Why your money needs to slow down
By Becky O’Connor, co-founder and editor of Good With Money
In our technologically-enhanced, uber-convenient, touch-of-a-screen lives, there is a tendency to speed up and complicate everything, just because.
There’s a term for this: “expansion bias” – and it’s used by behavioural economists to explain things like the obsession with GDP growth at all costs and making more investments when fewer would result in the same gains.
To desire more, faster is the way us humans are hard-wired to understand progress, and our lives indulge this impulse daily.
But before this starts to sound like a lecture, perhaps it’s best to show my hand: I’m an expander. I’ve got more tabs open on my laptop than my brain can manage and more apps on my phone than are useable in a year. There are 186,345 emails in my inbox.
This type of expansion, perhaps, more a consequence of being too distracted/ busy/ lazy to cull and edit, more than a will to never-ending growth for growth’s sake. But none of it sits well with me. I feel a need to cut back, declutter, simplify in so many areas of my life, and right now, one of them is money.
We’re at an interesting point in the evolution of financial services right now, with the industry feeling the full force of the tech revolution and there being a new app from a new challenger bank, app or platform seemingly daily. All promise to revolutionise the way we manage our money one way or another. What each is doing is likely to be very helpful to those of us who are totally jaded by “finance”, a word that might as well be written in hieroglyphs for all it means to many of us who would rather devote brain space to where to go on holiday, say, or what to have for dinner.
Making Investing More Fun, Accessible and Sustainable
For what they are all doing, one way or another, is integrating our money more seamlessly into our everyday lives, simplifying costs and making things like investment more accessible to those who would sooner try an artisan gin buffet than a stocks and shares ISA.
There is an expansion in the range and quality of financial services on offer, in other words, but the result of it may well be to pare down our finances, to hone them, to get them right, finally, once and for all, so that we can dispense with all the switching, rate-tarting and trial and error customer service once and for all.
Invest in Things You Believe In
Take Moneyfarm and Nutmeg, for example, investment platforms so slick and easy you need only think about investing once your whole life then it’s job done, for a much lower fee than you would pay traditional platforms. Ditto PensionBee, which sorts all your old pensions from former employers out once and for all and puts them into a fund just as likely to deliver the returns, but for a fraction of the cost.
If you want something a bit more au courant, look at innovative finance – a total mouthful but a way to put your money into things you believe in, like local British businesses, via sites such as Crowd2fund, Downing Crowd and Abundance Investment.
We could go on. Starling Bank, Monzo, Loot, Tandem… all “challengers” hoping to entice you from your dependency on the high street banking giant. Yes, into the unknown, but into a journey of easier, simpler, less time-consuming money management (which can also, incidentally, enable you to better match your morals to your money – there’s Positive Impact Portfolios from EQ Investors, Ethex and Triodos if you wish to meet the twin aims of profit, with principles).
What is offputting about all the newbies is knowing which ones to choose, in this sudden storm of choice. But a little research now could reap some serious (to the tune of thousands of pounds) dividends later. Think of choosing your provider the way you might choose an occasion dress – you want it to last years, through the fat and thin days, to be able to dress it up or down and for the quality to continue to impress despite repeated wear.
Slow Investing for a Sustainable Future, Not a Quick Fix
Same with your savings account provider, no? Take my word for it, if you are a slow fashion, slow food type of person, it’s time to apply this to your money, too. Take your time to choose the right provider, the way you would a garment you wish to keep forever, and then, barring some serious of abuse of your expectations on its part, stick with it.
Festina lente, the Italians say. It means make haste, slowly. The slow money message is not do nothing and be lazy. It’s choose who you slow down with wisely, know everything the platform or fund manager is doing with your money, and stick with them over the long term.
Misplaced loyalty used to be a huge problem in financial services – it’s one reason that comparison sites were so welcome when they first appeared – but reversing the trend of switching, of rate-tarting, of taking out more credit cards and more accounts just a little, could be a worthy exercise if it delivers just a little more simplicity, certainly at no detriment to profits or value and possibly leaving you even better off.
Sustainable money – #slowmoney – whatever you want to call it, could change your life. You heard it here first.
Photography Credits – Journalist and EH Mag founder, AJ, takes a slow yoga class beside the Thames @thebingham and deckchairs beside the seaside; both by intern Elisabetta Landoni.
Mikka flower print, slow luxury, Made in Britain dress by Beautiful Soul – www.beautiful-soul.co.uk