65. Davinia Tomlinson Discovers The Money Secret Sauce
This week I speak to Davinia Tomlinson, founder of rainchq, which helps women take control of their money.
Born and raised in Birmingham, during her formative years Davinia benefited from a strong female financial role model, in the form of her Windrush generation Caribbean grandmother.
Davinia’s early career in the investment management sector involved a close shave with debt, with overdrafts and credit cards enabling her to keep up with high spending colleagues. However, she quickly realised it was not the relationship with money she needed or wanted to have.
Now, via her online platform and social media, Davinia is on a mission to help women build financial resilience and sustainable wealth to live their best life.
Episode Transcript
Jason Butler 0:05
Hello, and welcome to the Real Money Stories podcast. I'm Jason Butler. And I invite you to join me as I have intimate money conversations with people from all walks of life. Whether you're just starting out on your money journey, or well down the track, there's bound to be something you can learn from these stories about taking more control of your money, so you worry less and enjoy life more. Real Money stories is sponsored by Vanguard, bringing value to 30 million investors worldwide. Visit Vanguard investor.co.uk For more details, and remember, the value of investments can go down as well as up and you may get back less than you invest in.
Hello, Jason here. Thanks for joining me on another edition of Real Money Stories. Now I've got a great interview lined up for you shortly with a wonderful lady called Davinia Tomlinson, otherwise known as raincheck on social media, lovely lady, some great insights and an ageing enjoy that because I do definitely found it really interesting to interview. But before then I just wanted to cover a couple of couple of things that might be of interest to you. One is I just want to go over the real basic foundation of financial planning good financial well being the cash reserve. And I also want to give you an insight on a book recommendation book I've just read, which is fascinating all about the new economy and artificial intelligence. So the emergency fund now, you've probably heard of it, you may well have one. And if you haven't got one, you probably know that you need one. Because we've COVID. One thing that's shown us is that there's lots of things we can't control in the world. And the idea of the emergency fund, this is a fund of money, which enables you to meet your core, your essential your absolute must have expenses. So it's not the delivery pizzas or the holidays or new cars, it's it's the things like you know, the rent, the mortgage, the food, the bill was the insurances, etc, the things that you must pay come what may. And the idea of the emergency fund is, you have an amount in there that represents a multiple or number of months worth of spending to get you through any time period. So whether that's a drop in income, or a stopping income, so you lose your job, or you get ill, or the drop in income is through, you know, cut back hours, or you're made to go part time, or some people have seen furloughed, and you only get 80% of your money. It's designed to pick up that slack or to meet unexpected expenses. So we don't mean lumpy expenses that are not monthly that come along every year, like a holiday or a car service or stuff like that. But we're talking here about the boiler breaks down, the car needs much more spending on it than a normal service, because I don't know the engine is blown up or the gearbox is broken. It's those curveballs that we know are going to happen. But we can't just can't be can't be sure when and exactly how long they're going to go on for how much they're gonna cost. So that's what the emergency fund is for. And I did a live with a guy called ck Clarence, on Instagram. And you can see that on my story, if you go and have a look at all about the emergency fund. And I couldn't believe that I was speaking for 45 minutes on this subject, I thought, well, what is there to discuss, but actually, when you think about it, there's a lot to the emergency fund. And I think it's one of those rules, simple concepts, but very few people really understand it properly. So there's just a run through of a couple of insights that I shared that night, that rule. So we're all clear what the emergency fund is for. And you can just check that with how you understand it, and how you're doing. So the emergency fund, as I've explained is for emergencies, not for smoothing out lumpy, regular expenditure that you've got to incur, or you want to incur it, it should be held in pure cash or cash equivalent accounts. So if you're in the UK, that can include Premium Bonds, because Premium Bonds don't pay interest, but you have got a chance of winning cash prizes, and or a two 1 million pound prizes. If you're in other countries, it could be a money market fund, it could be a bank deposit account, you know, it's nice to get some interest or return but it's not really the importance of it. So don't tie up in something you can't get your hands on 123 or four months notice account that's no good, because you may need to get your hands on it short notice. So it's it's more insurance than anything else. It's not an investment doesn't matter if you don't get an investment return inflation doesn't really affect you because it's just got to sit there for emergencies. Think of it as that that glass thing in case of emergencies break here.
