Maddy shares her thoughts on how she manages her money and some of the lessons she’s learned.
Madeleine (Maddy) Baker
LYNN WILLIAMS: Hello and welcome to the Cherry Blossom Café Podcast. I’m your host, Lynn Williams, and this show is all about uncovering life mysteries about money. If you’ve ever wondered how other people manage their money or the money mistakes they’ve made, well that’s exactly what we’re going to talk about. We’ll uncover these mysteries and more.
On this episode, we talk to Maddy Baker. Maddy is a multi-lingual procurement professional with more than a decade of direct and indirect sourcing and HR experience. She has a proven track record of achievement with global and regional organizations through outstanding stakeholder and supplier release management, strategy, process development, and implementation.
She is also very generous with her time by serving on different boards and sharing her wisdom with women entrepreneurs as well as volunteering with charities close to her heart. Today she is going to share with us how she looks at her money. We’re excited to have you on the show, Maddy. Welcome.
So thanks, Maddy, for being here. It’s great having you here. Thank you for taking the time.
MADDY BAKER: Thanks for having me.
LYNN: So how we’d like to get started is to ask you what was your first job?
MADDY: Well, I grew up in the UK in the southeast of England, and I lived in one of those little villages that had a shop at the top of the road.
MADDY: So I have a brother that’s about 18 months older than me, and my parents just treated me the same, and we got a monthly allowance, and anything else was really up to us. So of course I did things like babysitting, but I think my main first job was working at the shop at the top of the road. And my brother already worked there, and I’m not quite sure whether I was on the books or not, but I used to get paid two pounds, which is probably about three dollars, an hour to stack shelves and … It was pretty boring and mundane, but strangely satisfying at the same to work.
And I loved getting money and having my own money, and there was something very nice about getting that little envelope once a month or at the end of the week that had … Even if it was only, you know, $15, it was still money that I could then go and buy myself a CD or a new top or something. And so ever since then, I’ve always worked, and even when I was at university, I worked in a … I ran a bar at the university and have always done other things, so-
LYNN: Wow, that’s great.
MADDY: … I’ve had money to supplement my studies and reduce my student loans, that kind of thing.
LYNN: Well, and those … Both those jobs are public-facing, so you have to deal with the public, and those are fantastic skills to learn at a very young age.
MADDY: Yeah, yup, definitely.
LYNN: Which is awesome.
MADDY: And because it was a small family-owned business, actually even when I was 14 or 15, and my brother being there as well, there was a couple of times that on a Sunday night it was me and him running the show, and we were the ones responsible for working at the cash register, so I think from a financial perspective, it was also a really good introduction to counting money and how much things cost and understanding that a pint of milk cost a certain amount or six eggs or whatever, and seeing everyday people coming to the store and talking about what they were buying and why they were buying it, and at some points, people struggling with money more than others or saying that it was their last pennies buying a bottle of wine or whatever it might be.
LYNN: Yeah. That’s fantastic. Great insights into life and getting started.
MADDY: Life in rural England.
LYNN: Yes. So then did that help you, or how did you get started in your profession today?
MADDY: So I work in procurement, and I knew that I wanted to work in business, and I was fortunate enough that I’d traveled quite a lot, and between school and university I actually taught at a township school in Swaziland in southern Africa, and so I knew I wanted to work in business and I wanted to work internationally, because I love traveling and all that kind of thing. So my theory was if I studied languages, I’d be quite employable. So I studied French and Spanish, and part of that was … Part of my studies was studying in France, and I studied in Mexico for a year.
LYNN: Oh, fantastic.
MADDY: And it was kind of by accident that I started in my profession, because I started working for a pharmaceutical company in the UK, and it’s quite common in the UK that when you finish university, you look at all these leadership development programs, and most big companies have them. And quite accidentally, I got approached by a large international company who were linked to the charity that I’d worked for in Swaziland, and they came to me and they said, “On the basis that you’ve done something like this, we think you’re the kind of person that we want in our company.”
MADDY: And so because I’d done a degree in languages and nothing that specific, I could apply to procurement or finance. And actually, it ended up just being the VP that was talking about procurement made it sound really exciting and a good mixture of skills, and that’s how I ended up doing what I’m doing. And it turned out to be a good fit. But I laugh, and I tell people sometimes that I did look up what procurement was on Wikipedia the night before my interview. But it worked out okay.
LYNN: That’s awesome. Fantastic. It just goes to show that we often just don’t know, and it is the opportunities that get presented, and that you take those opportunities in order to then take the next step.
