3 money mistakes even accounting professionals make, according to a personal finance expert who worked at EY and PwC
IvanWeiss.London Ltd
- Carla Hoppe left a career at PwC and EY and started a financial literacy company.
- She shared the common personal finance mistakes that even her former Big Four colleagues would make.
- The list included lifestyle inflation and thinking that you shouldn't talk about money at work.
This as-told-to essay is based on a transcribed conversation with Carla Hoppe, 40, who left her Big Four career and founded Wealthbrite, a UK-based financial literacy company. Business Insider verified her past employment at PwC and EY with documentation. The following has been edited for length and clarity.
I started my career as a solicitor and worked at PwC as part of their legal team in the UK.
A few years into my career, I relocated to the US and became a tax advisor at the company. Roughly a year later, in 2014, I moved back to the UK and continued working at PwC until 2018, when I left for EY working as a director on the international tax and transaction services team.
From my early days at PwC, I felt Big Four businesses operate super efficiently and do fantastic work. Still, the system had some creaks regarding financial literacy and business acumen. Through the work I did, which included demystifying the tax world for ordinary people, I noticed this was not just a problem among the people working at PwC but more broadly across the nation.
Those experiences led me to create Wealthbrite, which I founded in 2021 after leaving EY in August 2020. We work with organizations to support their early career talent, providing them with training on navigating uncertainties around personal financial literacy and how businesses work.
Here are three of the biggest financial mistakes I've seen Big Four peers and other professionals making and my tips on how to avoid them:
1. Lifestyle inflation
Lifestyle inflation can look like spending all your earnings, or even more than what you're earning, to maintain a certain lifestyle. I've had conversations with friends and colleagues who've felt pressured in this way.
When you work hard and long hours, sometimes you want to reward yourself.
This can look like spending money or splurging and overspending to make up for working long hours or not enjoying your day job as much as you'd like.
I've probably done this myself in the early days of my career. I remember getting really excited after finishing professional exams and qualifying as a lawyer because it came with a bump in pay. It felt like I could have a bit more fun with the money I was earning.
Lifestyle inflation often happens because people don't take the time to budget. I've spoken to many people, not just in the Big Four but also in other professional services, and know that many aren't actively budgeting.
It wasn't common for my Big Four colleagues to talk about financial goals, but I had chats with people down the pub when they'd complain about the cost of things or confess to a spending splurge.
After I left PwC and started talking about Wealthbrite, more former colleagues opened up. Some even confessed to deeper financial trouble, including large credit card debts.
When you aren't paying attention to what's going in and out of your bank account, it's easy to fall into a habit of splurging and not realizing you're spending beyond your means.
You can have fun with your money, but it's important to budget and set financial goals. I encourage people to identify short-term, medium-term, and long-term goals and give yourself the opportunity to make those goals a reality.
2. Seeing investing or pensions as life admin
By the time I qualified as a lawyer, I was earning more than my father ever had in his career. It meant I didn't feel super comfortable talking to family members about my financial situation.
I'd never heard the word "investing" growing up.
I also didn't feel comfortable speaking with colleagues about finances. One of the most damaging impacts was not making the most of my pension early in my career. I've spoken to friends across multiple industries who admit they did the same.
Maximizing pension contributions is probably my No. 1 investment tip for people in workplaces like mine. More often than not, you're given very generous pension offerings, both in terms of the levels of contributions you can make and that your employer can make. Not maximizing that is a big mistake.
I've spoken to many peers who are now at senior levels in the Big Four or law careers, who know they are now at the top end of the income spectrum and should probably speak to a financial advisor. Still, they don't do it because it feels like life admin.
Not everybody makes partner, and not everyone stays in the profession. People choose to leave or take a break for personal reasons. When they do, investments can help them continue to afford their lifestyle beyond their time in that job.
I think there are a few questions people can ask themselves to work out whether seeking external support from an advisor is right for them. Do they have the time and appetite to learn about finances in ways that will help them maximize their financial position? And do they have the level of expertise to do that?
When you're working at Big Four companies, there are all sorts of rules and regulations about the types of investments you're allowed to make because of audit restrictions. It can get messy and complicated, so it may make sense to bring in external support to help you navigate that.
3. Thinking talking about money isn't for the workplace
When I was working at Big Four companies, talking about finances really wasn't done at all outside those key times in the year when we'd talk about promotions, pay raises, and benefits.
In fields like law or the Big Four, you specialize really early on. You become an expert in your field. The culture becomes one where you're expected to know what's going on, and it can feel like if you don't know something, you're at a disadvantage. This is compounded when you deal with a topic like financial health, which many consider a social taboo.
Organizations need to make it easier for people to come forward and say they are struggling with financial health and well-being.
I think financial well-being has become a bigger conversation in the UK following COVID-19 and the nationwide cost-of-living crisis. Gen Zers are also much more open about money conversations than previous generations.
I recommend that early career professionals talk to their peers about what works for them from a personal finance position.
I'd also encourage organizations to teach people about the language of money and finance and make that part of their everyday business practices. Employers owe people a duty of care when it comes to helping them really understand their pay and financial benefits.
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