The second thing is the amount. Now, everyone is different. If you've got no emergency funding, you've still got debts and you want to try and get you know, perhaps 1000 quid together 1000 bucks 1000 euros just to get you going and because the research shows that if you have about 1000 Some pounds, dollars euros, that's probably going to stop you or certainly stop a lot of people drifting into unnecessary expensive debt. And it also breaks the reliance on debt, because then you have to get rid of your debt. And then once you've got rid of all your non mortgage debt, you can come back and fully fund that emergency fund, an emergency fund can be somewhere between three to 12 months core, what I call essential you living costs. So as I say, it's all the essentials. Now, I personally like to hold 12 months because it means I don't have to worry about cashing investments doesn't matter if, if I've got money stuck in property. If I've got money in private equity, I can ride out most storms there, and I don't have to draw on my capital. And it's just it means that I'm not resorting to debt. I'm not having overdrafts, I'm in control, it makes me feel good. But But here's the thing if you've got a very secure job in a very predictable income in your household, and that means if there's two of you that both of you got secure income and predictable income, you can probably hold three months, alright, so. But if you've got a very precarious income, or you're concerned, perhaps one of you may be stopping work soon, or there may be a reduction or there's something not looking too good about your job, or you're in a self employed position where your income is very variable, then you may actually want to have a bigger emergency fund just to give you that comfort, but you know, three to six months will do most people. And here's the thing, it's a multiple of the core living costs. So the higher your living costs, your core living costs, then the more you're going to need to hold, I have very low living costs. So I don't actually have to hold, you know, the actual amount I need to spend each month core living cost is quite low relative to other people I know. So I need to actually have 12 months for me, it's probably like six months. So some people are very high, expensive lifestyle you with me. So that's it. And the third thing to think about with the emergency fund is it is just for emergencies, but when you use it, you can draw on it, don't worry, it's not like cutting your arm off, it's okay to spend it on the emergency as long as it's a proper emergency. But here's the thing, as soon as you do that, your early warning signal is my emergency fund has dropped below its target level, my whole focus has to be to get that emergency fund back to the optimum amount. And even if that means you've got to really trim your costs for a bit or earn extra income by working overtime, or whatever it is, or sell stuff off. That's what you've got to do. So whether you're just starting out building it, whether you got to replenish it, your emergency fund is your is your canary in the coal mine, it's your little thing that gives you the comfort that you can weather the storm. And it really does just remove lots of friction in relationships, worry, stress and concern. And you know, you don't have to have lots of wealth to feel secure if you've got an emergency fund. So do check that out on Instagram on my Instagram account at JB the wealth men and you can watch that on igtv, which is really good 45 minutes. And they seem to love it all the people. So check that one out.
And the book recommendation. So let's interesting book, Roger Bhutto, if you haven't heard of him, he's a very, very well known and extremely experienced economist, who started a company called capital economics many years ago, but you still weren't part of. And he's written several books. And I really do rate him. He's in his 60s been around a long time very smart guy. And he's written a book called The AI economy, wealth, work and welfare in the robot age. And he's a winner of the Wolfson economic prize. So the guys are smart cookie. And you've probably heard lots of stuff that we're all going to be unemployed and artificial intelligence and robots gonna take over the world. And what Roger does is he, he really takes this apart, and it goes right back to the beginning of the Industrial Revolution. And he looks at lots of parallels, and he wants to see is it different this time. And he makes some very interesting observations. And it's really worth reading, I mean, I would recommend, buy it, read the prologue, then read the conclusion, then start reading each of the chapters, because that will really motivate you to want to really get into it. It's quite small text and, and it's quite a read. So it's about 300 pages of quite tight text, like Bible text. But so that's more like a 450 page sort of normal size book, but well worth reading. And here's a couple of insights for you. He said, there are many areas where humans possess an absolute advantage over robots and AI, including manual dexterity, emotional intelligence, creativity, flexibility, and most importantly, humanity. These qualities will ensure that in the AI economy, there will be a plethora of jobs for humans. But what he also makes the point is that AI and robot robotics can do some quite advanced things quite well. In fact, better than humans, and like playing chess, etc, because it's brute force of computing power. But they can't do very simple things like you know, tie a shoelace or tie a tie or do you know sort of personal hygiene, they find that very difficult and it's going to be a long, long time because robots and AI driven robots can be able to do that. But it's an interesting book, I think AI or the economy, you're you're placing your ability to earn money, your ability of your children, grandchildren to earn a living, are going to change. Some things won't change. I don't know if anyone's lives in a rural area, like I do, but the delivery drivers are always finding it difficult to find where we are. So God knows how a drone or AI driven robots gonna find us to deliver packages, God Helton, but it is an interesting read, and it will give you a lot of perspective, and it will help you I think, understand the trends and where the both the challenges and the opportunities for the world of work are. So I think the conclusion is that humans have got plenty going for them. But they will have to, as they have in the past have to adapt, pivot, and innovate, to stay relevant and to say, make sure that you can develop your your own value and deliver value and, and earn a good living. So interesting, very interesting. In fact, I should just mention on AI, a friend of my daughter who is an AI expert, before the last lockdown. He, he she basically gave me access to Google's. He's one of the handful of people who have access to Google's deep AI capability. And he lets me play around with it and do a, you know, have an interaction with an AI system. And I basically asked it loads of personal finance questions. And what it does is it learns from the phraseology, and what I'm saying, and then it goes out to the internet and does all its research and comes back. And it was actually quite interesting. We made a few errors and a few schoolboy errors. But on the whole, I was quite impressed how a system that that that really is just sort of algorithms and data and computing power could actually pull all that together. So I was impressed, but I still think AI has got a long way to go before it's going to make us all redundant. And the jobs that we do lose will probably be replaced by other jobs that we can't even think of at the moment. So there we go. That's the AI economy by Roger Bhutto. Well worth reading. They're good. Okay, well, let's get into this week's interview with Davina Tomlinson. Hello, thanks for joining us today on another edition of real money stories. And this week I'm talking to Davina Tomlinson. Hello, Davina.
