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Kickstart your financial future
Managing your money can feel overwhelming but it’s actually a pretty important life skill. Whether you're still in school, studying at college or university or gearing up for your first job, getting into good money habits now will set you up for success in the future.
The good news? It’s not as complicated as it sounds. From budgeting and borrowing to hitting your saving goals, here’s a guide with our easy-to-follow tips to help you take control of your money now and in the future.
- 1. Brush up on your money talk
- 2. Know where your money goes
- 3. Make a budget and stick to it
- 4. Start saving, even if it’s small
- 5. Set yourself money goals
- 6. Borrow smart
- 7. Save money as you spend
- 8. Learn about money as you go
1. Brush up on your money talk
Managing your money is a skill and the more you learn, the better you’ll get at it. We've put together a simple list of basic financial terms to help get you started. And we’ll talk about some of them in more detail later.
- Budget: A plan for how you’ll spend and save your money. It helps you make sure you don’t spend more than you earn
- Income: The money you earn or receive, such as from a job, student loan or even gifts
- Expenses: The money you spend on things like shopping, bills and other purchases
- Savings: Money you set aside for future use. Saving regularly is important to help you reach your money goals
- Interest: Extra money you either earn on savings or have to pay when you borrow money. For example, if you take out a loan, you’ll pay back the loan amount plus interest
- Debt: Money you owe to someone, like a loan or credit card
- Credit card: A card that allows you to borrow money to make purchases. You’ll need to pay back what you spend, and if you don't pay it off by the due date, you’ll be charged interest
- Credit card balance: The total amount you owe on your credit card. If you don’t pay it off in full each month, you’ll be charged interest on what’s left
- Credit score: A number that shows how responsible you are with borrowing money. A higher score means you’re more likely to get approved for loans and credit
- Direct Debit: A way to pay bills or make regular payments automatically from your bank account. The company you’re paying takes the agreed amount on a set date, so you don’t have to worry about missing a payment
- Debit card: A card linked to your bank account. When you use it, the money comes directly out of your account, so you’re only spending what you have
- Loan: Money you borrow and have to pay back, usually with interest. Loans can be used for things like university tuition fees or big purchases
- ISA (Individual Savings Account): A type of savings account where you don't have to pay tax on the money you earn from it. It’s a great way to save or invest money and keep all the interest or profits you make. Read more abouts ISAs and how they work
- Buy now, pay later: A payment option that lets you buy something and pay for it later, often in installments. Be careful, as missing payments can lead to fees or hurt your credit score
- Overdraft: When you spend more money than what’s in your bank account. Some banks allow this, but they may charge you fees or interest when you use an overdraft
There’s no need, or even any pressure, to become an expert overnight. Take it step-by-step and learn at your own pace. And the more you learn, the more confident you’ll feel when making decisions about your money. Remember, there are lots of free resources out there, including videos, blogs and podcasts, that talk about money in a way that’s easy to understand and relate to your own experiences.
Top tip: Follow social media accounts that offer simple, practical money tips for young people.
2. Know where your money goes
The next step to managing your money is working out exactly where it’s going. Try writing down everything you spend for a week or use a budgeting app to track it for you. You might be surprised at how quickly small things, like snacks or coffees, can add up.
But once you know how you’re spending your money, you’ll be able to make smarter choices about where you can cut back and how you can save more.
Example: Imagine you're grabbing a £3 coffee every morning. It’s only £3, so it doesn’t feel like much. But here’s how it can add up:
- By the end of the week, you’ve spent £21
- By the end of the month, you’ve spent over £80
Now think about other snacks, drinks and little buys throughout the day, and you’ll get a sense of where your money goes. By tracking your spending habits, you’ll spot patterns like this and be able to make small changes.
3. Make a budget and stick to it
A budget doesn’t need to be complicated. Start by figuring out how much you have coming in, whether that’s from a part-time job, student loan and even from your Vinted sales.
Next, list out your regular expenses like rent, food, travel, subscriptions and any other essentials. Then work out how much you can afford to save. It’s always helpful to have savings to fall back on for emergencies or bigger purchases later.
A good tip is to try the 50-30-20 rule. Put 50% of your money towards needs, 30% for your wants, and 20% towards savings or debt.
Example: Let’s say you’ve got £250 a month from your part-job and selling online. Here’s how you could split your earnings:
- List your essentials: Phone (£20), transport (£40) and food (£60). Total = £120
- Apply the 50-30-20 rule: Split the remaining £130 as:
- Needs (50%): £65 for other essentials
- Wants (30%): £39 for treats or going out
- Savings (20%): £26 for future goals or emergencies
By making a budget, you can keep on top of your spending and help build your savings too.
4. Start saving, even if it’s small
Saving can be super simple. Just try to set aside a small amount every week or month into a savings account. There are many accounts designed just for teens and young adults, and some even offer competitive interest rates. This means you can earn extra money on top of what you save.
