

There are some who take this to a recent extreme by subscribing to the Financial Independence, Retire Early (FIRE) movement.

Those seeking to achieve FIRE will maximise their savings as much as possible, by decreasing their expenses as much as possible, alongside investing aggressively.

‘That is effective and that is good for them, but for most individuals in the actual world that is not going to be achievable,’ says Henry. ‘Living a life where you are only spending thrifty amounts of cash on a regular basis is a fairly miserable existence.’

Keeping tabs: Henry says he has a budget to keep on top of his income and outgoings - but it isn't particularly sophisticated

Keeping tabs: Henry says he has a budget to maintain on top of his income and outgoings – however it is not particularly sophisticated 

How useful is budgeting? 

Henry admits he’s ‘a little bit of a spender’ so he takes steps to mitigate the worst of this by budgeting weekly.

He admits his budget isn’t particularly sophisticated, and has made a basic spreadsheet that shows what’s coming in, his outgoings and that is broken down as a weekly budget.

Someone could have to tear my Netflix subscription from my cold, dead hands

‘I spend every thing that I can on an Amex card to get points, after which at the tip of the week I pay it off. You possibly can do it every month, but I like to have a look at things on per week by week basis to envision where I’m at.

‘I can assure you that it is not a sophisticated spreadsheet. It’s embarrassingly easy. And I’m not breaking down any expenditure, like I spent x amount on food. I’m just attempting to regulate that at a top down level.

‘There are a great deal of really good budgeting tools that categorise your spending and people could be helpful, but personally in the mean time I do not try this.’

Don’t cancel your Netflix – it won’t make a difference

Greater than ever, we’re counting our pennies and searching at our outgoings through a microscopic lens.

You would possibly have modified your phone contract to a less expensive tariff, or perhaps you’ve got slimmed down the variety of subscriptions you may have.

Henry thinks there could be very little point to cancelling your Netflix or forgoing the avocados in your food shop, though.

‘Should you take a look at quite a lot of people’s financial situations, they improved markedly during Covid. It was the primary recession where the quantity people saved went up. In that situation I’d infer Netflix is not the issue. The issue goes out and spending money.’

Henry says you would need to rip his Netflix subscription ‘from his cold dead hands’, not simply because he loves an evening on the sofa, but because there’s little or no point.

‘While you take a look at what has a serious impact in your financial position, it is not necessarily the outgoings, unless you’ve a wild spending problem… 

‘Actually the solution to improve your financial position materially is by earning more cash, whether that is through generating as passive income, whether that is investing in yourself and your skills, and having the ability to earn more by the use of an income.’

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