Davinia Tomlinson 12:22
Hi, thank you for having me.
Jason Butler 12:24
Hi. Now you're known as something else on Instagram, aren't you? You've got an alter ego. Do you want to tell everyone who that is? And what that is?
Davinia Tomlinson 12:32
Yes. So I'm doing it in my daily life. But I'm raincheck on Instagram.
Jason Butler 12:37
Yes. And you are a bit of a you're quite prolific on there, aren't you? I mean, I don't know how you managed to fit everything else in your life. My daughter manages my social channels. And she said to me, she brought you to my attention. So this lady is very prolific. And I like her style. So So you must be doing something right. So before we move on, though, what do you do do that full time? Or do you do something else in your in your sort of day job as it were? Or how do you balance your daily activities?
Davinia Tomlinson 13:04
yet? No. So rain check. So obviously, we have our social media presence. But actually, the real activity of rain check exists offline. So it's a business that I set up two years ago. And it's designed to help women take control of their financial futures. So we run a membership platform, offering financial education and access to qualified and regulated financial advice.
Jason Butler 13:25
Hmm, good. So does that mean you're a financial advisor, or you've got links to regulated financial advisors?
Davinia Tomlinson 13:32
We have links to them. So my background is in the investment management industry. And so, you know, the the idea for rainbow was spawned by or spawned from my experience, over the course of my career and recognizing that women just weren't having deep enough conversations about their money, and were generally being excluded by the industry. So raincheck is my response to that?
Jason Butler 13:53
Well, as a father of two daughters are 21 and 16. I'm very alive to that issue. And I always say to them, a man is not a plan. So preaching to the converted. And we'll get to what, you know, we'll come back to that in a minute. But I'm really interested to know, really the journey that got you inspired to start up rain checking the perceived gap that you fell all the robber deficiency that women had around finances? So take us back to I mean, where did you grow up? I mean, what was it like growing up where, you know, in terms of finances and lifestyle?
Davinia Tomlinson 14:24
Yeah. So I come from a Caribbean background, but I grew up I was born and raised in Birmingham, in a very traditional kind of nuclear but but ultimately, extended family, so very used to, you know, having lots of people around all the time. And money was something I have to say that wasn't necessarily talked about really in the family. I think my relationship with money really grew from observing my grandmother in particular. So when I think about, you know, my parents and how they interacted with money, it wasn't really talked about, you know, I know, you know, for certain that my mom was the woman that held the purse strings in the house. And you know, my dad would go out to work. And my mom, you know, was also working as well. But my dad would effectively hand the money over to my mom, and she would manage all of the household bills. I mean, that was how it worked in my household. But outside of that, I never really saw any conversations about money outside the odd bit of friction or tension when reserves were running low. But I think in terms of, you know, cultivating a healthy relationship with money, which is, you know, I think, saw me through to where I am today, it was through, you know, observing my grandmother who Windrush generation lady, moved to the UK, from the Caribbean, in the 60s, and, you know, essentially was able to build financial resilience and financial stability, through working in quite manual level roles. But she was the first person I knew in my life to have a financial advisor. She was very, very good with money management, she was very wary of debt. And I think, you know, some of the principles of I think good financial resilience were planted in my mind quite early on as a result of my relationship with her.
