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.
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This is what they have imparted. We hope it is of use.
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.
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."
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."
Is it so bad for your children to pay their own tuition fees at university? Not really. "People forget that in the UK the government offers student loans that cover fees," said one ex-banker who is making his son pay his own way through higher education.
Eli Lederman, a former managing director at Morgan Stanley who has reinvented himself as an author, said he's ditched business class flights. "I still go to New York five or six times per year, but now I forego business class to travel in premium economy," he said. "With the new flexibility to plan ahead - which was impossible when I worked for a bank - you can get good fares. And if you're smart about it, the airlines still give you all the perks."
Similarly, Lederman said taking the train is far cheaper when you can be flexible about the times you travel. "When you go into London from the country, the trains are filled with ex-bankers who love to travel off-peak on the discount fares."
This may sound like a small thing, but while they're working most bankers do not iron their own shirts. When they stop working or lose money, they start ironing.
"Now I iron all my shirts," one ex-banker told us. "I've always loved doing this in a Zen kind of way, but I never had the time to do it."
Another banker, who used to work at Goldman Sachs and now runs his own business, said he gets his wife to iron his shirts nowadays. "At Goldman there was a service in the basement where I dropped my shirts off for a fee, but now I ask Jane to do it for me," he said.
"The wife is doing the ironing," another banker told us. "She's not loving it, but she doesn't want to get a job herself so is having to accept it."
The more money you have in your pocket, the more you will want to spend it. "Stop carrying a wedge of cash around with you," said the ex-Goldman banker. "It reduces the temptation to tip people so much."
Giving your children ex-tuition may be time consuming and (occasionally) infuriating, but it can save a small fortune. "One of my mates is spending £250 an hour on tutors to prepare his son for school," one hedge fund manager told us. "I'm spending £35," he added.
In the ideal world, financial services professionals in the City of London would take a Powder Byrne skiing holiday every year. Unfortunately, this can be a little expensive. "I took the family skiing with Power Byrne last year and spent £13k," one hedge fund manager told us. "It was great - they take the kids away from you in the morning and only return them in the late afternoon, but you pay for that kind of attention."
There are cheaper alternatives. This year, the hedge fund manager told us he's looking at cheaper deals with Iglu Ski or Inghams, both of which offer bargain last minute deals. "This is what everyone is doing," he said. "Everyone's going down market - even my mate who's got more money than God."
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When you go on holiday in the summer (or over Easter), don't pay for your accommodation - stay with friends.
"I went to the Maldives six times in a row," said the hedge fund manager. "But last year we didn't go to the Maldives for the first time in six years - we went to stay with friends in New York. I saved around £12k in the process."
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Anecdotally, this isn't happening much yet - but it could start happening soon. "The second home in the country is where you rack up the most serious costs," said the hedge fund manager. "A lot of people I know are talking about ditching the country house. No one's done it yet though."
This too is an option for thrifty bankers who have medical conditions which they've neglected whilst working long hours. Rumour has it that one banker, having been giving notice to quit, decided to address his hernia and knee condition before his private medical insurance ran out and he was compelled to pay for treatment himself - or to use the National Health Service.
Shopping for groceries online is a recognised method of saving money. A study last year by research firm Nielsen found that around 50% of UK consumers now buy their groceries online and that saving money is a big factor encouraging food shoppers online.
"We now have everything delivered by Ocado," said the hedge fund manager. "However, last weekend we went to Waitrose and found ourselves buying a lovely piece of cheese and a huge side of salmon. Everything's much more tempting when it's there in front of you. When we buy online we order less and are more utilitarian."
Now that bankers are working less hard, they are getting home earlier. When they get home early, they have more time to help with food preparation.
"I cook every night now," boasts one ex-trader. "Since I left banking I've become very house-trained. I used to cook a bit, but at the bank I was always out, entertaining clients. That's changed a lot - I'm home early now and can make food from scratch. It's much cheaper."
The streets of London are (reputedly) full of bankers and hedge fund managers on Boris bikes (the rentable bikes pioneered by the Mayor of London). A year after their launch in 2010, it was claimed that the bikes were used almost exclusively by rich middle-aged men. Boris bikes were 'posh boy's toys' argued Ross Lydall in the Evening Standard after statistics showed that most Boris bikers were indeed white men earning more than £50k a year.
Boris bikes have been a money-saving revelation, the hedge fund manager told us. "I was spending £150 a week on taxis until I discovered Boris bikes. Now I cycle twenty miles a day. These days, my wife spends more on taxis than I do."
Putting your spouse to work may not save money, but it will at least bring more money in. The male bankers we spoke to were hesitant about insisting their wives got jobs ("There aren't any out there," said one). But wives themselves were more open to the idea.
"I work," said Adele (not her real name), the wife of a European banker in London. "My husband's bonuses are less, but we still have enough money coming in with two incomes."
Adele said she stopped working for a few years when she had her children and then retrained as a garden designer. "Being self-employed and having my own company means I can fit work in around the children," she said. "We used to have a nanny, but it's not necessary any more - I can work when the children are at school."
In the UK, the government says teenagers can start working from age 13, at which point they can start working 12 hours a week or 25 hours a week during school holidays. In the US, the Fair Labor Standards Act says students can work from age 14 and that 14-15 year-olds can work 18 hours a week during school times and 40+ hours a week during holidays.
In both countries, teenagers can work full time from age 16. One ex-banker told us she'd encouraged her teenagers to get weekend jobs.
Gigi, a member of staff at Knightsbridge-based Salou Dress agency, which buys and sells pre-owned designer clothes, said they have plenty of bankers' wives among their clientele. "People can certainly save money with us, as long as they don't mind having second things and clothes that are slightly out of season," she informed us.
Financiers' wives can also sell their unwanted clothing items via Salou. "A lot of women have a little clear out and cash-in their old jumpers," said Gigi.
If you want to raise the most money through clothes sales, however, it may be advisable to take to eBay. Salou charges sellers 50% of everything that's sold, said Gigi. "You can get someone to sell your clothes far more cheaply on eBay," she said.
The ex-Goldman banker we spoke to say he'd cancelled his Sky subscription. "I was paying £80 a month. Now I just watch the footy in the pub instead," he said.
Finally, one banker points out that you can save a lot of money if you own a car which is both fuel efficient and exempt from road tax. In the UK, a Toyota Prius ticks both boxes. "I swapped a Volvo for a Prius years ago," he said. "I've since saved a fortune in road tax, fuel and insurance."