Entrepreneur Amanda Perry deposits cash into 10 envelopes to stay on top of her finances
Money & Me: 'I use the envelope-method to track my monthly spending'
A self-confessed former 'spendaholic', Amanda Perry has brought her financial life under control using a combination of willpower - and envelopes. Ms Perry, the founder of Vitality, a female business accelerator focused on women and Vital Corporate Solutions, which helps entrepreneurs and freelancers register their businesses in the UAE, fills the envelopes with cash at the start of each month to help her budget. Ms Perry, 42, from the UK, lives in Dubai with her husband and two-year-old son.
How did your upbringing shape your attitude to money?
My mum is a spender and a shopper. She can’t go anywhere without finding something to buy whereas my dad is very much the reverse. He’s very conservative with his spending. So my dad was born in 1940 in the Second World War, when everything around him was being bombed. Everything was scarce and I think it probably shaped and defined his attitudes now. We are not allowed to leave a room and leave the lights on and that’s not a bad thing. And he’s always very environmentally conscious, which also has an impact on how he spends. He doesn’t spend wastefully but then when it’s a holiday or a special occasion my dad’s all out there and my mum reigns him in.
Who did you take after?
Probably my mum. I can’t walk into a shoe shop without leaving with something. Since I have had a family of my own, I have learned to be more sensible with planning. School fees have to be paid for, rent. My husband is more sensible than me and I am adopting some more sensible habits. Saying that, my business has always been different.
So you are a spender?
I was a spender. I have learned to be a saver. If I am on holiday I am like my dad. We have a budget today, let’s spend it all. If I have a budget to spend I will spend it. But I am equally now a better saver. I have a budget to save and I save first. And it’s come from education. I have a wonderful adviser called Rasheda Khatun Khan who sits with us periodically and makes sure we are on track. She has helped us enormously, because I think it’s easy in the Middle East to get into that spending cycle.
How much did you get paid in your first job?
I was straight out of college, 20 years-old. I was working for Ernst & Young earning £10,000 (Dh50,529) a year. That was good for teaching me about money as well. My dad was good but I didn’t always listen. Ernst & Young shaped that.
Where do you save your money?
Being from Guernsey and the Channel Islands, I save my money there. But a lot of it is going back into my business. I set up my first business eight years ago and set up a second business a year ago. At the moment surplus and savings are being invested. Obviously there is our little nest egg as a family should anything happen.
Do you budget?
Yes, we keep a book in the top drawer of our dresser at home and inside are different envelopes with different slots. One is for the gardener, one is for the dog food and so on. It’s the budget. At the beginning of the month Dh500 goes in this envelope, Dh500 goes in that envelope, even down to the coffees that I have out at meetings. I take money out of there and put it in my wallet for going out.
How many envelopes do you have?
About 10 for the month, and there is a little luxury one as well for treats. The savings go away and what we spend for the month is in cash in the envelopes, such as money for weekly food. Some things are weekly, some things are monthly. So in the first section of the book is the food grocery household, and that’s divided into four. In the second section it’s petrol and that’s for the whole month. The third section is dining out and luxuries, the fourth section is the gardener. It gets filled up at the start of the month. And if I know I am going to the supermarket on the way back from the school pickup I would have taken Dh200 out, but I don’t take it all because otherwise I would go 'ooh' and buy that, that and that, and before you know it you have spent Dh1,000. I go to the supermarket with money to buy what I need and leave with what I need. We have had to do that, because my husband and I both run the household. It’s not only me doing it, we both do our share. If we didn’t do it that way we would lose track of things.
What’s your biggest financial milestone?
I think probably it was having the confidence to build the team around me, because having their salaries as my responsibility took me a long time. When I was building the business there was a big gap between needing people and doing it, because it took me a long time to get over that mental hurdle. Members of my team might be the sole breadwinner of their family.
How many employees do you have?
Eight now, with myself it is nine.
What’s been your best investment?
Investing in my business, investing in myself and investing in my people.
Have you ever had a month when you feared you couldn’t pay the bills?
Yes, absolutely. It happens all of the time, not necessarily because the situation changes. It is a fear and sometimes it’s not always rational.
Do you have any financial regrets?
I don’t regret anything, not just financially. There is no point. Learn from it and move on.
Do you plan for the future?
Probably not as much as I should. I treat my business as my retirement plan. Obviously we have our retirement plans organised with our adviser on the financial front, but when I look at what my friends have done I think 'wow, they have really gone to town'. I met my adviser a long time ago. I didn’t want to necessarily save over here but I wanted to make sure that things were looked after and Rasheda just spoke absolute sense to me. She wanted to educate me. She has helped us out a lot, just to understand what’s possible.
What luxuries are important to you?
Travel. I love anywhere new and I love revisiting old places as well. I love experiences. One of the great pieces of advice my mum gave me was to marry someone you want to travel with. And luckily my husband likes to do the same things.
What percentage of your income do you save?
We have three different savings – there is our ‘savings’ savings, our school fees savings and then we save for the rent. The personal savings are about 20 per cent a month. Then about 15 per cent for the rest, something like that.
What car do you drive?
I have a Range Rover, which sounds extravagant, but it’s not. I’ve had this one four years. I bought it when it was a year old.
Do you have a credit card?
No, as a self-employed person I get a funny look if I ask for a credit card, so I use my husband’s. I think we use it to buy flights only. Everything else comes out the cash envelopes. If it’s not in the envelopes, we can’t have it.