Jason Butler 16:01
I'm always fascinated to speak to second third generation immigrants to the country because they have a very different perspective. Because if you think about it, your grandmother must be I don't know, she's still with us. But what an incredible individual to come all that way to a foreign country with very little Yeah. And she just had to get on a start at the bottom and work our way out. Right. So what did you learn from her? What were the principles that your grandmother you mentioned about she was aversion to debt? So you're already you're already on my side here, right. We're the anti debt family, the Butler's So tell me, tell me what you learn from her in those early years that really formulated your relationship with money.
Davinia Tomlinson 16:42
I think there is something about being resource so and you know, of course, exactly as you've described, do, you know, immigrants to the country, you wouldn't really have had access to, you certainly couldn't have gone into a bank and got a loan very easily, you know, if you know, they had to, they were in communal living spaces, and they had to support one another. And I think there's very, there's something about that principle, that idea of supporting one another financially, which has really stayed with me. And you know, when I think about Ranger in the community that I'm building very slowly, that's one of the principles that I think really makes a difference to how people can uplift one another. When it comes to them, you know, whether it's their financial well being, or all other aspects of wellness, really, there's something certainly something about that partner hand, which I'm not sure whether it's something that you're familiar with. But again, this is a tradition that you know, is from the Caribbean, I know that there are other countries that have similar things in West Africa, they have Susu. But essentially, it's this idea where everybody will contribute some money into a pot, and then it's almost rotated around. So when it's your turn to scoop up the collective amount of money that everybody has contributed towards, you can then use that to build some financial stability and foundations for yourself. And for lots of people of that generation, it would have been the basis upon which they were able to buy homes. You know, lots of those generations have quite big families. So my grandparents had five children, once their grandparents had five children, another set had six children. So when you're having to feed, clothe, and house, you know, these quite significant families, you know, you really need that support, and anything that you can do to bolster your financial resilience is really key. But you're coming back to the point about resourcefulness, you know, really thinking about budgeting, you know, you know, there's a whole industry that's kind of come out of this budgeting movement, particularly for women and there are lots of influencers online talking about different frameworks that you can use. But ultimately, when you're thinking about budgeting, all you're trying to do is make sure that you can eke out as much as you possibly can from whatever amount of money you have. And rather than feeling like it's a stick to beat yourself with and again,
Jason Butler 18:42
yeah, so I was just gonna say but I'm interested in in putting all that aside that the messages you got from your grandmother because this seems really important because many people in your community or might be thinking about kind of empowering themselves with their money who they haven't got those role models and I certainly didn't I mean my my mom and dad showed you every way not to run the finances Okay, so I suppose in a way that was good, but but you did you sit tell me to see your grandmother did she show you budget you know, did you see her budget was it was it jars above the fireplace and you know, rent, food and you know, how did she budget intentionality?
Davinia Tomlinson 19:19
I think I mean, what, quite similar to what you said about you know, what you tell your daughters about a man is not a plan. My grandma always used to say that my I've got two daughters or someone to tell that tell them that as well. My grandma always used to say to us, make sure you you know, you you save your money. So from a very early age, you know, I remember my very first saving account was set up with her I remember going to the high street and kinky in the days when we had Abby national and going and setting up you know, maybe you have a little book and you know, you could write down and she would she would show me over you know, all the all of her various saving books over the years and say this is what happens. This is how many books you know now cumulated over the course of my life. And now this is your very first book. And it's important every month. So anytime you get pocket money, when you start your first job, make sure as well as saving as well as spending, you're saving. And I think that was something that's really stood me in good stead because it's always, I think when I moved out, you know, move left home, moved to London to start my graduate job. I remember thinking, oh, wow, like I'm earning more money than I've ever had before in my life. And I still remember my grandmother saying, Okay, now living in the big city, but still remember to save. So I think that, you know, that's one of the best and most basic lesson, you know, life lessons that anyone could learn, really.
Jason Butler 20:36
So the old thing of spend on consumption, less than you make. That's such an exactly one. Yeah, yeah, I know, it seems like
Davinia Tomlinson 20:45
you cloth according to your size, according to your size.
Jason Butler 20:48
She would say the kids wrote all those years ago about Mr. McCall. But you know, if you're spending more than you've got coming in, it's misery. But if you spend a bit less than you've got coming in happiness, so Okay, so your grandmother clearly was a very, very important figure in your life. Um, but your mum and dad, were they what sort of? I mean, did you grow up in a in a, in a modest sort of family? was it was it sort of borderline poverty? Or, you know, looking back? Where was where was it relative to other people, and also relative to how you would see life? Now?
