We often read about the importance of budgeting and investing, and there is plenty of available literature. Yet, while having read and studied a lot of it as part of my degree and even managed people’s portfolio as a job, I did not find doing it for myself a particularly easy task.
I was born and raised in Italy; I moved to London to finish my studies and I have been working and living abroad since then. My time in London was followed by a short stint in New York and a long one in Hong Kong before I moved to Switzerland 4.5 years ago. Since falling into banking by chance ten years ago, I have been working in a number of different roles, including investment counselling.
My parents have always explained to my sister and I the importance of living below one’s means and investing, but how to do that in practice was never discussed. So, when I started working, it took a lot of trial and errors to get to an approach that works for me and for my family.
My first job entailed moving every six months for one year and a half; I got to live in two of my dream cities, New York and Hong Kong, and my focus was more on travelling than on savings. I made great memories through not-so-budget-friendly adventures. While I have not contributed to my saving pot during that period, I have also never spent more than I earned, never maxing out cards or needing ‘bail-out’. However, there were some close calls, for example higher than expected bills, or unexpected house moves requiring a 3-month deposit in cash, which made me realise that winging it was lo longer good enough for me.
I started trying to be more systematic, one thing at the time. I began by building my “rainy-day-fund” by setting aside a small amount every month, to use in case of emergencies. I then began dividing expenses into categories (savings, home and utilities, healthcare and discretionary) and tracking them. Assigning a budget to each category was my next step. A major overhaul took place last year, with the birth of my son, which means that now a significant part of my budget goes towards childcare.
My partner and I met when we both were old enough to have our own assets, and we keep and manage them separately, while sharing common expenses. It is a system that works for us, it gives us the possibility to be financially independent and makes our own financial decisions once our share of common costs is met. It is up to each family to find what works for them, after having considered pros and cons for both parties.
As for investing, I am not proud to say that my savings ended up sitting in a current account for years. Despite my education and experience, I was irrationally fearful of investing, of not being able to find the “perfect moment” to invest even though there is no such thing, as I often reminded my clients. I mulled a particular investment over for way too long before deciding not to proceed. Incidentally, had I decided to go for it, it would have given me a +96% return by now, 8 years later. It did take me some years to take the plunge and build a diversified, low-cost portfolio.
We are currently based in Geneva, Switzerland, but we are not quite sure about where we will be in five years’ time, so for the time being we have not purchased a property, preferring to invest in the financial markets. Once (if!) we decide where we want to settle, that will become a goal.
Our son is still very small, but in time, I would like to give him the tools to enable him to confidently make his own financial decisions. Ideas are welcome!
Article by Giulia Gramola, this publication and the sources reported are the exclusive result of the author's experience and free thinking. Oval does not provide financial advice, your capital is at risk, past performance is not indicative of future income.