Getting that first payslip and being able to spend your money on whatever you want can be exciting, but it can be easy to get carried away with your spending. Poor money management when you’re young can lead to financial difficulty later in life. To help prevent that from happening, here is some money advice every young person should know.
Don't borrow more than you can afford to pay back
Once money starts going into your bank, you might start getting offered overdrafts, loans and credit cards. You may also be able to apply for store cards, car finance, mobile phone contracts and other types of credit.
With so many types of credit on offer, you can quickly lose track of what you’ve spent. If you take out more credit than you can afford to repay, this can result in charges, fees and growing debt which can become difficult to manage. If your debt gets very bad, you may be taken to court and end up with CCJs. You could even be made bankrupt. This could make it difficult to get credit in the future or secure a mortgage.
Saving money is a good habit to have
Spending money feels more rewarding than saving it, but putting aside money for a rainy day is a great habit to get into. It’s a good idea to decide how much you can afford to save each month and then transfer this straight into a savings account as soon as you get paid. If you try to save whatever you have left at the end of the month, you’re more likely to end up spending all your money and not saving anything.
The money you save can be used toward a deposit for a house, a wedding, a new car, a nice holiday or any emergencies that arise.
Learn how to budget your money
Having control over your money will help you feel less stressed and will reduce the chances of debts becoming unmanageable. List all your essential expenses such as bills, food and rent. Decide how much you want to put into savings each month. Finally, decide a limit for how much you will spend on clothes, social events and treats. You’ll also need to plan for upcoming events such as birthdays, Christmas and holidays. If you start planning for these early, you’ll find it easier to cover the costs. Any money you have left can be added to your savings or put towards a big expense the following month.
Building a good credit history will help you later in life
You might not be thinking about moving out or buying a home right now, but it’s something you’ll probably want to do in the future. Building a good credit history will benefit you in the long-term, making it easier to secure loans and mortgages when the time comes.
Morses Club is one of the UK’s leading providers of cash loans, sometimes referred to as doorstep loans. Doorstep loans aren’t right for everyone, so if you are considering it as an option, it is important you understand how it works before you apply.