The Truth About Money (Why Most People Get It Wrong) | Abi Foster LIVE at Advertising Week Europe

0:05Abi Foster:Hi, everyone. Welcome to Wish I Knew, which is the podcast where we talk about how to build a life and career that you truly, truly love. I'm your host, Emily Trinouth, and today's episode is something that's a little bit different, but very, very special. It's our first ever live recording of the podcast here at Advertising Week Europe. And we're going to be talking about an incredibly important topic, money. It's something that shapes every part of our lives and our careers, yet so many of us are still figuring it out and not knowing if we're doing it right or wrong. And I personally feel like I need to learn a lot about money, so I could not think of anyone better to join me today.

0:50Abi Foster:We have Abby Foster, who is a chartered accountant. She's the author of The Money Manual, founder of Elente, and a finance creator who's built a community of over 325 ,000 people who come to listen to her and talk to her about money. She's also worked with a load of brilliant brands and institutions like HMRC, 10 Downing Street, the Bank of England, and many, many more, which we'll get into. And if you're new to Wish I Knew, please check us out on Spotify, YouTube, and wherever you listen to your podcasts. So let's get into it. Welcome, Abby. Thank you. Now, I feel like this is one of those topics that everyone thinks about but rarely speaks about out loud, especially in the UK.

1:34Abi Foster:You've built this massive community who come to you to talk about money. Why do you think it's so hard for people to talk about? Oh, it's so easy because finance isn't taught at school. So we don't, unless we have parents that are talking about it at home, it's just not a subject that's going to come up again and again throughout our childhood. and there are formative years. And so if we're not talking about it in our formative years, chances are once we get to 18 plus, we just solidify that we're not good with money. It's not that we're not good. It's just that we weren't taught about it. And I think that is probably the sole reason that people often will say, oh, I'm just terrible with it.

2:09I'm like, no, you just weren't taught about it,

2:10Abi Foster:which is fair. Absolutely. And we're actually going to do a little bit of audience participation now. Can we get a quick show of hands? Who here looks at their payslip every single month? oh yes it's actually quite positive we love that definitely a no on that front um you talk about this quite a lot the fact that most people don't really look at their their pace it very much what do you think is the reason for that and what would surprise them if they do oh because it's so boring you know it's not being funny but it's not the most exciting of articles that we get and so and also it's something again we weren't taught about and so therefore we don't really know what we're looking at when we look at it and if I was to say I've three things if you look at your pay slip three things I would kind of pull out would be one your tax code um I'm sorry if you have watched any of my videos before chance you've heard me say the word tax code before um I basically harp on about it so you have um in the UK we have a tax code it's like four roughly it's a bunch of numbers and a letter and the numbers refer to something called your personal allowance so how much income you earn before you start paying tax and the letter often refers to something like whether you are a basic rate taxpayer higher rate taxpayer or you like pay tax on all of your income so the standard in the UK is 1257L and that means you're getting£12 ,570 of personal allowance before you start paying tax if your tax code is not that there is a possibility might not be but there's a possibility it could be wrong and for so many young people specifically and also people in those transitionary periods if they're moving jobs or they're kind of going down in terms of working hours and things like that often end up on incorrect tax codes and then overpay tax and don't realize that unfortunately your pay slip is actually your responsibility it's not the responsibility of hr or payroll to make sure that yours is right for you and then two other things actually pension would be one making sure you're contributing as much as makes economical sense for you i appreciate sometimes and i'm really careful not to sound tone deaf when i'm like contribute more to your pension when most of us are thinking well how do I cover costs in my monthly life but if your employer is willing to contribute as well if you could look into that and see whether if you contribute more they will contribute more really good one and then thirdly hands up if you have a student loan yeah it's been a fun subject recently um I have a lot to say about it but we only have 23 minutes so I won't start but I will say one thing is check that you're on the right plan and how much loan you've got left to see basically does it still make sense to be paying off through your payslip and are you paying the right plan on your payslip because it determines which how much you pay basically that's probably my three and when it comes to money in the workplace what do you think the so if you don't have the understanding of your own finances do you feel like it affects people's ability to sort of advocate for themselves in the workplace do you mean with when it comes to like pay rises and things like this yeah I think there is a stereotype that like if you're not good with money that it goes like across the board and impacts your pay I always say when it comes to pay rises have a document called your like pay rise doc effectively and you just keep putting in there all year all of the good things that happen so if your boss sends you an email being like you did a really great job on this or you have a very easy target number that you've hit or something basically keep putting into that and then by the time your pay rise conversations come around be forward with it basically have it to hand effectively like your proof of worth and be like right these are all the things I've done so therefore I am entitled to x percent pay rise and always be aware of inflation because I think sometimes friends of mine will be like oh I had a three percent pay rise like that's cool and I'm like that's not beating inflation so actually you had a pay cut um and so always try and use things like your economic understanding and you're kind of talking working for yourself um to try and ask those pay rise without being like i deserve 10 because i deserve it you kind of need to prove and also keep an eye on like the economy as well i totally believe in that it's a business case and it's something you know based on tenure necessarily yeah and now when it comes to savings if someone wants to start getting on top of their savings what's the first thing they should do what is the first thing they should do do you know what sorry i'm going to sidestep which is check any leaks in your bank account first because having you know putting 10 pounds into your savings pot every week and then finding out five months down the line that you're also paying two Netflix accounts or two Amazon accounts or two Disney accounts.

