Money and Me: Diane Maxwell

Diane Maxwell started her working life as a hairdresser.

Diane Maxwell, Retirement Commissioner at the Commission for Financial Capability talks about her relationship with money

What does money mean to you?

When my daughter was little and I was a single parent I scaled back my work and paid myself in time not money. Sometimes in the morning we would accelerate past her day-care centre, just keep driving and spend the day together instead. So we had time, but I would wake up at 3am worrying about how to pay the bills. It comes down to making the best use of a limited supply of either time or money, or both.

What did you learn about money from your parents?

Growing up we didn't talk about money much. Because of my job I talk about it a lot with my children, possibly too much, but they are the generation who will face a very different retirement from ours and I want them to be prepared.

What was your first paid job?

I had a Saturday job at a hairdressers in London at 13. I would shampoo clients, sweep up, put in rollers (it was a long time ago). I had to keep up the facade that I was 14 which involved a complex litany of lies, but I caught the bus home at the end of the day with six pounds in my pocket and a Farrah Fawcett blow wave. I used my first pay-packet to buy a Hawaiian shirt, and so began many years of blowing my salary on clothes.

What is your biggest money mistake?

I sold my flat in London before property prices took off. Every now and again it rises in my throat like a kind of financial indigestion and puts me in a really bad mood.

What are your top three money tips?

Problem with money tips is that we can 'know' them superficially, but they don't really mean anything. They always seem like advice for those 'other people' who are good with money. Then one day the penny drops and they suddenly make sense. Here's the ones that now make sense to me.

Understand the power of 'little and often'. A coffee, a muffin, a lipstick, individually they seem like nothing, add them up and suddenly they equal a family holiday.

It works the same the other way. KiwiSaver is a great example where people look at it after a couple of years and say 'how did that happen? I've got savings.'

Planning your money is boring, having money is interesting. Your aversion to the first one robs you of the second one, and you need to understand how the two are connected.

Don't be fooled by what everyone else seems to have. As Warren Buffet said, "You don't know who's swimming naked until the tide goes out". In other words, people may look wealthy, but really they are just deep in debt. Spend at your own pace, with the numbers that work for you.

If that means you drive an older car than your neighbour, who cares. It's a newer car than somebody else's.

See video: Closing the Financial Literacy Gap - Diane Maxwell: