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The Financial Planner’s daughter

Updated 03 December 2020

2min read

Nick Green
Financial Journalist

Young people have it tough these days, financially – and they often need help from Mum and Dad. But it’s particular lucky if Mum happens to be a financial planner. Anna Sofat, Director of Addidi Wealth, has had her daughter listening to her for a change…

woman on street

My daughter, who is now 26, is fairly independent-minded but also naturally careful. This has helped me in my efforts to instil some basic financial principles in her, and this has worked out pretty well for both of us so far.

While my daughter was at university, we paid into a cash ISA for her while she took out a student loan.  After leaving university, she decided to spend the savings on a year-long trip, rather than pay down her loan.  It was her decision to balance what she would achieve today vs paying for the loan over the longer term!

Upon arriving home she started work with a big employer who offered a range of benefits – some of these were automatic, but others she needed to buy.  I encouraged her to join the pension scheme (she was getting up to 5% from the employer if she paid in 5%). It was not easy, but on a salary of £25k she was paying in £100 per month from her pay before tax, which only reduced her monthly pay packet by about £68. So it works out as very good value and she now has a small pension. It’s fully invested in shares at the maximum risk she can take, as she has a long time before she will be drawing any benefits, so she can afford to take the risk.

She rented her accommodation initially, but we reasoned that for similar monthly payments she could afford to pay for a mortgage. So we offered her an option – she could either continue to rent, or use some of the savings we had put aside for her wedding for a deposit on a flat. She opted for the flat! We had to guarantee the mortgage, but this has given her great responsibility as a home owner.

Her employer offered a share scheme, and despite her reservations I encouraged her to join. She could save £150 per month, which cost her only around £100 after tax. This was a tough decision for my daughter to make, but she added everything up and decided she could always cancel if it got tough. Three years later, she cashed in the share scheme to pay for a deposit on her dream car – a bright red convertible BMW. Not my choice, necessarily – but it’s her life!

Additionally, we pay for one family holiday a year – we get to see her, while she gets a freebie. If we insisted on her paying, I am not sure we would see her, as I like a comfortable holiday rather than the budget version she favours.

Maybe it’s another result of being a financial planner’s daughter, but at birthdays and Christmases she will often ask for money rather than presents. But that’s fine – she’s proven that she is sensible, and lives within her means much of the time. I am often told that she doesn’t have a choice but to be sorted, financially – but I don’t think it’s my badgering her that has done the trick so far, so much as her inheriting my sensible genes.

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About the author
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.