6:52Okay. Sorry, I got that one. And is, do you know what I mean? There's a lot, there's kind of a counterproductive. So always check the leaks in your bank statements first. So going through your bank statement, not to critique yourself. I think often people don't look through them because they think it's like a judgment like session. It's not. Just have a look, check that everything coming out you get and you understand and you know makes sense for you make sure there's no like double payments there's no payments that you really don't know about because that could be fraud um and then when it comes to savings review how much you can put away as soon as you get paid um because obviously always pay yourself first because you are the most important person in your life and then making sure that you're using tax efficient savings methods so please don't just leave it in the current account you're basically letting the bank just use your money for free we don't like that secondly if you're putting it in a savings account make sort of make sure it's giving you decent interest as a bare minimum um so somewhere between three and four percent at the moment would be okay interest and then using things like isas so a junior like not junior um a adult isa cash is like it's okay you know it means that basically any interest you earn is not taxable um i would obviously advocate if you put enough away in your savings pot that you're covering your emergencies so like let's say three to six months of your essential spends I would then look to investing fast don't just keep topping up your savings because you cannot save your way to wealth

8:25Abi Foster:yeah it's just impossible um and kind of going back a little bit on the workplace I really want to focus on women and money this is a topic I'm incredibly passionate about on the podcast we talked to a lot of women as well around the changes that they've made in their lives and their pivots you talk a lot about the gender pay gap I actually watched this incredible video that you did where you demonstrated in real time what it actually means because it is so confusing and I don't think I really knew what it meant until you explained it like that so yeah explain it for everyone maybe not with your no I don't have the blocks and also the reason it always goes viral is because there's always some very angry men so if you're one of them feel free to leave um but basically and they go it doesn't exist and I go that's not true is it um so basically the gender pay gap what people confuse it with is the gender wage gap the gender wage gap is illegal in our country so if a woman is being paid less than a man for the exact same role that is illegal however the gender pay gap is not illegal and definitely still happening so when you look at a case study trying to think of so I used to work in the glossy magazine industry as an accountant nothing particularly cool but that's where I worked and what we saw is like junior roles so like interns assistants etc all the way through to c-suite you're the worst gender pay gaps are where you have a disproportionate amount of women in those junior roles and then when you get to the c-suite you have a disproportionate amount of men and that's what the gender pay gap is why are we not seeing women go from the start of their careers all the way through to the end there are some clear obvious reasons such as like the motherhood penalty we see a huge dip off between 30s and 40s of women just coming completely out of the system and when they go back in it actually pushes to honestly it's some horrific stats but it pushes their career back like 10 years even if they only take off like two or three years for their child so the gender pay gap effectively is when we're not seeing women go from intern all the way through to c-suite and why are we not because in my previous roles we had an entirely male c-suite you know where it works there was even a male editor-in-chief when I worked there male CEO male CFO but then junior roles very heavily women so that's the problem that we're seeing in this in the UK when we have a gap is that we're not seeing people progress through so it's based on averages it's based on average earnings yeah if you just average people out yeah right okay and what's the gender pension gap well that follows on from that so basically if you are statistically earning less throughout your career and for various reasons or you take career breaks um you will end up contributing less to your pension and pensions are investments and they compound and so the more you're putting in obviously the more you're going to end up with and with women what tends to happen is you see them when they come out of the workforce obviously they just stop contributing to their pensions at all and it kind of hits pause and it's very frustrating um so yeah it has a ripple effect i am aware i so i do two really annoying things on the video so one I use pink blocks for boys and blue box for girls and the internet just lost its mind as if I'd like completely confused the colors and I was like it's fine we are allowed to change um and two there's a lot of um anger around people thinking that you know it's a choice that women make it's a choice that they make to not like have the careers that they might want and someone always comes out and goes, women aren't on the front line.