MADDY: Yup. Absolutely. Yeah, and I mean, I definitely believe that one thing leads to another. Even living in Vancouver and moving to Canada, it’s the chain of events that you can’t predict when you were younger, and …
LYNN: For sure.
MADDY: Even meeting you was through getting involved in supplier diversity from a procurement perspective, and signing up to help support a women in business organization in Vancouver, and the rest is history.
LYNN: Which is great. Great connection. So once you started gaining momentum in your career, how did you start to handle your money and your increasing wealth?
MADDY: So I would like to think that I didn’t, really. I lived in London in the UK for the first five years, and even though I was earning decent money, it really didn’t go very far, and by the time I’d paid rent, and … I can’t say that I had an inactive social life. There wasn’t really much left over, and I did eat into my savings a little bit that I built up at various points. And every time I had a holiday in the summer, I didn’t necessarily work. I thought, “This is brilliant. I have two months off. Let me go and travel around southern Africa,” or “Let me go and travel around Mexico.”
So it always … When I started earning money, I think it always seemed to add up at the end of the month, and I was lucky that I went into a role that gave me a salary that I didn’t really have to think about what I was spending. But at the same time, reflecting on that now, it probably meant that I wasn’t as good with money as I could have been, because it wasn’t really conscious thinking, “I’m gonna spend this much money,” or “I probably shouldn’t go out that night.” Although, I think because of the financial skills and the things that my parents had instilled in me, it wasn’t like I was frivolous, and I didn’t spend that much money on lots of different things. I always paid off my credit card at the end of every month. I never asked my parents for money. So it wasn’t like I was acting irresponsibly, financially, but I don’t think there was any real conscious thought into it.
And then as time went on, I think as I got more senior and my salary increased, I tried to make the most of things that were available to me. So I always think if I have money in my hands, I’m more likely to spend it. So actually the way that I saved and started growing my shares and my investments was just by taking advantage of the fact I worked for a global company that had share schemes that matched certain percentages of your salary and pensions. And so it wasn’t necessarily conscious, it was just, “Okay, the maximum that they’re gonna match is this much, so I’ll put this much in,” and steadily, I realized that it was building up what I saved, even though in my mind, my bank account was still relatively empty.
LYNN: Yes. But that’s two things in that that I hear is one, it was instilled in you from a very young age to live within your means.
LYNN: So you did everything that you did, your travels and your taking time off and living in London within your means, which is superb, which is a fantastic place to start. So you didn’t get yourself behind before you had to get ahead.
LYNN: And the second thing was is you took advantage of free money when it was offered to you. So when there was workplace savings or workplace matching, then you took advantage of that, and that still exists today in various places. So for example, when people have kids, there’s the registered education savings plan, which the government matches with a grant which is free money. So taking advantage of those free money offers is such a great lesson that we tend to forget. Because we may even take it for granted because it’s free money.
MADDY: Yeah, definitely. And it doesn’t feel like money at the time. You just sort of sign up and think, “Oh, it’s four percent … If I put four percent in, they’ll match four percent, but actually, it really does add up over time, even if you feel like you’re contributing a little bit month by month.”
LYNN: Yeah, and I often talk about it as a tap dripping. So one drip, like that one four percent doesn’t feel like a lot, but a tap dripping over time can create a huge mess and a huge flood, that then is like your money.
MADDY: I’d like money to be a huge flood at some point.
LYNN: A huge flood eventually. Okay, awesome. Yeah, well it sounds like you’re well on your way, so that’s fantastic. So during that, was there any big money mistakes that … You’ve commented on a couple of things that you thought of as things you learned, but was there anything that you then said, “Oh, that was a real regret or a real mistake”?
MADDY: I don’t think necessarily mistakes. I mean, I’m fortunate that, I think, because I had some degree of financial responsibility instilled in me, I’ve never not been able to pay off my credit, and I’ve never run up a debt that I don’t feel that I can pay. So that’s a positive, but I do think that, sometimes, when I think about … I moved to the US for a couple of years, and because I worked for a large pharma company, I got quite a big bump in salary. And I had a great time. Went out for dinner a lot and traveled a lot and went to quite a few different US states. And sometimes I think “Where did that money go?” And it wasn’t that I was saving in parallel. I just could’ve saved more.
