Like most families, chances are you’ve had a few arguments over the Monopoly board. But according to financial expert Peter Komolafe, playing the love/hate game can be key to instilling positive financial habits in our children. Just like falling lucky on landing on Mayfair and Park Lane could score you a Monopoly victory, acquiring valuable assets in real life is so important for financial security and this is something Peter believes we should be teaching kids before their seventh birthday.

Most of us are feeling the squeeze from all sides at the moment – with rising energy, food, mortgage, rent and fuel prices. There’s a lot of financial pressure around us and while, like in Monopoly, we can’t change the card we’ve been dealt, Peter believes we can make small changes now for a big impact in the future. That means making sure the money we do have, goes as far as possible.

Peter said:

“There’s a lot of shame attached to financial struggles because we’re adults and we feel like we should be making good decisions. We didn’t get taught this in school so how are we supposed to make decisions about something we were never taught in the first place?”

Put simply, it’s all about budgeting and this can be done by categorising your expenses.

Pot 1

The essentials, - the mortgage, rent, council tax, electric, gas, water. Take care of this pot because everything in there is non-negotiable. We absolutely need to pay these things in order to survive.

Pot 2

These are the non-essentials but for most people, it’s the stuff that makes going to work worthwhile. This is the things you enjoy doing. It may be gym memberships, cinema trips or a day on the golf course. It is possible to trim down costs here but weigh up the impact it will have on your wellbeing.

Pot 3

The last pot is an allocation of your income that perhaps goes towards holidays or future goals such as buying a property. More and more people no longer have this pot due to the increasing squeeze.

There’s an extension of this pot, which Peter recommends to have and that is for emergencies – like your boiler breaking or your car needing new tyres. Again, this is something a lot of people no longer have.

But as someone who struggled with debt for 15 years, having moved back from Nigeria to the UK at 18 with just 50 quid in his back pocket, surviving and saving while experiencing hardship, is something Peter is passionate about.

Peter said:

“We know from research that if you’re worried about money you’re 4.1 times more likely to be suffering from anxiety. I remember all too well the panic attacks I would get whenever there was a letter through the door or a withheld number on my phone.”

The question is, how much do you need as an emergency fund? And there’s a mathematical answer that you can come to, which is to make list of all the things you have to pay for and times that number by three, six, and nine and so on. Depending on what you think is going to be comfortable within that range, you end up with quite a large and unachievable number. But Peter believes the psychological impact of having an emergency fund is way more important than the actual number itself. It could be as little as £50 you need to feel less anxious and more in control.

Debt is a big issue for a lot of people. There are lots of things you can do to help you manage your debt, such as prioritising the ones with the most interest or consolidating them onto a personal loan, but the first thing is acknowledging you may have an issue.

Peter said:

"Helping people is one of the most rewarding parts of what I do. Sometimes people just need to know that they’re not alone in what they face and I’m an example of how you can come out on the other side. The biggest challenge is getting out of your own head and what you think being in debt says about you. We think it defines us but it doesn’t."

For more financial advice, have a listen to Peter’s podcast Conversation of Money, which you can find on YouTube. You can also pre-order his book on Amazon.

Check out Peter's eight top tips to help you gain control of your finances.

  • Top tip 1 - Use an app to help you with budgeting. Moneyhub is a good one and you can claim 6 months free!
  • Top tip 2 - Work out what your essentials are and prioritise these. Cancel unused subscriptions
  • Top tip 3 - Do you have an emergency fund? If not, start one now
  • Top tip 4 - If you are struggling with debt, get help. Talk to a friend or professional body like StepChange
  • Top tip 5 - Don’t let missed payments or defaults affect your credit score
  • Top tip 6 - Financial awareness starts at a young age. Try and instil good habits with the children in your life
  • Top tip 7 - Consolidate any debts where possible so you’re only paying one lot of interest
  • Top tip 8 - Make small changes for big impact

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