Twenty money-saving tips from bankers and their wives

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Twenty money-saving tips from bankers and their wives

by Sarah Butcher
5 days ago

If you want ways of saving money, an investment banker may not seem the best source of advice. Believe it or not, however,  bankers are changing their spending habits as their bonuses shrink and become allocated over several years. Both bankers and their once free-spending wives are suddenly becoming familiar with the art of thriftiness. For your benefit, we’ve spoken to a selection of current and ex-bankers and to their spouses about how they’re cutting their personal spending.
 
This is what they have imparted. We hope it is of use.
 
1. Go on a clothes diet
 
So you think that you, or your spouse, spend nothing on clothes? Think again. “I didn’t think I bought many clothes,” said Heather McGregor, a former banker-turned headhunter (who places ex-bankers into investor relations roles with search firm Taylor Bennett). “But last year I stopped buying clothes for six months and realised how much I had been spending – just on a pair of shoes or a scarf here and there.”
 
In some cases, spending on clothing can be extreme. In 2009, Marie Douglas Davis, a former investment banker and Swedish countess argued that she needed $4.5k a month to spend on clothes during a divorce case.
 
2. Involve the entire family
 
Cutting spending is not simply about reducing your own outgoings. ”When I quit banking more than a decade ago, we had to challenge our whole family to live on less,” said McGregor. “it is hard to make big life changes unless everyone in the family is encouraged to help.”
 
One ex-trader who joined a small hedge fund said his children have been told there’s less money around and – surprisingly – have accepted this fact. “The only one who doesn’t seem to get it is my five-year-old,” he said. “The older ones have been told we can’t afford all the things that we used to have and they seem to get it – if only because all their friends have been told the same thing.”
 
3. Put your children into the state school system

With day fees anything from £5k ($7.6k) a term in the UK and boarding fees anything from £8.5k a term, private schooling may well be the biggest recurring expense of any well-paid banker. In New York, popular schools like Horace Mann charge $39k a year just for kindergarten.
 
“If you have a well-paid job in banking and the biggest single drain on your future resourcing is schooling, then you may need to make some difficult decisions,” said McGregor. “It’s not simply that your bonus is worse than expected this year, it is likely to be worse than expected for the rest of your working life. This is the new reality.”
 
One ex-banker said he took his two sons out of boarding school and put them into the state school system: “They adapted surprisingly well.”

Hmmmmm. I dunno..........