So sometimes I think maybe I should’ve been a bit more conscious of what I was spending and therefore probably saving more, just because by the nature of thinking about it, you’re more aware of it. But at the same time, I don’t … I wouldn’t take back the time that I’ve spent on doing things that I enjoy, and I think one thing that I love about your approach is really thinking about what your fun money looks like and what your … And building your financial plan to adapt to what you want for your life.
LYNN: For sure. Yeah.
MADDY: And things that you and I have talked about as we’re building out my finances or even just making sure that I’ve got a pot of money that enables me to fly back to the UK twice a year, which isn’t something that I actively think about, but it adds up. That’s probably two, two and a half thousand dollars if I want to go home a couple of times a year.
LYNN: Yeah. Exactly.
MADDY Baker: So that’s important, and I think things have become more complicated for me personally, because I’ve lived and worked in the UK, US, and Canada. So I’m now in a position where I have three bank accounts, three pensions, three share accounts, and it was only relatively recently when I moved to Canada met you, and I started really planning and thinking, “Well, what does that look like?” And “Should I be moving things around?” And “How do I consolidate that?”
I think another couple of things. I think sometimes I’ve been too nice, so I think because I have a good job, there’s sometimes that assumption that I will fly home for weddings or whatever hotel people are staying in is fine, and I think sometimes I’m overly generous in terms of gifts or if people are visiting, I buy a lot of dinners, because I think, “Oh, they just paid a flight to come out and see me.” But then when I pay my flight to go home, no one’s buying me dinner.
So I think I’m trying to learn to be more cautious, and I want to be a generous, and I don’t not want to be that person, but I also want to be conscious that I don’t always have to do that to a fault. And then I suppose the final thing is not necessarily a mistake but I haven’t necessarily planned for life events. So whereas a lot of my friends got married in their 20s or early 30s or had kids, they were kind of forced into a situation where … I don’t know whether they planned for it or not, but that was a heavy financial responsibility, and I haven’t done any of those things yet, so I haven’t necessarily needed to plan for that or work around it, which in some respects is good, because I probably would’ve spent different amounts of money 10 years ago than I would spend now on a wedding. But at the same time, I haven’t had to think about it, but I also haven’t planned for that that much.
LYNN: Yeah. No, I understand. It’s also when you’re forced into those situations that we often take a harder look at what we’re doing. And often, age also has a factor in that, particularly when you’re thinking about retirement. It’s often when people reach their early 40s, it seems to be the trigger point that people start to think, “Oh, I’ve got [crosstalk].”
MADDY: “It’s sooner than I thought.”
LYNN: Yes, exactly. “Oh no, there’s 20 more years. If I look back over those 20 years, and I do the same thing to get to those next 20 years, I’m not gonna be ready, so how do I shift things around?” But yeah, it’s a very good point. So in all of this, have you developed an investing philosophy?
MADDY: I think, as I said before, my philosophy is as simple as get it out of my hands quickly, and I do think that if I haven’t seen it, then I don’t miss it. So I was promoted last year within my organization, and you and I had a conversation to say, “My salary’s gonna increase by this much. What else can I do with this money so that, actually, the same amount of disposable income I have in my bank account is the same, but I’m building a savings fund elsewhere?” So I do continue to maximize the percentage that I can to put into my pension within my shares, within the company that I work for, and increasingly investments, as well.
So I try to do that. I’m also trying to learn to be more financially confident, is something that … I do think my parents gave me a strong foundation, and I’ve leveraged different opportunities available, but sometimes it feels like I’ve accidentally found myself in a good position, so I think I am trying to be more confident in what investments look like, and the fact that you don’t have to be an expert at all these things, and the jargon terms aren’t that complicated if somebody explains them to you in layman’s terms.
LYNN: Yeah. Very good point.
MADDY: Yeah. And I think the final thing is I always pay off my credit card. Every time I get paid, I go into my bank account, and I set it back to zero, so I never pay any interest on it, and I think I’m very fortunate that I was in that position, and I managed to pay off my student loans a few years ago now, so partly because I haven’t bought a house or a flat or an apartment or anything, but I don’t have any debt at all, which I think is quite unique for somebody in my position.
LYNN: Definitely. And paying off debt and staying out of debt is as much of an investment as being invested, because if you think if you’re paying five or 10 or 20 percent interest on a debt, you get that debt paid off, you’re actually giving yourself that five or 10 or 20 percent in order to be able to do other things with, so it’s a fantastic philosophy. I think it’s a really good point, too, about your financial confidence and building financial confidence, because so much, to me …
And this is part of what is important to me, is that the finance industry so much is talking to themselves, people who understand the industry, people who feel comfortable in the industry. And I came into this industry taking over my dad’s practice, and having to have all those frustrations, those same frustrations as people because it was more of a family decision as opposed to, “Oh, I really want to be in financial planning and investing.” And that’s really important to me to take the opaque nature of some of these things and make it really plain language. But it isn’t, like you say, all that complicated, but it feels complicated because it’s a whole another language.