11:47And I'm like, okay, all right, calm down. Like it's not like they are for one, but also two, it's not a polar thing. It's not because women aren't still on the front line with massive guns that therefore we're not entitled to be paid as much. I don't really get that element. But yeah, there's a lot of confusion around the gender pay gap and the pension gap. I personally think if we taught finance education in schools, the entire thing would be eradicated. Yeah. Like I think you would eliminate the problems that we see for women in their early careers and for men as well. Because I see a lot of vulnerable young boys.

12:19So I teach finance in schools. That's what the company Ellent does. And we teach from year one to year 13. And we see a stark problem with around 16, 17, 18 with the boys becoming kind of hands up if you watch the manosphere or know of the manosphere. Exactly. That is happening like 14, 15, 16, 17, 18. it's not the older lot that are getting as hurt by this it's that young cohort that I see and taught and teach that when I ask them you know who do you think of when I talk about finance and they mention that HS guy or whatever it's terrifying because they also have a really skewed view on finance they don't think about doing their base blocks they just think about how can I day trade and that's even more worrying than the young women that I teach that go I'm just not even going to talk about it I'm like I don't know which one's worse but if we taught finance at school we would eliminate this problem.

13:13Absolutely.

13:14Abi Foster:One thing I didn't fully appreciate before running my own business was just how much mental energy everyday decisions take. When you're spinning a lot of different plates and always thinking a few steps ahead even the small things can start to feel surprisingly draining. After leaving corporate to set up my business last year I realised if I wanted to stay focused and make good decisions consistently I needed to simplify wherever I could especially when it came to my health. When it comes to supplements though I've always really struggled with consistency mostly because I felt so overwhelmed by having to take so many different ones.

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14:56Abi Foster:And you talk a lot about the fact that money doesn't buy happiness yeah but it does buy you something else oh yeah freedom yeah I haven't we're not I won't swear um so basically I believe really heavily in the fu pot or like the fuck you pot right because money yes you know there are certain things that you will gain happiness from that money buys but obviously on the whole the rule is money doesn't buy you happiness but what it does provide you with is the freedom to say no the freedom to walk away the freedom to leave situations you're uncomfortable with even I think a lot of people think at the extreme end of like you know being in a toxic relationship for instance but actually it's also at the lower end of like being at a pub that you actually don't really want to be at anymore it's really dark you don't want to do the walk home but you're having to wait for your friends you can dip into the FU pot to get a cab home that kind of thing the freedom it provides you to be like I can control my narrative now in the next hour yeah and I think the FU pot is really important for all people really obviously I talk about it in the sense of females empowering themselves to be able to leave unhappy relationships but it goes the same for guys as well you know an FU pot kind of follows on from the emergency fund but that gives you access to say no yeah I think is is the main point I think as well and I think with the audience here today I think it's so important to talk about this in the context of work yeah and jobs and the FU pot allows you to leave any situation that you don't want to be a part of right even a company or a boss or you know or if you want to go and take a few months out you've got that ability to do that and I've definitely been in that corporate trap before where I felt like I couldn't do that because I hadn't prepared for it yeah I was um my last job before I started Ellen because I had a really weird creator journey but I started Ellen four years ago and I the only reason I was able to do that is because I had an FU pot I had a saving like a load of savings that will not load I had savings to like look after me for six months so that I could discover what I wanted to do because basically I was an accountant I am an accountant but then I looked at my boss who was like the senior finance manager and then her boss was the CFO and I was like I don't want to do that that looks really boring um and so I was like what can I do next and so I basically left my parents were fuming my parents have never not worked in their lives they're like a hairdresser and a builder and the idea of me not working was like just not acceptable but I had this money and I was I'm just gonna figure it out and then I'll come back and like if I don't make it work in six months I'll just go back and they were like fine it's on you um and thankfully thankfully I made it work and you often do because when you have that like time stamp as well you're like oh it's gotta work or I've got to go back.

