# Finding Financial Freedom

An episode of [A Little Bit Richer](https://invisiblenetwork.ai/podcast/1706157445), 2 Nov 2023, 14 min.

Audio: https://pscrb.fm/rss/p/traffic.omny.fm/d/clips/2e9a850c-e6b9-48c2-afec-a8f8010f70f4/61b6e292-1c73-49e1-81ce-b075010b275f/474d9965-f30c-4372-8937-b0a600875aeb/audio.mp3?utm_source=Podcast&in_playlist=aee4b1cb-b4f6-4283-99aa-b075010cd6b0

A Little Bit Richer is all about helping you find different ways to save and grow your money. But why bother? What can all that saved up and invested cash actually get you? What many people look for is the financial freedom and flexibility to live their dream lifestyle. You might want to go travelling, retire early, or have a portfolio career. Once you figure out what your priorities are, it’s time to understand how your finances can help you make those goals happen. That’s where Jenny Hazan, Director of Customer Value Management at Legal & General, comes in. In this episode, she and Kia Commodore chat about all the different lifestyle choices out there, and how your finances can free you up to make those choices. You can play the podcast and find other useful content on Legal & General’s website: https://www.legalandgeneral.com/podcasts/a-little-bit-richer You can read more about the FIRE movement here: https://www.legalandgeneral.com/retirement/rewirement/setting-financial-goals/the-fire-movement-what-is-it/ Kia and her guests share their own personal thoughts and opinions in this podcast. These might be different from Legal & General’s take on things. They give financial guidance for a UK audience that’s relevant at the time of recording. It’s general best practice, not the kind of personalised advice you’d get from a financial adviser. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Kia: Hey, it's Kia. Throughout this series, we've been exploring different
[0:04] Kia: ways to save and grow your money. In this episode,
[0:07] Kia: I want to focus on what your money can actually
[0:10] Kia: get you. Everything's changing. It used to be you'd work
[0:13] Kia: one job all your life and then retire, but these
[0:16] Kia: days there are so many different approaches to work and
[0:18] Kia: leisure. So today, I'm talking to Jenny Hazan, Director of
[0:22] Kia: Customer Value Management at Legal & General, about all the different
[0:25] Kia: choices out there, and the freedom our finances bring us
[0:28] Kia: to make these choices. So, Jenny, there are many different
[0:33] Kia: approaches to work and finances out there. People are doing
[0:36] Kia: FIRE, they're taking sabbaticals, they're having portfolio careers. Can you
[0:41] Kia: talk me through a few of these different options?
[0:43] Jenny Hazan: Yeah, totally, Kia. So as you said, that distinction between
[0:47] Jenny Hazan: working life and retirement used to be really clear. In
[0:50] Jenny Hazan: fact, we worked at one organization, probably stayed in the
[0:53] Jenny Hazan: same industry, maybe even at the same company for all
[0:57] Jenny Hazan: of our career. And then on a set date, we
[0:59] Jenny Hazan: suddenly became retired, and hopefully by that point the kids
[1:02] Jenny Hazan: have moved out, you paid off the mortgage, and now
[1:04] Jenny Hazan: was the time that you got to enjoy life. And
[1:07] Jenny Hazan: I think people are looking for more financial freedom, flexibility
[1:11] Jenny Hazan: and choice, and they're looking for different options. Even just
[1:15] Jenny Hazan: friends of mine actually, that have taken on new ways
[1:18] Jenny Hazan: of doing this. So a portfolio career, for example, is
[1:20] Jenny Hazan: where you may choose to be freelance, you may choose
[1:23] Jenny Hazan: to work on a number of projects that are related
[1:26] Jenny Hazan: or unrelated, working for companies and organizations that are interesting
[1:30] Jenny Hazan: to you, that you're passionate about. I also have a friend
[1:33] Jenny Hazan: that's recently taken a sabbatical. So a sabbatical is a
[1:37] Jenny Hazan: period of time where you will agree with your company
[1:40] Jenny Hazan: to take unpaid, usually unpaid, time off, so maybe three
[1:44] Jenny Hazan: months or six months, to focus on other passions or
[1:47] Jenny Hazan: things like travel. And then in addition to that, because
[1:50] Jenny Hazan: of the pandemic and because of our ability to connect
[1:53] Jenny Hazan: with the working world from lots of different places, lots
[1:56] Jenny Hazan: of people are choosing to be digital nomads, work from
[1:59] Jenny Hazan: wherever they are, abroad. And I think people are really
[2:02] Jenny Hazan: looking for opportunities to do things a little bit differently.
