We asked 20-something year old Barbie some money and finance questions and then we asked her again at 30 something and at 60 something – see how her attitude and answers change as she ages.
Question 1 – What is money for Barbie?
- 20’s Barbie said – Parties, clothes and gigs – driving lessons and tuition fees.
- 30’s Barbie said – Travel, fashion and image – commuting and keeping my home.
- 60’s Barbie said – Security and comfort – paying the bills and maintaining my lifestyle.
Notice how the purpose of money becomes more about security as Barbie ages: from parties, to home making to paying the bills. Money is a tool to help us live our lives, but we don’t always appreciate at the front end of lives what will matter to us later on, and the later we leave it to start building a nest egg the harder it gets.
Financial Planning tip #1 – take some time to think about how money will serve you throughout your lifetime.
Barbie’s answer, had she received financial advice from Women’s Wealth – What is money for Barbie? – “With money, you can bring your dreams to life and have all sorts of fun experiences. Money is a way of making your wishes come true, so, just like planning the perfect outfit, it’s important to learn how to handle money wisely and turn every day into an exciting adventure!”
Question 2 – How much are you saving Barbie?
- 20’s Barbie said – Mmmmm – enough to pay for holidays!
- 30’s Barbie said – I saved a load, but spent it all on a deposit for the house and then furnishing it – I also needed to decorate Ken.
- 60’s Barbie said – Nothing left to save after I have paid my bills now I am living on my pension.
The problem here is that the very first £1 you save or invest is the one that will earn you the most, and most of us leave it well into our 40s before we get round to worrying about creating security for our future. If we only started younger, we could create the same resources in retirement with half the investment.
Financial Planning tip #2 – start saving and investing early.
Barbie’s answer, had she received financial advice from Women’s Wealth – How much are you saving Barbie? – “I’m always mindful to make sure I set aside a portion of my earnings. The amount I save varies based on my goals and plans, but no matter what, I always make sure to set aside a portion of my resources. It’s like collecting little gems of possibility, which I can use to turn my dreams into reality and create moments that matter. So, just like curating a perfect outfit, I’m curating my financial future too!”
Question 3 – Do you have any Barbie investments?
- 20’s Barbie said – Naaaaa I have spending plans.
- 30’s Barbie said – I keep all my money in my cash savings account.
- 60’s Barbie said – I never worked out about shares and bonds and investing in the stock market – I did think about getting some shares in Mattel but I didn’t want any trouble with the taxman.
Barbie never really worked out how to invest and this cost her dearly.
Financial Planning tip #3 – if you take the last 20 years as an example you would have turned £10,000 into £16,386* in a savings account and a whopping £61,416** in an investment account. It is a very very big mistake. Learn to invest (link to How to start investing course).
Source FE Analytic to 31/12/2022 * 2.5% average annual interest rate ** 9.5% average annual return diversified global equity portfolio.
Barbie’s answer, had she received financial advice from Women’s Wealth – Do you have any Barbie investments? “Absolutely! Just like in the real world, I believe in making smart financial choices. I have investments that help my money grow over time. It’s like nurturing a garden of financial growth, where, with my best financial friend at Women’s Wealth, I carefully choose where to plant my resources. By investing, I’m not only ensuring a stable and exciting future with even more fabulous adventures and experiences, but I’m also able to support causes and projects that are important to me.”
Question 4 – What is a pension for Barbie?
- 20’s Barbie said – No idea – it’s for old people isn’t it?
- 30’s Barbie said – I know they take it out of my wages, but I have had more than 150 jobs, it is hard to keep track of them all.
- 60’s Barbie said – It is the thing I should have paid more attention to because it is what pays the bills and keeps me safe, but because I neglected it, I can barely afford my fillers and botox, and there is also the extortionate cost of travel insurance now I have so many pre-existing conditions.
Most of us lack interest in our pension and lose track of them as we change jobs, we don’t really know what it is invested in. Your pension is likely to be the most valuable asset we will ever own and neglect can cost tens of thousands of pounds over your lifetime.
Financial Planning tip #4 – Get to know and love your pension right from your very first job and avoid expensive mistakes.
Barbie’s answer, had she received financial advice from Women’s Wealth – What is a pension for Barbie? “Ah, a pension is like a cosy blanket for your future. It’s like a gift to your future self! When you retire, a pension provides you with a regular income so you can continue to enjoy life and pursue your passions. It’s a way to make sure you’re taken care of even after your career adventures are over. Just like planning the perfect party, planning for a pension ensures that you have a wonderful time and can enjoy your life and dreams even after retirement.”
Question 5 – Barbie’s dream house – how did you buy it?
- 20’s Barbie said – I dream about it all the time – Malibu beach with a gorgeous blond lifeguard providing for me.
- 30’s Barbie said – Beach doesn’t earn much, so I put all my savings into the house. It is a bit of a stretch, but it is all mine, and I decorate it how I like.
- 60’s Barbie said – The dream house was fine but floating off 4 stories got trickier, so I have downsized to a single storey and used the equity I released to subsidise my rather meagre pension and investments.
We tend to pile a lot of wealth into property ownership and many of us will need to release equity to fund retirement if we haven’t created other reserves as well.
Financial Planning tip #5 – Long term planning can help you make the most of resources throughout your lifetime and blindly following a plan to get a bigger house and clear the mortgage isn’t always the most sensible approach – no matter what your parents tell you!
Barbie’s answer, had she received financial advice from Women’s Wealth – Barbie’s dream house – how did you buy it? “Just like in real life, I worked hard, saved up, and made smart financial decisions to buy my dream house. I set goals, managed my expenses wisely, and saved a portion of my income over time. I also explored various financial options, like mortgages, to find the best fit for my situation. It’s a bit like planning a big event – you carefully choose every detail to make it perfect. With determination, patience, and smart financial planning, I was able to turn my dream of having a fabulous house into a reality!”