Davinia Tomlinson 21:19
That's a good question. You know, at the time, you know, looking through the lens of a small child, I remember thinking that we had a life of abundance. Because I had everything that I wanted. I had, you know, when I remember when, when Gameboy when Nintendo was a was a thing in the UK in the 90s. You know, anything that was trending, my parents made sure that I had it. And I don't remember necessarily being at the kind of child that demanded those sorts of things. Because I was quite a nerd. Really, I was quite a bookworm. So if you gave me a book, I was always more than happy and satisfied, but my parents always made sure I had those latest things. And actually, when I reflect back, it's probably because they grew up in those massive households, as I said, you know, we'd lots of siblings, and probably didn't have those things. So it's really important for them, you know, you see that quite commonly with people, when they become parents, if you've grown up in a life of probation, and you have children, you want to make sure that they've got all of these things. But actually, looking back, you know, my parents really weren't earning very much at all, they would have been earning probably somewhere in the region of what would have been been at, you know, national average earnings, but probably below, you know, the median point of earnings. So earning a lot of money, my mom was, you know, she worked in a school as a, you know, classroom assistant, my dad was an electrician. I, you know, I just when I went when I went to university, and, you know, your means tested for access to, you know, grants or whatever. And it was only at that juncture was really funny to me at that juncture that I realized, you know, what my parents were earning. And it meant that I was eligible for financial support, you know, because I was the first cohort to have student loans and that kind of thing, and so you don't have to pay school fees. And I remember thinking, wow, like, Oh, you know, I've grown up thinking, you know, I've got everything that I want, we, you know, we've never, we don't worry about keeping a roof over our head or buying groceries or anything like that. But actually, I wonder whether the reality is quite different from my parents, and that, you know, lots of the arguments that I would overhear would have been as a result of real friction and tension financially because of the level of earnings.
Jason Butler 23:17
So you will gradually as you becoming a young adult starting to get a via the veil of secrecy, not that secrecy, but the veil of transparency was being lifted as it were on you realize you weren't really earning huge amounts, you were doing well, and you were comfortable. But essentially, we're slowly big rollers as it were. So, okay, so what did you learn about the role of work then and that in and its and its role in your relationship with money, as, as you were sort of going to university and understanding what your mom and dad were weren't High Rollers as it were, but we're working hard? Yeah, that's
Davinia Tomlinson 23:52
a really good question. And I think, I mean, the one thing that's come becoming apparent, even in the course of this conversation is that when I contrast the relationship, or the observations that I have, based on my relationship with my grandmother, who I'm supremely close to, even to today, you know, I would spend every weekend with her. Versus, you know, my wives did my parents relationship with money. My parents were very comfortable with debt. And, you know, and by that, I mean, they weren't heavily indebted. We didn't have loan sharks at the door. But I mean, you know, there was in the, in the 80s, for example, the 80s and 90s. There was a real, it was catalogs if you wanted to buy anything, you know, clothes and shoes and things like that, you know, lots of women had catalogs. And I know that my mom was somebody that had you know how to catalog we would order things from that and knowing what catalogs are, I mean, as a child, I was like, oh, I'll just go through and pick whatever I want from this catalog. But now I'm like, Oh, actually, we were still having to pay that over the course of weeks or months in order to pay down those debts and that's something my grandmother just simply would not have done. And just for those people who don't know about catalogs and I'm not you're very young looking Davina, but catalogs where where you would have a big book
Jason Butler 25:00
thick book of 500 pages of all goods and clothes and furniture and everything, and you could do was, say, four pounds 60 a week. Okay? So what it does is it does three things it makes, it gives you lots of temptation, it breaks down the seeming cost to an insignificant weekly amount, which is a classic marketing trick, okay. And thirdly, it gets you to realize that it's affordable, that it's really, really simple, it's easy, and then a person would come around every week and collect the cash. Now, that's been supplanted by other types of credit agreements. But essentially, that's how we became indebted and they were paying something like 30% interest without even knowing it. And that's very similar to the rent to own type thing when you have a washing machine when you're renting it and eventually might own it. So okay, so moving on to unit How did did you come through uni unscathed? Or do you do? Did you rack up loads of debts and go party? And then? Or did you stick yourself down the library and keep it simple?
Davinia Tomlinson 25:54
I was very much in the latter category, I have to say, like, looking back, I wish that I was like a real Hellraiser. But I was like, for my parents, honestly. I was just the dullest student. There was no party. And I mean, I would go to the occasional party. Sure. But there wasn't at all I was the person that would get my papers in. in advance. There was no cramming at the last minute. I'm just not that person. Yeah. And so yeah,
Jason Butler 26:17
well, it came out in text and how did you find the transition of mom and dad sort of dealing with all the paying bills to suddenly you're in digs or you're you prep second year student, which is the big baptism by having to buy food and balance your budget? I mean, did you find that easy? Or? And what tips would you share with people?