[2:06] Jenny Hazan: So there's definitely a push for people to think about, "
[2:10] Jenny Hazan: Well, can I work for a certain period of time?
[2:12] Jenny Hazan: And then only work if I need to work?" And
[2:14] Jenny Hazan: we mentioned FIRE, so FIRE stands for financial independence, retire
[2:20] Jenny Hazan: early, and that's a movement that started off in the
[2:22] Jenny Hazan: US and became popular probably from about 2010 onwards. And
[2:26] Jenny Hazan: the main principles are about saving as much as you
[2:30] Jenny Hazan: possibly can, investing as much as you can, living off
[2:35] Jenny Hazan: less of the world's resources, but living well. But people
[2:39] Jenny Hazan: that are taking on the FIRE movement, are tending to
[2:41] Jenny Hazan: save a lot more than what most people can usually
[2:44] Jenny Hazan: save. So up to 70% of their income. And they're
[2:49] Jenny Hazan: usually aiming to get around about 25 times their living
[2:53] Jenny Hazan: expenses, so that they can invest that money and live
[2:55] Jenny Hazan: off the investment returns. Now that might seem a little
[2:59] Jenny Hazan: bit extreme and it does mean a lot of sacrifice,
[3:02] Jenny Hazan: but I think what this shows is that people are
[3:05] Jenny Hazan: looking for different options for themselves. I know for me
[3:08] Jenny Hazan: personally, travel's really important, and so I want to be
[3:12] Jenny Hazan: able to have a lifestyle that over time my working
[3:15] Jenny Hazan: life will allow me to do that.
[3:16] Kia: It is great hearing the different ways that people are
[3:20] Kia: actually taking charge of their finances and taking charge of
[3:23] Kia: how they work. It is so key, because this generation
[3:26] Kia: is very much thinking about the future and thinking about
[3:29] Kia: different ways, like you mentioned, our parents or our grandparents,
[3:33] Kia: their generation was like you said, one job, work till
[3:36] Kia: you retire, retire, then that's it. And now we're kind
[3:39] Kia: of saying, " No, I actually want a bit more freedom.
[3:40] Kia: What can I do to get more freedom?" So I
[3:43] Kia: want to ask you then, how can our finances help
[3:47] Kia: us to access these different choices that we've got?
[3:49] Jenny Hazan: Yeah, so I think the principles, even if we talk
[3:52] Jenny Hazan: about FIRE where we say, " Oh gosh, that's quite extreme,"
[3:54] Jenny Hazan: but the principles of it still stand strong, which is
[3:58] Jenny Hazan: save as much as you can as early as you
[4:00] Jenny Hazan: can. And the reason for that is because the earlier
[4:03] Jenny Hazan: you save, the more time that money has to potentially
[4:06] Jenny Hazan: grow. And I think with so many different choices available
[4:10] Jenny Hazan: to us now, it can be quite difficult to think
[4:12] Jenny Hazan: ahead to the things that you might want to do.
[4:15] Jenny Hazan: So actually setting out some goals, whether those be long-
[4:18] Jenny Hazan: term, medium, or short- term, so that could be anything
[4:21] Jenny Hazan: from having flexibility around your career, to saving up a
[4:25] Jenny Hazan: deposit, to just being able to afford some nicer little
[4:28] Jenny Hazan: luxuries in life, is really, really important. But that takes
[4:32] Jenny Hazan: budgeting, that takes saving, and also working towards a goal.
[4:37] Jenny Hazan: I think sometimes it can be quite hard to think
[4:40] Jenny Hazan: about starting these sorts of things, so one of the
[4:43] Jenny Hazan: things about thinking about these goals, and actually starting to
[4:46] Jenny Hazan: picture them in your head, is that you then have
[4:48] Jenny Hazan: a much clearer motivation for doing the work that you
[4:52] Jenny Hazan: need to do in order to plan for this.
[4:54] Kia: I love goals so much. I'm glad you touched on
[4:57] Kia: it, because I think when you come to your finances
[5:00] Kia: and you come to planning, or saving, or anything to do with
[5:02] Kia: your finances, and you're almost saving aimlessly, it can feel like, "
[5:06] Kia: Why am I doing this?" But when you have a
[5:07] Kia: goal in mind, that can help. And I'm someone who's
[5:10] Kia: very visual, so I put my goals down on a
[5:12] Kia: vision board-
[5:13] Jenny Hazan: Same.
