“My partner doesn’t know I’m in this amount of debt (he knows I’m in some but has never asked me how much) and I can’t tell him because I have a track record of being awful with money.”
This Vault listener is nearly 35, self-employed, with two boys aged five and one. Her debt started at £33,000 and she’s got it down to £27,000 using the snowball method, working evenings and weekends around a baby who still doesn’t sleep. She hopes the debt will be gone in eighteen months. That’s £6,000 cleared on part-time hours with a one-year-old, which is no mean feat!
“Would it be best to pay off all my debts before I start putting money into a pension? Or am I wasting more years with no pension?”
Start with £1,000
She asked if debt or pension comes first, and the honest answer is that there’s something that comes before both. She didn’t mention an emergency fund, and without one, she’s likely to use the credit card again if sh*t happens i.e. broken washing machine, a hole in the school shoes, or a last-minute cab. So the first goal is a mini emergency fund of one month’s expenses (step two of the Survive stage of the Playbook). Having this means you don’t need to lean on credit for those little emergencies.
Nobody is auto-enrolling you
If you’re employed, your company will contribute to your pension. If you’re self-employed, nobody does it for you, which is why so many self-employed women reach their thirties without one.
You need to mimic what an employer would do for you. Open a SIPP with a simple online provider, check it’s FCA regulated, pick a percentage and start. The half-your-age rule gives you a target, but the figure matters less than starting. Then treat it like a bill: a direct debit you never think about, or a transfer each month when you set money aside for tax.
The pension your family owes you
This wasn’t part of her question, but it’s an important point. She’s part-time and self-employed because she does the childcare, and that decision has cost her the employer contributions a full-time job would have given her.
So her pension isn’t a nice-to-have she funds from her own money. The household made that important decision together, therefore should be paying into it, like a business would an employee.
If you’re not married, get a will
She says partner, not husband. If he died tomorrow without a will, the children would inherit the house and she wouldn’t – unmarried couples don’t get the rights people assume they do. Check the wills, and check who the life insurance pays out to.
The conversation you’re scared of
Flip it round. If your partner said to you, “I’ve been embarrassed about this, I’ve already cleared six grand and here’s my plan” – you’d be fine. You’d probably be proud of them.
All the income going into one budget is also what stops the overspending, because everything gets accounted for. Treat money still exists, you just name the number: £200 a month for me, and I’m not telling you what it’s on. Then it isn’t him covering the mortgage, it’s both of you covering the mortgage, and you’re not a lodger in your own house.
Tackled together, 18 months could be nine.
Have you ever kept a money secret in your relationship?
Did you tell them in the end – and was it as bad as you thought? Tell us in the Financielle app community, or send your dilemma to thevault@financielle.com.
This content is for general information only and does not constitute financial advice. If you need advice tailored to your personal circumstances, please speak to an authorised financial adviser.