Davinia Tomlinson 26:33
I did find that quite easy. But again, I think, you know, going back to the point about my grandmother and resourcefulness. And I think it's like it's endemic in Caribbean culture. You learn to buy things in bulk. It's the big family things you know, you buy rice in sacks, you buy pastor in sacks, you know, you can make a meal out of you know, with your rice, you'll have lots of tins of tomatoes, and some fresh vegetables, and you can put something together and it's fine. I love that you love that, because it's my favorite. Yeah, I love it. So you learn to not just feed yourself, but feed your your fellow students. So I think on the cooking side, I was I you know, I was well equipped. I think when danger really first came to me because I did very well not having a credit card, managing my money very well, all the way through. When I got my first graduate job. When I was just coming to the end of university, I've got my first graduate job. And suddenly, there was a credit card provider called egg, which I think became subsumed by Prudential. And essentially, yes, yeah. Oh, but and then Barclays. But I had, you know, it was really amazing marketing. And they were really targeting young people. And it had, you know, it was the start of the 0% 0%, balance transfer, and all of this kind of thing, you know, buying things on 0%. And I thought, Okay, well, I'm moving down to London, and I'm excited, and I need to furnish my flat and I need to furnish my room and this looks, you know, I'm not I'm big girl. I've got
Jason Butler 27:55
a credit card, right, yeah,
Davinia Tomlinson 27:55
they get the credit card. And that was my first, I think, foray into the world of debt. And at the same time, you know, you have this graduate account, and having never had had the need for an overdraft up until that point, suddenly, I had a 0% overdraft of 500 pounds for throw out
Jason Butler 28:11
there were throwing at you credit.
Davinia Tomlinson 28:13
Absolutely. And I think and it was at that point that I remember, you know, thinking back to, you know, some of again, you know, some of the snippets of conversations, I would hear from my parents, I know that my mom had an overdraft. And I remember not even thinking of it as debt, because of, you know, the way that I would hear my mom refer to the overdraft, it would just be Oh, well, you know, I still got some overdraft left. So it's fine. You know, if we want to buy something, but I need to buy it in the overdraft. That's okay, because I get paid tomorrow, kind of thing. And so when I was offered an overdraft, I don't think I thought of it in the same way as an aggressive credit card or an aggressive loan.
Jason Butler 28:48
So your mom had to, through her language?
Davinia Tomlinson 28:51
That's it. Exactly. And it's only now that I think, you know, I, when I speak to women, and I say, you know, an overdraft is still debt, and they can claw it back at any time. So you've really got to think of it as the same as any other kind of debt.
Jason Butler 29:02
Yeah. So you got through university, you started your graduate job you've got you know, you had this over 0% overdraft and you've got the card. You're all happening. You bought your stuff in your flat. How did the first four or five years of your career go? Did did you suffer from lifestyle creep? In other words, spending up to what you're earning? Or did you get really intentional and or did you build up debt? or How did you navigate those first formative years of your career?
Davinia Tomlinson 29:26
Yeah, I think I mean, that was that was the exciting time. So having, you know, not been wild at university. I think when I first moved to London, of course, I loved the world. Yeah, I loved the city. I loved the world of finance. There were dinners every night with clients, there was, you know, all the shops and you know, the designer shoes, designer handbags, it was everywhere, and I wanted it all and I was like, you know, I can see you know, your lifestyle creep for sure. You know, as a young woman, you know, you're 21 and you're now working in this massive bank and you see women that are doing amazing things and I was always in spired by the women in senior leadership positions who really well put together, they were going out for bloat in a big blow dries at lunchtime. And I thought, wow, like, this is real glamour and I, I want to be like them. And so of course you're trying to dress for them, you know, the advice you were given was dress for the position that you want. And so I thought, Okay, well, that means that I've got to get, I have to dress like that woman because I want to be in her job in a few years time. So definitely that lifestyle creep was there. And I think with my union brandishing my 0% EAD card, which very quickly became not 0% anymore, and I was like, Oh, it's fine, because I'm, every time I earn some money, I just paid down. So this idea of this revolving credit that you just never get rid of, that only really caught up to me, probably I would say, after about five years when I was like, Oh, God, like I've dug a real ditch for myself here. I started off with 500. And now I'm on like, three grand. And that was when, you know, I decided I've got to do something about this. I've got to clear it. three rounds may seem small to some people, but to me, it was a horror.