17:51The idea of going back was like not okay for me. But yeah, I think I just, I want to say I got lucky, but obviously if you work really hard,

18:00Abi Foster:you end up quite lucky. And this is a really good segue because in the context of Advertising Week and also sort of my career, my background, we talk about creators a lot. Creators are becoming such a huge part of everything that advertisers and marketers are planning and spending their budgets on. so I'm really fascinated by your journey and also you as a creator I think I saw you referred to as a finfluencer somewhere I thought god that's quite an old school term yeah um so a personal finance creator yeah how did you actually start like building such a big community oh I completely fell into it so basically and that's really annoying sorry I'm going to correct that I didn't fall into it I worked really hard and then stumbled um so I basically started element four years ago that taught finance in schools if you've ever worked with a school in your life you'll know they have bugger all money none and so I was like this isn't going to work because I haven't got enough money to keep going and keep scaling so I started social media to like market the business and I realized there was a huge lack of female representation in terms of like people talking about money and so we're basically and also there was this like weird gap of like no one everyone was talking about money mindset and you know three ways to save on your shop at waitrose I don't know um but that no one was going here's how a payslip works and explaining it and so I did a video on payslips about so I started three years ago just when reels were like starting to become a real thing and I put um money behind filming with like a proper camera making it basically look a bit like a podcast and I recorded a bunch of content on like payslips and one of them just hit the sweet spot of the algorithm and went and I went from having like 3 ,000 followers that taken me like six months maybe of like hard work on to suddenly I had 40 ,000 within the space of a month oh my god and I became that kind of finance girl with the hair like that was it like no one knew my name they just knew that I talked about finance and then it grew from there so yeah I would say I never planned to be a finance content creator but I just have I'm obsessed with teaching finance and I think if you can teach finance to a year one which is like five six years old you can teach it on the internet um so I yeah I kind of sort of stumbled slash put effort in behind it and then I've just been working out like how can I make myself different to everyone else out there ever a sense basically i think it's so important as well to have people like you teaching the younger generation of girls and women that can look up to you and say oh well i should you know if someone like me can understand this sort of stuff or this person doesn't feel too far away from me or like my mom and dad's age you know so i think it's actually bringing that younger generation closer to where this information should be so it's really important yeah the boys are the same as well like I was at a JP Morgan symposium over the last few weeks and you can imagine the people in the room there um I was the youngest by a long way um and very much one of the only women in that room and they were all talking they were on the stage going on for ages being like we don't know how to get to the next generation and I'm like well look at you you're all like you're running these massive like CEOs of all these big companies like pensions and banks and I'm like and your board is full of old white men like how are you gonna like get to the next generation whereas at least the next generation if they see someone that's nearer their age sadly not that close but I'm near um they start to feel represented and feel like they can speak up yeah whereas at the moment the biggest problem is they just don't they don't trust the system they don't feel represented and then it creates this ripple effect and it's just really dangerous I think for the next generation and so that's technically I would assume why a lot of these organizations you know governing bodies are partnering with you right yeah you've worked with hmrc downing street the bank of england um you can probably list off way more than that as well um how do you find those partnerships have kind of come about in terms of what the objective is i've seen lots of videos of you with keir starmer for example yeah um like i guess did you plan for that or you know how did that kind of come about yeah none of nothing i do is by accident like nothing i do everything I also don't wake up looking like this do you know what I mean like I don't stumble out of bed with a fresh blow dry and a full phase of makeup like I wish I did um everything I do is on purpose and what I did three years ago when I got this viral video I was like right this is my shot where do I want to be seen like what do I who do I want to work with because at the time there were finance creators doing loads of ads they were doing ads with banks and building societies and stuff and I was like I want to go to HMRC I know bit lame but I did I was like fangirling because I'm an accountant you know I spend a lot of time talking to them and so I DM them on Instagram and I was just really brutal I actually scrolled back the other day and screenshotted it but I don't know if I'll ever release that because it's kind of mean but I basically went your Instagram sucks please can I help you and I got like a very quick response being like ha ha ha like because obviously it's a real person behind their account being like ha ha that's very brutal here's our email let's talk and it took me six months with them to get them to convince them that like we should do some videos together and I was like I can teach people about tax codes about national insurance and things with you as the background and therefore you get like you get visibility I get visibility working with you and then they so I've now partnered with them for lots of things and I was in HMRC walking through the halls like an absolute legend and no don't worry it's not very exciting inside but I felt cool when I was there and someone from Downing Street happened to walk past and be like what is she doing and I was oh I'm doing Instagram videos they at the time didn't do anything like this now everyone has probably seen Downing Street but at the time and they weren't, and Rishi was still holding on those last few months, and he was like, and they said, do you wanna do some content with Downing Street?

