For anyone starting out on their career, personal finance experts all stress the importance of budgeting. As Laura Whately, author of Money: A User’s Guide, puts it: “See budgeting and saving as a form of self care, like exercising or eating well, it is not always easy but it makes you feel in control of your own destiny, and much better in the long term.”
Know the common finance pitfalls
Competition to look good and to have the latest gadgets makes it harder to make sensible, long-term choices about your money, says Iona Bain, author and creator of the Young Money Blog: “Social media has put one-upmanship on steroids.”
Avoid using loans or credit cards to increase your spend on more frivolous purchases.
Practise budgeting techniques
Preventing personal debt is better than cure, says Bain. “Approach your budget like it’s your friend. Check in with it once a week – schedule a time, even – and make some decisions.” She suggests setting simple boundaries, such as a spending limit on nights out.
The Money Charity offers a budget building tool, but with some quick research, there are many high-tech offerings to be found.
Bain’s other savvy tips include becoming master of a “capsule fridge” (buying ingredients that work in many dishes) and mixing and match your wardrobe – think hard-working basics and vintage (charity shops in wealthy areas can be a treasure trove).
Learn the finance basics
Having a clear idea of whether you’re being paid and taxed correctly is the first step. Stephanie Fitzgerald, head of young people programmes at The Money Charity, says not understanding how payslip and tax works is a common slip-up. “Don’t be afraid to ask your employer or HR to explain them to you.”
Student debt can be a daunting prospect, but remember it’s a different beast to credit card or bank debt, says Whateley. “It operates more like a tax on being a graduate, you only pay back the debt once you earn a certain amount.”
Credit cards can help build a credit rating, but should be handled with kid gloves says Bain. “Try to have a specific expense in mind if you take out credit, pay off the full amount each month and don’t keep credit cards lingering around.”
Learn to shop around
Comparing financial products seems like a chore, but failing to do so could lose you money. Fitzgerald says: “Don’t stay with the same bank just because it’s the same one you had your student account with. Do your research to find the best deal for you.”
Be prepared to engage your negotiation skills. Haggling is “an essential tool in the financial armoury”, says Bain. Her first stop? Calling up your mobile phone provider and asking for a better deal.
Start to save
Bain advises setting up a direct debit to a savings account – her recommendation is 10% of your salary. “If you’re self-employed, try to save a chunk (however small) every time you get paid. Do it straightaway without thinking about it – it will get easier.”
Fitzgerald’s tip? “When you get a pay rise, set up a standing order for the extra money to go into a savings account. You can continue to live without it.”