[5:13] Kia: ... so I know... (inaudible) . ... so I know at the foot of
[5:16] Kia: my bed or wherever I choose to place it at
[5:18] Kia: my house, I can wake up, and when you have
[5:20] Kia: those days like, " Oh, I just want to spend my
[5:21] Kia: money on... I just don't want to do this," you can
[5:23] Kia: kind of look at your vision board, and see, actually,
[5:27] Kia: I know I'm saving, because I want to get to
[5:29] Kia: this or I'm investing for this reason. And it helps
[5:31] Kia: to keep you on track, which is so good. And
[5:34] Kia: I'm so glad you mentioned goals, because it's just really,
[5:36] Kia: really important. Now, you touched on it a little bit
[5:39] Kia: just now, but what can our listeners be doing with
[5:42] Kia: their finances now, that can give them as much freedom
[5:46] Kia: as possible in the future with their finances?
[5:49] Jenny Hazan: Once you're clear about your goals and what those goals
[5:52] Jenny Hazan: might look like, what sort of money you might need
[5:55] Jenny Hazan: to afford those goals, the first thing is really to
[5:58] Jenny Hazan: have a look at your finances. So what have you
[6:00] Jenny Hazan: got coming in, what have you got going out. How
[6:03] Jenny Hazan: much do you think that you could save. And I
[6:05] Jenny Hazan: think a lot of people sort of struggle with the
[6:07] Jenny Hazan: concept of, " I don't even know how much to start
[6:10] Jenny Hazan: with," or, " I haven't got much flexibility." So a general
[6:14] Jenny Hazan: rule is the 50, 30, 20 rule. So 50% of your income
[6:19] Jenny Hazan: would be spent on your essentials. So the needs. 30%
[6:23] Jenny Hazan: on your wants or the fun stuff. And then 20%
[6:27] Jenny Hazan: saving for the future. So you can start there, and
[6:30] Jenny Hazan: it will be different for different people, but what you
[6:32] Jenny Hazan: want to be thinking about is, " How do I build
[6:35] Jenny Hazan: towards financial resilience?" So what that means is, " Can I
[6:38] Jenny Hazan: weather the storm if something comes out of the blue?"
[6:42] Jenny Hazan: all the way through to financial freedom, which is where
[6:44] Jenny Hazan: you get more flexibility with your choices over the long-
[6:47] Jenny Hazan: term. So to start off with, make a budget, try
[6:51] Jenny Hazan: and stick to it, and keep going, be consistent. If
[6:54] Jenny Hazan: you have a month that's tough, don't give up, keep
[6:58] Jenny Hazan: going. The second thing is you need to think about
[7:01] Jenny Hazan: emergency savings. So thinking about your living expenses and trying
[7:06] Jenny Hazan: to put away three months to six months of savings
[7:11] Jenny Hazan: that are in an easily accessible cash account, high interest
[7:15] Jenny Hazan: if possible, that you can gain access to. So these
[7:18] Jenny Hazan: are for the things that might go wrong in life.