MADDY: Yeah. And it feels scary. And I think to myself, “I’m degree educated.”
LYNN: Yes, exactly.
MADDY: “I’m a director. I manage a team of 18 people. If I find it this confusing and hard, there must be people that are way more confused than I am.”
LYNN: Yes. And you also are comfortable numbers, given procurement.
MADDY: I analyze numbers and balance sheets and do financial evaluations on companies that we’re spending money with every single day.
LYNN: Yeah. Exactly. So yeah, I agree. So I think the industry can do a lot better in helping people make it not feel so scary or feel like … As people often say to me, “Oh, I feel like I’m putting my money in the lottery when I put it in the stock market,” and that is the furthest thing from the truth, but unless you understand or have someone you can talk to about it, it’s very frustrating to take that … And scary to take those first leaps. So yeah, well done for making that a kind of a cornerstone of your investing, is just feeling more financially confident and willing to take a look at it.
So we also like to talk about your take on giving because we really have seen, and we really believe, that people who are willing to give, either of their time or their talents or … Which we also say their treasures … also have a less hold on their money, and money flows much more easily and generously in their lives. So do you have a take on giving, philanthropy?
MADDY: Absolutely. And I think it’s always been a big part of my life, and when I talked about living in Swaziland, and I was teaching 85 grade four pupils in a township school, and that was all voluntary. And I’ve always done a lot of voluntary activities, so I think in terms of giving, I more formally give back with my time, and I’m involved in a number of different charitable organizations and sit on a couple of boards. I don’t …
And when you asked me this question, I actually paused and thought, “Am I doing something wrong here, or should I be doing more?” But I don’t necessarily have any regular giving, but I like to donate to causes that I care about, and I like to be able to donate to friends and family when they’re participating in charity events or supporting things, whether it’s November or someone’s running a marathon or there’s an event going on at work.
But I don’t have any regular giving, but I think because of that, when those things happen, it’s not just $10 here or there, but I feel like I can give somebody $50 or $100, and I probably should give myself a limit, but I also think just by ad hoc giving donations, I sort of keep track of it in my head and feel that it’s appropriate to what I want to do. So I guess it’s a mixture of giving in terms of my time, but also giving in terms of contributing to causes that I care about and my friends and family care about.
LYNN: Yeah. And I think that’s really a valid point in that you’re thinking about the causes that are important to you and wanting to contribute to those, but you also do give a great deal of time to support organizations, and that’s a really important factor, as well. Because organizations need that support.
MADDY: I also like to think about where the money’s going. I remember … I don’t see it as much in Canada, but in the UK, when you’re walking along the street, you often get people that stop you from a big charity that say, “Hey, sign up to giving $10 a month or $20 a month.” And they make a lot of money that way, but also, if you look at the portion of that money that actually goes to what you care about, often by the time you’ve taken all the overheads out, it ends up being 40 or 30 percent.
I think one of the things I like to do is give more directly where I can see the impact of my money, so even donating to the school I volunteered in in Swaziland where I know that there’s something tangible that I can see with what I’ve donated or what I’ve raised money for. Or I ran the London marathon for the charity and raised money for an organization that I cared about. I was fortunate enough to … I’ve run the Dublin marathon for another charity with the hole-in-the-wall gang, which was started by Paul Newman. And there’s a range of different camps for families and children that have been affected by childhood cancer around the world. And something like that I feel much more confident giving to myself, and also asking friends and family to give to, because I have participated in something where I’ve seen the benefit of what happened.
LYNN: Wow, giving and getting fit. That’s amazing. Or staying fit.
MADDY: Yeah. I’m not sure I wanna run another marathon right now, but I’ve done it now, so I can tick the box.
LYNN: Yeah. So where you are now, looking back, is there one piece of advice that you’d give your younger self about money?
MADDY: I think partly just don’t worry so much and don’t be so scared. I think I was always that person that you get your monthly bank statements, and I wouldn’t open it. And then a few times, my dad would call me and say, “Oh, you’ve got a letter at home, and they’re gonna charge you $30 because you’re overdrawn.” And I wasn’t actually overdrawn. I had money in a different bank account. I just wasn’t very good at keeping track how much was in my current account versus my savings account. So I probably paid the bank more money than I need to in terms of overdraft fees. And I think I was always so scared of it.