Jason Butler 30:57
What was the what was the catalyst? What was the I'm not putting up with this anymore? What was the main thing where made you realize this was the wrong path, or as I call it, you'd gone down a cul de sac, and you got stuck there?
Davinia Tomlinson 31:08
I think it was, you know, it's really funny when you know how moments of truth come to you. But I remember there's a time like, I'm somebody that deals with all of my life admin online. And if you imagine like this, it's only very recently and there's still lots of particularly financial services providers that surprisingly, still try to send you letters. Now I got I have stashes of letters that I just never wrote. Because I'm like, why are you sending me letters? Like this? So I remember getting a letter like opening a next statement and going, sorry, what? What's this? I thought I had 500 pounds. Why does it say 3000. And I remember bringing them and saying there must be some mistake, like I've got 500 pounds, like my limit was 500 pounds. And I hadn't realized, of course, again, every time you know, as much as I'm spending and repaying they're increasing the limits each time. So just spending and spending and spending, never checking, because I just wasn't doing that I was like, well, as long as I can afford to repay, it doesn't really matter if I'm only be paying the interest, I just didn't have that grasp on reality. So when I open that letter and run them, honestly, but if not me down with the feather, I was just so I have this kind of this overwhelming feeling of shame, I think, because I think, you know, having had the expect the background that I've had, and knowing that, you know, my, my whole family was so proud of me, you know, one of the first to go to university, and you know, dad's doing so well. And she manages her money really well, we don't need to worry about her. And then I'm like, why if I got this bill for three grand, like, how could I ever explain how I got into this situation, because I don't even have anything to show for it. I think it was that that was my moment of truth.
Jason Butler 32:37
But thank you for sharing that. And that's really, I love the humility you got of actually saying that because shame, guilt, embarrassment, and fear. These are all very strong emotions, and they're extremely negative, and they add to stress. And they really attack your self esteem and your self image. And lots of people are in denial about their financial situation. And the shame comes because you as you say, it's not like you, you, you tried to start a business and it went wrong, and you've left with a day you just consumed it. And that's where the shame comes in. Because you don't feel that you've let your grandmother down probably because if you you know she would be in the Caribbean next and probably saying, so, what did you do then? What What was your plan of action, once you suddenly realize this 3000 pounds was like a bolt from blue and a wake up call?
Davinia Tomlinson 33:28
Well, I am very much a kind of, I'm kind of a tough love person, even with myself. And so immediately I went into it after it, you know, I had a bit of, you know, kind of, like self flagellation, and then I just kind of ripped the plaster off. And I was like, okay, but immediately I took the card out my purse, caught it, cuts it off and put it in the bin. And I remember I said to egg, then I needed to close my account. And the woman was like, Oh, well, you know, you saw this balance. I'm like, No, I'm going to pay down the balance incrementally, but I want the account closed.
Jason Butler 33:58
account closed with a negative balance. People don't know about that. Do they?
Davinia Tomlinson 34:01
Yes, exactly. So I mean, I said to her, she was like, Oh, well, you can't because the so I was like I need to not have the ability to spend on this anymore. Now at that point. I wasn't in a situation where I was completely addicted and needing to use it. But I just wanted to feel psychologically that that was not an avenue. I didn't have that as a life
Jason Butler 34:21
to live. No,
Davinia Tomlinson 34:21
no, not at all. And so over the course of maybe six months, I pay down that debt. And I remember it was probably around Christmas, and I felt like I'd won the lottery. Because I was like, Oh my gosh, like this was a noose around my neck. And I didn't even know it was there. And that and you know, as soon as I knew it was there that I took steps to doing something about it, which is something concrete, you had a plan of action and you took responsibility. Interestingly, I recently I haven't had that for a long time. And
Jason Butler 34:47
I recently got rid of my credit cards because I suddenly realized, hang on, I'm teaching people about it. I thought well, convincing myself about points and protection on the internet. I suddenly I'm sorry. Bring up American Express. Whatever I mean to myself as getting points from ba and all this stuff, it's all rubbish. And I rang up and said, I'd like to cancel my card because well, why do you want to cancel it? I don't need it anymore. I don't want it in my life. And they'd said, You sound upset. I said, I'm upset. I said, I'm not. I'm not. I mean, me and the card are finished. She goes, I said, I know. But I don't need it in my life. I said, its way through. I said, it's been through, I've moved on. She the half the lady, she doesn't Well, I can close it. But what do you want me to do these 200,000 points. I said, keep them Wow.
Davinia Tomlinson 35:31
Oh, my God.