[7:19] Jenny Hazan: You know, your MOT just came through and your car's
[7:22] Jenny Hazan: failed, or that you unfortunately lose your job, or maybe
[7:28] Jenny Hazan: the washing machine broke down. So these are things, emergencies,
[7:30] Jenny Hazan: that you need money for. And if you haven't got
[7:33] Jenny Hazan: three months saved away and you're thinking, " My God, how
[7:36] Jenny Hazan: do I do that?" start with one month, start with
[7:38] Jenny Hazan: one week, step- by- step. The second thing that you
[7:42] Jenny Hazan: can do once you've got an emergency savings budget is
[7:45] Jenny Hazan: start to work on something that the industry sometimes like
[7:48] Jenny Hazan: to call the FU fund. And that is really about
[7:52] Jenny Hazan: having power and having choice. So this is the ability
[7:55] Jenny Hazan: to walk away in situations where they're not serving you
[7:59] Jenny Hazan: anymore. So that might be a job that you really
[8:01] Jenny Hazan: hate, that's really impacting your mental health. It might be
[8:04] Jenny Hazan: to walk away from a relationship. It might be to
[8:07] Jenny Hazan: walk away from that awful flatmate that has not washed
[8:10] Jenny Hazan: the dishes since the day they moved in. And over
[8:12] Jenny Hazan: time you can continue to build that fund. So I
[8:16] Jenny Hazan: think that's a really important one to think about. After
[8:19] Jenny Hazan: that, you can start thinking about those savings goals. So
[8:22] Jenny Hazan: the short- term, the medium- term, and the long- term,
[8:25] Jenny Hazan: and think about what sort of money you will need
[8:28] Jenny Hazan: for those goals, and at what point in your life,
[8:31] Jenny Hazan: because that has an impact on where you want to
[8:33] Jenny Hazan: invest that money. So I think from a longer term
[8:36] Jenny Hazan: perspective, obviously a pension is a great place to start
[8:40] Jenny Hazan: thinking about long- term saving. Pensions can be really tax-
[8:43] Jenny Hazan: efficient, so if you wanted to put a hundred pounds
[8:47] Jenny Hazan: into your pension, £ 80 of that would come from you, £
[8:50] Jenny Hazan: 20 would come from the government. And also, your employer
[8:54] Jenny Hazan: will, if you've got a workplace pension, will also be
[8:56] Jenny Hazan: making contributions as well. And I think it's worthwhile mentioning
[9:00] Jenny Hazan: that some employers will put more money in, they'll match
[9:03] Jenny Hazan: your contributions. And if you're not going to that level,
[9:07] Jenny Hazan: you're actually leaving free money on the table, and no
[9:09] Jenny Hazan: one wants to do that.
[9:11] Kia: I love the fact that you mentioned that fund, the
[9:14] Kia: FU fund. I'm from a Caribbean household, so in my
[9:18] Kia: background we call that like the vexed fund.
[9:19] Jenny Hazan: The vexed fund. Love it.
[9:20] Kia: So when you're, like you said, when you're annoyed, just
[9:23] Kia: having that pot of money, but I think it is
[9:25] Kia: about making your finances or making your money a point
[9:30] Kia: to give you freedom. So like you said, freedom of
[9:32] Kia: choice, to decide to leave a job that you don't like, all
[9:35] Kia: the things that you mentioned, or freedom to cover your
[9:39] Kia: income if you happen to lose it for a period
[9:40] Kia: of time, or freedom to decide that I want to
[9:43] Kia: retire at 45, but I'm going to put my money aside
[9:45] Kia: to be able to do that. I think that's the
[9:47] Kia: main key here. We're just trying to get our money
[9:49] Kia: to work for us so it can give us more
[9:51] Kia: freedom. We have been talking about this and it sounds
[9:55] Kia: great, but I want to ask you, are there any
[9:58] Kia: disadvantages to all of this? Is it maybe too much
[10:04] Kia: to focus on so much of this for the future? Are
[10:06] Kia: we putting too much emphasis and too much pressure on
[10:08] Kia: a lot of things at once for the future?
[10:11] Jenny Hazan: I think that's a great question. I think it's all
[10:13] Jenny Hazan: about balance, and that balance is going to be really
[10:15] Jenny Hazan: different depending on your own financial circumstances and what you're
[10:19] Jenny Hazan: trying to achieve. And the worst thing that you could
[10:22] Jenny Hazan: do is stretch yourself so far that you end up
[10:25] Jenny Hazan: running up credit card bills whilst you're cleverly saving away,
[10:29] Jenny Hazan: but actually you might have something that's a high interest
[10:32] Jenny Hazan: rate debt, and you don't want to do that. You
[10:34] Jenny Hazan: want to pay that down. So I think this is
[10:36] Jenny Hazan: where it comes back to really sitting down with your
[10:39] Jenny Hazan: finances, getting really clear about what it is that you
[10:42] Jenny Hazan: really want. And I don't necessarily mean " things" in that
[10:45] Jenny Hazan: sense. It will be, what experiences do you want? What
[10:48] Jenny Hazan: sort of lifestyle would you like to have? How can
[10:51] Jenny Hazan: you build up to that gradually? The plus point is
[10:53] Jenny Hazan: if you're younger, then you've got a lot more time
[10:55] Jenny Hazan: to do that if you start early. And I think
[10:59] Jenny Hazan: sometimes we worry about whether or not we're saving enough,
[11:03] Jenny Hazan: whether or not we're on track, and there's lots of
[11:05] Jenny Hazan: tools that can help you with that. But I think
[11:07] Jenny Hazan: the important bit is not overstretching yourself, making sure that
[11:11] Jenny Hazan: you remain balanced. And if you align your savings to
[11:15] Jenny Hazan: your goals and to your ambitions, then it becomes a lot
[11:19] Jenny Hazan: easier to say, " Do you know what? I probably could've
[11:22] Jenny Hazan: made my lunch at home rather than buying it out.
