As a young person, it's important to develop good financial habits early on in life. With everything going on currently - talks of recession and a Cost of Living Crisis - you may be more worried about your money now than you have been before.
Whether it’s understanding ISAs, mortgages, or simply learning to manage your money better, we’ve got the low-down on how best to manage your cash.
Why Financial Literacy Matters
1. Helping to create a budget
Budgeting is a key part of financial literacy. Understanding how to create and stick to a budget is essential for managing your money effectively.
When you have a budget, you know how much money you have coming in and going out, and you can make informed decisions about your spending.
Check out MyDoh’s article on ‘Budgeting for Teens’
2. Saving
Saving is another important aspect of financial literacy. Learning how to save money and make it grow over time can help you achieve your financial goals, whether it's buying a house, your first car, or starting a business.
Caysie’s Top Tip: This may seem really obvious, but take out the money you plan to save as soon as you get paid.
If you earn £200 a month and you know you need to save 25%, take that £50 out immediately and store it somewhere else, whether that’s in a Plum savings account, or left with someone you trust in cash.
If you don’t have the money to begin with, you won’t miss it!
3. Avoiding Debt
Understanding how debt works and how to avoid it is crucial for your financial well-being. Learning about interest rates, credit scores, and how to manage credit cards can help you avoid getting into debt in the first place.
It may seem a long way away until you have to worry about this, but educating yourself about ‘good debts’, and how to repay debt now could save you a lot of trouble in the future.
4. Investing
Investing can be intimidating, but it's an important part of building wealth over the long term. Learning about different investment options and how to make informed decisions can help you grow your money and achieve your financial goals.
Certain savings accounts like Emma and Plum will allow you to invest in companies for very little!
A common misconception about investing is that you need to have loads of money spare to get started, and that couldn’t be further from the truth - I invested in Amazon with just £10 using the Plum app.
Remember: Investing comes with the risk of losing part, or all of your initial investment.
To learn more about investing, check out this article from HerFirst100k.
Tori Dunlap creates content designed to help women break into the stock market and manage their money to help reach their financial goals - you may recognise her from TikTok and Instagram.
Despite the fact that her content is geared towards women, anyone can use her handy tips to get to grips with their finances.
Tips for Getting Started
1. Start with the Basics
If you're just starting to learn about financial literacy, start with the basics. Learn about budgeting, saving, and avoiding debt. There are plenty of online resources that can help you get started, including websites, books, and podcasts.
2. Use Apps and Tools
There are a number of apps and tools available that can help you manage your money and stay on top of your finances. Consider using a budgeting app like Emma or Plum, or even a physical budget guide like this creator.
‘Cash stuffing’ can be particularly effective if you struggle with ‘where it all goes’ checking your balance a few weeks after payday, and you can help out a small business by shopping for your budget binder on Etsy.
3. Talk to a Professional
If you're serious about improving your financial literacy, consider talking to a professional.
A financial planner or advisor can help you create a financial plan that will help you achieve your goals. They can also provide guidance and advice on investing, taxes, and other financial issues.
What’s better is it’s free! Pop into the local branch of whatever bank you are registered with, and make a request to talk to someone about your money.
If that seems like too much hassle, there are an abundance of money experts online - just beware of fraudsters trying to sell you courses/make money off of you.
We recommend: Martin Lewis, Money Expert
4. Practice Makes Perfect
Like any skill, financial literacy takes practice. Start by setting small goals for yourself, such as saving a certain amount of money each month or saving for a specific goal - like a new phone, or your car insurance.
As you become more comfortable with managing your money, you can set bigger goals and work towards achieving them.
We hope that after reading this you feel at least a little more confident about managing your money. The most important thing to remember is to stick at it.
If you were to spill your cuppa walking up the stairs, you don’t just tip the rest on the carpet because ‘I already spilled’, do you? In the same way, going slightly over-budget or making a bad financial decision does not mean that you’ve ruined all your progress, or you might as well give up now.
Remember, we’re all still learning.
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