It's a good idea to set up a Direct Debit to your savings account, so you don’t even have to think about transferring money yourself.
The trick is to be consistent. Saving just £5 or £10 regularly can add up over time, helping you work towards bigger goals, like a new phone or even your first car, or if something unexpected pops up that you need cash for.
Example: Save £5 each week and by the end of the year, you’ll have £240. If your savings account offers a 3% interest rate, you’d earn an extra £7.20, bringing your total up to £247.20.
5. Set yourself money goals
What do you want to do with your money? Setting saving and budgeting goals can help you stay in control and makes managing your money feel way more rewarding. Start with small, achievable goals, like saving £50 by the end of the month or saving up for something fun, like new trainers or that festival with your friends. Having a clear goal helps you stay on track and feel motivated.
For budgeting, think about how you can manage your money better. Could you set a weekly spending limit, cut down on takeaways or challenge yourself to pay with cash so that you’re more mindful of where your money goes? Tracking your spending for a month could also help you spot areas to cut back on, which could make a big difference to your overall finances.
Top tip: Write down your goal and keep it somewhere you'll see it often, whether that’s on your desk, mirror or even on your phone background.
6. Borrow smart
Try to avoid unnecessary debt, especially from things like high-interest credit cards, store cards, payday loans or buy-now-pay-later schemes. Although they might seem tempting, the interest rates and extra fees can quickly add up if you’re not careful. This means you could lose track of spending and find it hard to pay back the money that you owe.
Use a debit card or prepaid card for everyday spending to avoid getting into debt that you can’t easily pay back.
Example: Imagine you use a buy-now-pay-later option to spend £200 on new clothes, but you miss a few payments. With late fees and added interest, you could end up owing £250 or more.
That’s at least an extra £50 you didn’t plan for. Plus, it’s money you could have saved for something else.
7. Save money as you spend
Many websites offer cashback when you buy through certain apps or services, helping you earn a little back on your purchases. And, if you’re a student, you can unlock even more savings with your student discount card.
Many shops and websites offer discounts exclusively for students, often ranging from 10% to 30% off. Keep your student card handy and always check if a retailer offers a discount before paying. You could save a lot on things like clothes, tech and more.
But remember, don’t get sucked in by discounts or cashback offers. Only buy things if you really need them, or if you can afford them while still sticking to your budget.
Example: Let’s say you’re buying new clothes online for £50. By checking for a student discount, you could save:
- Discount: 15% off = £7.50 savings
- Total cost: £50 - £7.50 = £42.50
8. Learn about money as you go
Your money journey is only just starting, and there are plenty of ways to learn more about money as you go. Here’s a few ways you can grow your know-how:
- Check out online resources: Sites like MoneyHelper and Young Enterprise are packed with money tips and tools. They cover everything from managing student loans to saving for bigger things
- Use your school or local library: Many schools and libraries have books and even workshops on money management. Check them out and see if they’ve got any resources or workshops to help you learn about saving, budgeting and spending smart
- Explore money apps: Loads of apps are designed for young people to help with budgeting and saving. They make it easy to set goals, track spending and build great money habits, all from your phone
- Learn about investing: Investing might sound a bit serious, but starting with the basics is a great first step. Look up savings accounts, Junior ISAs or beginner-friendly stocks to get a feel for it. You might find it’s easier, or even more interesting, than you thought
By learning as you go, you can build a more positive relationship with your money and set yourself up for a bright financial future.
Common questions about good money habits
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A simple way to stay motivated is by setting specific goals, like saving for a holiday or a new phone. Having a clear reason to save makes it easier to stick to your plan. You could also reward yourself when you hit smaller milestones to keep the momentum going.
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Impulse buying can be tempting, especially with online shopping. A good tip is to wait 24 hours before making a non-essential purchase. This gives you time to think about whether you really need or want it. You can also create a "wants vs. needs" list to help prioritise your spending.
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It’s a good habit to check your account at least once a week. This helps you stay on top of your spending and spot any unusual transactions. Many banking apps make it super easy to monitor your balance and spending in real-time by sending you alerts and notifications.
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Yes. Having a separate account for savings helps keep your spending and saving money apart, so you’re less likely to dip into your savings for everyday purchases. Many savings accounts also offer interest, so your money can grow over time.
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Using cash can be a helpful way to manage your spending since you can physically see how much you have left. If you struggle to stick to a budget with a card, try taking out a set amount of cash each week for things like food or entertainment. And remember, once it’s gone, it’s gone.
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A credit score is a number that shows how good you are at paying back money you’ve borrowed. The higher your score, the better your chances of getting loans or credit cards with good terms in the future. It’s important to pay your bills on time and keep debt low to build a good credit score.
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Start by setting small, specific goals you can achieve in the short term, like saving £100 in a month. As you get more comfortable, set bigger goals, like saving for a holiday or putting aside money for a new gadget. Breaking your goals into steps makes them feel more achievable.
Banking and personal finance
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