And like I said earlier, I’m not sure I really proactively thought about my money decisions. Even when I was traveling, I kind of thought, “Oh well, hostel costs this much and dinner in this place costs this much, and so I probably need roughly this much money.” And then worked to that. And I think if I’d been more proactive and more confident with it, then it probably would’ve saved me a lot of worry, and I might have made some better financial decisions earlier on, just in terms of starting to build more savings versus spending as much.
LYNN: Yeah. Well, and I just love that, too, because … As I’ve said earlier is that you’re not uncomfortable with numbers. And that’s the thing that’s so fascinating to me, is that even me as an accountant had to have had my own journey, which is a whole other story, around money. So it’s not about the numbers, it’s about something about the money and the emotional reaction we have to money that stops us from helping ourselves get ahead earlier until we maybe take longer to look at things or get comfortable or say, “Okay, I want to change things in order to do that.” And that, to me, is [crosstalk].
MADDY: And in my professional life, I would say I’m a bit of a control freak, and I need to know everything, and I have to get those actions done. And then I find when you’re talking about money and it’s your personal life, there’s this taboo or fear around it. And so those … The letters do go unopened or you don’t organize it or how often do you actually sit down and map out, “Here’s all the different buckets of money and investments I’ve got, and what does that look like as a total portfolio?” Not often enough.
LYNN: Yeah. So that’s fantastic. And it’s fantastic that you are willing to share that, too, because I’m sure people will feel they have that same experience themselves, and they can say, “Hey, I can do this.”
MADDY: And I think the more you learn about it, the more you realize that actually, you were fine all along. So I remember the first time we sat down, and I was thinking, “Oh my goodness, ooh, this is gonna be a difficult conversation.” And then actually it was completely the opposite. I walked out almost feeling like a weight had been lifted off my shoulders, because it was one of those things I’d wanted to sit down and talk about but never really knew without I wanted to talk about with, because it never felt normal to just go into a bank and talk to a stranger about it. So yeah, it’s interesting, that whole relationship.
LYNN: Yeah. That’s fantastic. Cool. So now, looking forward, what one piece of advice would you give your older self about money?
MADDY: I think it’s a difficult one, but one of the things is don’t save it for a rainy day. So as time goes by and I’m hopefully continuing to grow my career, I find that I am saving and investing more, which is fantastic, but I also don’t want it just to sit there and me to wake up in 30 years’ time and think, “Oh, well I didn’t go on that trip,” or, “I didn’t buy myself a new handbag.”
And it’s not necessarily about being frivolous with money, but you often hear parents or relatives say, “Oh, you know, we’re gonna … You’re gonna get this much inheritance,” and for me, that’s … Of course that’s nice to give people inheritance, but at the same time, it’s kind of not necessary. I feel like people should enjoy their money that they’ve worked really hard for, and I’m the first person to say to my parents, “Come over to Canada and visit me.” You don’t need to leave us anything. Enjoy your money and make the most of your retirement.
And so I think if I look forward, hopefully in the future I will have some of those life moments around weddings and buying houses and things like that which will cost a bit of money. But at the same time, I wanna make sure that I’m investing and I’m growing my money, but that I don’t just wake up one day, and I’ve got a big pot of money, and I’m not doing anything with it.
LYNN: Yeah, I couldn’t agree more. And you’re so right, it’s about balancing today and tomorrow. It’s about thinking about, “How do I live today well, and how do I prepare for the future?” But it’s not an either/or. It’s finding that balance and that middle ground. You’ve done such a great job so far about taking advantage of those things and thinking about how do you take advantage of those things, that you’ve got such a wonderful foundation to then say, “Okay, well then how do I continue to build on that foundation,” and then also still enjoy and take advantage of life’s opportunities?
MADDY: That’s the end.
LYNN: Yeah, which is fantastic. So thank you so much for taking the time, Maddy.
MADDY: Not at all.
LYNN: It’s been wonderful talking to you and learning more about your take on money, and yeah. Thank you so much.
MADDY: Not at all. Thanks for having me.
LYNN: Well, that’s it for today. Thanks for listening. You can check out the notes below for links related to this podcast. If there is someone you’d like us to interview, we’d love to hear from you. Visit our website, www.lifestyleprotector.ca for contact information and more episodes.