Jason Butler 35:33
Now I didn't cheat. Actually, I got this long story, but I didn't get them put onto a free card. And then I moved on to my BA account. But the point is, it's easy to get as Dave Ramsey in the state says it's easy to wander into debt, but it's so much harder to wander out. So men move on then. So you've got rid of the credit card debt? And how did your relationship with money then evolved? You know, went to where you are today? And how did you develop? What principles did you develop? And how are they helping you?
Davinia Tomlinson 35:57
I think, you know, I mean, it coming to the end of that, you know, that example that I gave about the credit card, I think the other moment of truth for me was buying a flat. And I was quite fortunate in the sense that, you know, when, when so many young people struggle to get on the property ladder. Things that I learned from my dad, you know, he came to me when when I first moved to London, and he was just appalled by the price of rent, or you know how much you're having to make your rental payments up compared to what the value would have been burning when, of course, my parents on their home. So there was a big family trend of homeownership, the idea of renting to them was just really alien. And I think when I obviously come down, came down to London, and they're like, What on earth is this like, this is twice as much as we're paying for a mortgage on a three bedroom house. It's my dad really, really encouraged me, you know, recognizing that, you know, earning a good salary to buy flat. And I remember even having a conversation with him and saying, I will I've saved this money, and I really want to buy a car. And my dad was like, why do you want to buy a car? And I'm like, well, I've got I've got a Ford K, I don't want to 4k I want an Audi. I mean, I was like, no doubt you need to buy somewhere to live. And so I bought, you know, I have this wrangle with him. But in the end, I bought a flat. It's one of the best investment decisions I've ever made. And I think at that juncture, obviously, suddenly, I was like, oh God. So now I've gone from the three grand of debt to suddenly 200 grand of debt. And so I remember like really feeling like I was in quicksand at that point, like a mortgage just felt so monumental to me, and then recognize it, okay, now you have to be really ruthless with your finances, you can't afford to have those kinds of random slip ups anymore, dad. So that was when I started to document things. I think that was the turning point for me and suddenly saying, Okay, now I've got a spreadsheet, what's coming in every month, and what's going out to the penny. And that was really, when I think as I say the turning point in terms of my own self discovery with money came from?
Jason Butler 37:44
Well, there's two things there. Actually, housing is an investment isn't actually particularly good investment. But if you compare it to equities, but because we all need somewhere to live, right? Right? Yes, that that's that that always tips it in the favor. And secondly, it's an enforced form of savings, as long as you don't rack up consumer debt. So you're absolutely proving the two points. So you rationalize the debt on the basis that you need somewhere to live anyway. And but it was actually the catalyst, it gave you the excuse, if you will, or the backdrop or the story or the narrative to get serious and be responsible about how you're spending your money. So from there to here, what are your sort of top tips for people? What are your principles that you run your personal finances by that you now also share with other people?
Davinia Tomlinson 38:27
Oh, I think I mean that that last point is the main one, which is make sure you're tracking your income and expenditure. So it really goes back to that, you know, my grandmother's point, which is don't cut your cloth bigger than your size, make sure that you're able to live within your means. But also, I would, you know, I always stress, it doesn't mean that you've got to live this life of, you know, extreme deprivation, you know, you know, if you want to go out if the things that you enjoy to do that you shouldn't do and enjoy life. Yeah, exactly. We need to make sure that we are enjoying life, because that's not good for our mental well being either if we're like what I'm
Jason Butler 38:57
saying one day, right, so,
Davinia Tomlinson 38:58
exactly. So that's really important. I think the second point is about making sure that you've always got a cushion. So you know, having your rainy day fund my grandparents, it was their partner. To me, it was, you know, always having you know, stash of money that if something went wrong, I could be self, you know, I could self sustain. And I think you know, that that was another thing that was really important to me, you know, I always wanted to be independent. So I always felt like, I never want to go to my family for money. So having my own stash of cash was important to me. And then think long term. So one of the first things you know, coming into the city, and again, you know, working the world of finance, you're entered into a pension scheme didn't have any idea what it was at all, but one of the lessons that my mom always gave was that, you know, working in a school and she actually worked for the educational authority, she would have had a workplace pension through the educational pharmacy, but my mom always paid into the private pension. So you know that again, perhaps, you know, something that she would have taken from my grandmother, making sure you've got your nest egg for future is really key. So that's something that you know, I always hold true to the
Jason Butler 39:59
great principles. in respect of women, as we sort of draw to a close today, but in respect of women, what do you think the challenges and opportunities are for women when it comes to thinking about the finances? And what can they do to improve them?
Transcribed by https://otter.ai