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5 Financial Tips for Young Adults


5 Financial Tips for Young Adults

5 Financial Tips for Young Adults

Managing money can be tricky at any age, but for young adults just starting out, it can be really confusing. In reality it is probably one of the easiest times of your life, where you have very few demands and responsibilities, but if you are new to managing your own money it is easy to get out of your depth. The key is to start as you mean to go on. Although it sounds incredibly boring to young people, watching your money now will make it easier for you in the long run. These five simple tips might help too.

Understand your budget

Now that you are out from under the wings of your parents and are starting to earn – and spend – your own money, it helps to understand your financial situation. Starting completely from scratch, work out first of all what you have coming in. Next, begin to put together a list of items or services you need to spend money on, starting with important things such as rent, bills and food, but also think about other expenses such as a night out with friends or clothes shopping. If your two amounts don’t add up try to look for ways to cut back. For example, could you take sandwiches to work instead of spending out on expensive shop-bought lunches?

Making your budget is easier once you understand your pay cheque.

Being an employee means you will be paying income tax and National insurance, which comes out of your pay packet automatically. Once you know your take home pay (what is left after the tax and NI have been taken) you can see exactly how much money you have coming in each month.

Next, make sure you understand all the financial options available to you. It may be tempting to put that new DVD on a credit card, but if you don’t pay the balance on time you’ll be paying interest. If you’re making a larger purchase such as computer equipment or a car, make sure you understand all the fine print before you make a commitment. There are plenty of online tools, such as a car loan repayment calculator, that can help you understand your budget so you can stretch it to meet repayments.

It’s never too early to think about the future!

It may seem absolutely ridiculous when you only have a small amount of money coming in, but saving for the future is really important and the earlier you start, the more you will save. Even a small amount saved each month will build a good nest egg over time and could help you put a deposit on a house, have a rainy day emergency fund or even go towards your retirement.

Finally, make sure you take advantage of any financial deals or offers open to you. Many of the big name lenders offer great incentives to young adults and graduates, such as interest-free overdraft facilities, loyalty schemes and low rates on credit cards or borrowing. These incentives can be very helpful when you’re trying to get your finances in order and can help your financial life get off to a really good start.

This post was written on behalf of Fincar

5 Financial Tips for Young Adults

 

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