Four Financial Mistakes I Made as a Personal Finance Editor

Even though Jessie Hewitson writes about money for a living, she’s learned from a few mistakes over the years.

December 4, 2024 12:00 p.m.

I started writing about personal finance about 18 years ago. It wasn’t by choice: I was working for a newspaper and was transferred without a chance to work in the Money section, run by a team that seemed unforgivingly intimidating.

I wasn’t in my right mind. So much so that a few months before the move, I had a meeting with my accountant – I was self-employed and had one last tax return to complete before joining the newspaper. He suggested I put money into my pension to reduce my tax bill. I laughed in his face – who the hell would save money for later when they could spend it now? And taxes?!

So it’s fair to say that I wasn’t a natural fit for the team. But I was learning quickly, at least. And over time, I started to understand pensions, investments, savings, mortgages, taxes, the whole shebang. To my surprise, I found I was pretty good at explaining it. I may not have felt naturally part of that world, but I was able to translate it for my fellow foreigners.

Having made my own mistakes, I was able to empathize with our readers and offer real-life advice.

With that in mind, it only seems right to share some of them and what I’ve learned along the way.

I hope you read this before making the same mistakes. If not, at least you’re in good company.

Mistake number one: only starting retirement at age 35

It was late, and the only reason it didn’t was because of the introduction of auto-enrolment in 2012, when companies had to enroll their employees into a workplace pension scheme – and contribute to it – unless the employee opts out. The genius of this system is that it takes more effort to do a stupid thing.

So, thanks to the fact that I could be reasonable by doing nothing, I now had a pension. But I needed to make up time. This is why I have always considered the golden rule of retirement savings to be a minimum. This rule involves taking the age you started saving, dividing it by two, and making it a percentage – that’s the amount you should save.

To me, half of 35 is 17.5 percent. I’m currently at 16 percent, but I saved up to 24 percent when I had more money available to make up for lost time. Writing this reminded me to increase my payments by two more percentage points.

Mistake Number Two: Taking Out a Large Mortgage Without Planning to Pay It Off When Rates Rise

It was 2021, my husband and I bought a house in North London with a mortgage rate of 0.99%. A few months later, the Bank of England began a cycle of the fastest interest rate hikes ever seen. We took out a five-year mortgage, so we haven’t yet had to deal with the challenges of remortgaging.

But when we do, yeah.

Have I stopped and thought about how much of my disposable income would be eaten up when rates rise? No, my only goal was to be able to beg and borrow (even though we limited stealing) enough to buy it.

Thanks to buying the house, I have no savings and a lot of our cash goes towards the mortgage, leaving us a bit of a hand to mouth even without the inevitable rate increase of interest on the horizon.

But to be honest, if I had thought about all this more seriously, I would have still bought the house. It’s close to good schools and house prices haven’t been too affected by the 2008 financial crash, Covid, Putin and inflation, so it’s hard to see at this stage under what circumstances we wouldn’t couldn’t sell if we needed to and not lose money.

We can’t always predict the future and at least being on the property ladder provides some level of security.

Mistake Three: Ignoring Investment Fees

Don’t be like the old me and settle for this, thinking you’re not investing and therefore it doesn’t concern you.

If you have a pension, you invest. And for each “fund” you invest in (a fund is a place where you put your money, it is pooled with that of other people and spread across a wide range of investments; your pension will be invested in different funds ), you will pay a fee.

I don’t really know what fees I pay for my pension funds, and when I invested in a stocks and shares ISA as part of my savings I didn’t properly look at the fees either . I’ve always just looked at performance – that is, how much this fund has increased in value over the past year – when in reality I should be much more careful about what I’m paying for this privilege.

An additional 1% charge on your investments seems like a small amount, but over 30 years of investing, it equates to half of all your profits, swallowed up by a company that may not have done much to earn this amount.

I now strive to be more aware of fees – and take action if necessary. This could make a big difference to my future retirement pot.

Mistake number four: living in my overdraft

I have a fairly large overdraft facility, which I use fully almost every month. It’s expensive: I’ve probably paid thousands (dozens?) in fees over my lifetime.

My central problem is that I live beyond my means. That’s because a) I’m terrible at budgeting – there’s something about setting a rule and sticking to it that I find very difficult. And b) I’m often too busy.

This is having an impact on my finances. I’m paying more for childcare, buying more costumes and kid gifts at the last minute and the “screw it, let’s just get takeout tonight, I deserve it because I made 20” decisions. 000 things and it’s only 4 p.m.

I already know what my New Year’s resolution is for 2025: to do 20% less and watch the money saved flow in. Not being too busy in a culture that fetishizes busyness is the ultimate money-saving tip.