24:10I was like, yes. And then started, we turned up, so it was me and a couple of other creators, turned up to interview him, and that video went viral for all the wrong reasons. I, just putting context, was wearing a full pink corduroy tracksuit, not tracksuit, suit. So I thought I was gonna be the main show. Rishi Sunak turned up in Sambas you know alias Sambas and the internet just lost its mind um and the video went I thought people there was a lot of hate for it and like people like how are you talking to him and I was like well because we need to ask him we need to hold these government officials accountable like that's what they're there for like they speak to Sky News and BBC why are they not speaking to social media um but yeah the video went viral and then they started to believe more in social and then it gave me the ability to go to like the Bank of England the united nations all of the institutions where i'm like you need to be speaking to the next generation because they don't trust you and the next generation i'm sorry to say if you are from the financial times but they're not reading the financial times they're not reading bloomberg they're probably not even reading the bbc anymore and as much as i think there's a real place for traditional media i do it i do radio i do bbc and all that there is you're missing out on the next generation if you are not talking to them through social media and so that's what my whole sell was to them was like don't miss out on your next millions millions and millions of voters because

25:30Abi Foster:you think you're too good for social media um or you don't know how to do it or you well yeah and they still don't really it's taking it yeah it's hard but it's um we'll get there eventually and i think it's and what i love is i feel like i open the door for so many other creators and so many other people to be able to do this as well because i don't mean to blow my own trumpet at all i will not the reason but I was the one that went to HMRC and now they work with loads of people which is amazing and so they should um because and also I'm a big advocate of them working with a diverse group of people not just finance creators not just you know whatever um it's really important that we do these things and we be brave in our spaces I'm sure there's so many of you in this room that are in a specific specific niche it's important you're brave not just for you but for the people coming up behind you as well um it's really important so important and um i think your point around the younger generation is so true i'm sure everyone will agree with it i think there's a stat don't quote me on this but it's something like 73 percent of gen z get their news from tiktok yeah which is true yeah which is fine yeah like it's not bad there are some good people on tiktok i'm on tiktok um it's just that there is an also a huge amount of people that can be really dangerous if they're not if they don't have your best interest interest at heart absolutely i feel like that's a whole nother conversation um that we can talk about later but um okay perfect and then i've just realized the time actually god that's gone so quickly um quickfire what's the worst piece of financial advice you've ever heard oh you can save your way to wealth you can't like you yes have savings have emergency fund port but please don't sleep on future you don't sleep on your investments don't sleep on your pension love that um what do you wish someone had told you about money sooner oh money specifically what do I wish someone had told me when I was younger um that my future doesn't have to look like my parents I think we still live in a society where I feel like a failure because I don't own a house um I'm not being funny my parents have never interviewed the prime minister um and i still tell them that no um but i still feel like i failed because i don't own a house because right now owning a house is so ridiculous like it's so there's just so many limits on it um so yeah i just wish someone had said to me like you to be successful doesn't mean you have to look like what your parents have done um or what you know or what society did they were able to buy houses for like 10 pounds That's just not happening now.

28:09Abi Foster:No. And also, I said this the other day on LBC and my parents were listening. But I'm going to say it anyway because I've said it now. We need them all to shift out because they're all living, all of the older people are living in these massive houses and they're not shifting out to create room for the next generation to move. And that's, yeah, so that's a whole other conversation. But, yeah, it's not our fault that buying a house has become so difficult. Do you think it's a smart investment? it's not do you know what it makes sense for so many people but it also we're moving into a generation where it doesn't always make sense if you are someone that wants a digital nomadic lifestyle you want to move here there and everywhere you don't know if you want to even live in the city in a few years time buying a house may not be a financially sound investment but if you want stability you know you're going to live somewhere for five plus years then yeah if that's what you want.

29:03Abi Foster:It's just so hard for this generation. I think especially the fact that so many people can't buy a loan means that it's such a big decision that you have to make with someone else, whether that be a partner or a friend. Yeah. And you hear all these horror stories of like people who've bought with their friends and then they can't sell it like years later. Or boyfriends. Yeah. There we go. It's fun. There we go. That's a whole nother conversation and we haven't got time for. But Abby, thank you so much for sharing your gems. You have been absolutely brilliant.

29:35Thank you.