Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money. If you have a question or need help, you can chat to them here.
By Lauren Turner
At Money for Life UK, we’re passionate about making sure you can make the most of your money. With this mission in hand, we’re reaching out to young money bloggers to write for us. This blog is by Lauren, who is 19 years old. Make sure you visit her blog too at Brit on a Budget and stay tuned for more blogs from our Money Champions…
Formal education can teach you a lot, although the main money lessons I have learnt I have had to teach myself (with a little help from the internet!). So rather than you having to learn the hard way, here are 5 things about money I wish I had learnt at school – so you don’t have to make the same mistakes as I did!
Even though it is tempting to go on a huge shopping spree the minute you get paid, it is important to save at least 10% of your monthly wage. This is so you are prepared for any unexpected expenses such as a flat tyre or your oven breaking and you don’t have to stress about where the money to pay for it is coming from. Remember – save money and money will save you!
The first step to creating an effective budget is working out your disposable income (the money you have left after paying for bills and essentials). You could use the 50/30/20 rule of budgeting, which means 50% of your income goes towards necessities such as bills and housing, 30% can be put towards wants like entertainment and activities, and you can put the 20% towards financial goals such as paying off debt or saving.
It wasn’t until recently that I learnt about all the fees and hidden expenses that came with buying a house. The average house buying process in the UK can take up to 6 months, and don’t even get me started on things such as stamp duty and legal fees! You need at least a 5% deposit of the value of the house you are looking to buy, although the government have schemes such as the ‘Help to Buy ISA’ and the ‘Lifetime ISA’ where they contribute 25% of the amount you save towards your deposit.
At school, we’re not taught about how easy it is to build up debt, and hard it is to get out of it. Some debts are necessary for some people – such as student loans – although things like credit cards, payday loans and store cards can be very risky. Debt can seriously affect a person’s mental health and their financial position, so the best way to avoid it is to have an emergency fund and only buy what you can afford.
As life expectancy increases, as does the retirement age. This means that millennials face longer working lives, so the younger you start your pension, the earlier you will be able to retire!
Money for Life work in partnership with the Money Advice Service, an independent organisation set up by government. Money AdviceService provides free, unbiased money guidance across the UK to help people make the most of their money. If you have a question or need help, you can chat to them here.
