Mouthy Money catches up with blogger contributor Neil Bage, behavioural psychology and finance expert and chief behavioural officer, Murphy Wealth, on saving a human life, breaking money habits, and why thinking about winning the lottery actually matters
1. Tell us a bit about yourself
I was born in the mid 1970s in Hartlepool, a port town in the North East of England. When I left school, I decided that I wanted to be a PE teacher and achieved coaching awards in basketball, hockey, football, and swimming. I also qualified as a lifeguard and worked part-time as one for a while.
I saved an elderly man from drowning once, which at the time was terrifying, but in hindsight, was such an amazing thing to do. It was while studying PE that I was introduced to two subjects that would stick with me. Human biology (physiology) and sports psychology. I still use lessons from these in what I do today.
2. What is your biggest passion in life?
It’s taken me to the age I’m at now to figure this question out. Over the years I’ve flitted between things that I felt passionate about at the time, but realised there was no deep passion there.
One thing I do absolutely love doing is video editing and creating animated video that explain complex subjects in easy, digestible messages. It’s a fascinating hobby for me, and I’m always learning.
But for me, my biggest passion, which has always been there but at times was neglected, is the life I live with my wife and little dog. I live on the Isle of Wight and have found that sitting on a beach with a BBQ, sipping a glass of wine and watching the sunset, gives me a deep, emotionally satisfying feeling that can’t be bought.
The simple things in life are often overlooked, but in reality, can bring us so much pleasure that they eventually become a passion.
3. What one personal finance tip would you give a younger version of yourself?
Start soon and start small. When I was younger I assumed that I had to wait until I had £x earning before I started to save.
But the reality is that it’s not about the money. It’s about forming the right habits. So saving even £5 on a monthly basis creates a habit that you can expand on as time goes by.
If I could back and do it all again, I’d start saving money as soon as I started earning it, and don’t get started on the subject of compound interest!
4. If you had to stick to one rule around money what would it be?
Similar to the previous answer. Human beings are creatures of habit. We get up each morning and perform a well-practiced routine. Toilet, shower, teeth, hair, deodorant, pants, socks, trousers, shirt. The same order for me every single day. And these habits are tough to break.
Creating them is also tough, but we can help by starting building micro-habits; small, seemingly insignificant changes that eventually compound to deliver great benefits. So saving even £5 a month, with compound interest, has both financial benefits, but also psychological and behavioural benefits.
5. What’s the biggest personal finance issue you think people face today?
It has to be the focus people have on those instant gratification moments. This of course is exacerbated by the prevalence of digital money which means that saving money becomes hard simply because spending money is so easy. In years gone by, if I wanted a new pair of trainers that I’d seen in a magazine, I had to physically go and buy them. I had to physically exchange cash. The whole buying experience was exactly that, an experience.
Not now! I pop on Amazon, click a few buttons, and a day later a pair of new shoes are in my house. This creates a real problem for people trying to create savings habits because the temptation to spend, and the ease at which I can spend, creates an excuse to break the habit without any real challenge. It’s why I’m such a massive fan of automatic savings with apps such as Chip. It removes the temptation.
6. What would you do if you got to be Chancellor for the day?
This is a tough question because the list is long. However, I suspect many of the things I’d do would not be financially feasible.
Ultimately my biggest bugbear is the unfair society we live in. If I could work with some of the brightest minds in the country and figure that out, and then create a financial plan to make it happen, that would be a good use of my time, I think.
7. If you won the lottery what would you do with the money?
I’ve given this a lot of thought over the years as it forms the basis of a behavioural finance talk I give. The reality is, a lottery win of £5m would allow me to give up relying on an income, and focus my time on helping others less fortunate through charity work. That would be through a time commitment which would be easier since I no longer needed to work.
If I won the Euro millions (it’s £176m at the time of writing!), I would keep aside the £5m as just mentioned, but gift £1m a piece to 171 charities. Just think about the difference you could make to thousands of lives by doing that. For me, that would allow me to die knowing I’ve left a legacy, but more importantly, that I made a difference.
Neil Bage is the chief behavioural officer at Murphy Wealth and the founder of behavioural insight’s fintech company Be-IQ. He is a specialist on the sub-conscious behaviours that drive our decisions, and has a reputation for bridging complex scientific theory with real-world understanding and application. As well as being a keynote speaker, Neil is also the creator and host of the Bitesize Behaviour Podcast.