[11:25] Jenny Hazan: I probably don't need that other coffee. Do I need
[11:28] Jenny Hazan: those new trainers?" and still give yourself a little bit
[11:31] Jenny Hazan: of flexibility to reward yourself. We talked about the 30%
[11:35] Jenny Hazan: of income on fun, because life should be fun.
[11:38] Kia: Life should be fun. Absolutely. I agree with you. As
[11:40] Kia: someone who's in their 20s, I know how important it
[11:44] Kia: is to balance your finances. Obviously it is very important
[11:48] Kia: to make sure that your money's working for you and
[11:50] Kia: you're planning for the future, but also, I want to
[11:53] Kia: make memories. I want to have fun. So it is
[11:55] Kia: about striking that right balance where you're not, like I
[11:58] Kia: said, just spending tons of money on things. That maybe
[12:01] Kia: if you sat down you're probably just like, "I could've done without that."
[12:03] Kia: But equally, you're not saving everything or investing everything, so
[12:06] Kia: that you can't go out with your friends one weekend and
[12:09] Kia: have a good time, or you can't go on that trip
[12:11] Kia: that you wanted to go on. It's finding that right
[12:13] Kia: balance, like you said. Jenny, I always end these episodes
[12:17] Kia: with the same questions, so I'm going to ask you,
[12:20] Kia: what are your three pieces of advice to help our
[12:22] Kia: listeners get a little bit richer?
[12:24] Jenny Hazan: So we talk about money here, but actually it's about
[12:27] Jenny Hazan: what it can allow you to do. So get really,
[12:30] Jenny Hazan: really deep with yourself in terms of what you want
[12:33] Jenny Hazan: your life to look like, what's important to you, what
[12:35] Jenny Hazan: your values are, because developing your goals based around this
[12:38] Jenny Hazan: will make it a lot easier to have the motivation
[12:42] Jenny Hazan: to save. The second one is save as much as
[12:46] Jenny Hazan: you can as early as you can, because it really
[12:49] Jenny Hazan: does make a big difference to the amount that you
[12:51] Jenny Hazan: can save over time, and you get the awesome impact
[12:55] Jenny Hazan: of compound growth as well. And then the third thing
[12:59] Jenny Hazan: is have fun with it. So I think sometimes we
[13:02] Jenny Hazan: are at risk of not enjoying the saving that we
[13:08] Jenny Hazan: do, because we see it as something to sacrifice. That
[13:12] Jenny Hazan: we're sacrificing things in the now for things in the
[13:14] Jenny Hazan: future. But actually, make it fun. Make it a game.
[13:17] Jenny Hazan: Think about the rewards that you can offer yourself, and
[13:20] Jenny Hazan: feel empowered. At the moment it can feel really stretched,
[13:24] Jenny Hazan: particularly with rents increasing, mortgage rates increasing, the cost of
[13:29] Jenny Hazan: just living is increasing, and so it can feel really
[13:32] Jenny Hazan: difficult to think about saving. But ultimately, we can always
[13:36] Jenny Hazan: start small, one step at a time.
[13:38] Kia: Jenny, thank you so much. This has been just a
[13:42] Kia: great episode for people to kind of have some food
[13:45] Kia: for thought, to figure out what they want their money to
[13:48] Kia: be doing for them. And like we keep emphasizing, striking
[13:51] Kia: the right balance, and also enjoying life as well. That's
[13:54] Kia: the important bit. So thank you so much for coming
[13:55] Kia: on to the episode. This has been amazing. Some great
[13:59] Kia: tips for planning for the future there, and that's really
[14:02] Kia: key. You just never know what might happen. Which is
[14:05] Kia: why, next week, I'm focusing on how unexpected life events,
[14:09] Kia: like illness, can impact your finances. It's important stuff. So
[14:13] Kia: if this is resonating with you, then follow the podcast
[14:16] Kia: and tell your friends. See you next week.

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