We all want to buy things, sweet treats, clothes, games. However we all reach a common problem. Money. This problem occurs for pretty much all young adults. Well, luckily for you I have a few tips for how you can be able to buy the things you want without draining your balance.
Don't be scared by the big terms, its very simple really. Financial literacy is simply and understanding of basic finance, budgeting, savings, interest, and assets. Although some of these things listed may not be relevant to you now; they definitely will be in the near future. Having a good understanding of basic terms is very important as it actually allows you to assess financial options better- if you didn't know what budgeting was, you may discard it as an option. Having a sound fundamental understanding of financial terms and plans is an important 'baby step' to being able to save money and effectively budget yourself.
Understanding that budgeting is more than dividing money into different things is essential to budgeting effectively. You need to create budget sections, e.g. a section for saving, for spending and for emergencies.
Depending on income/allowance, you can allocate different amounts per section. If you have a stable earning from a weekend job (for example) you can you can split this into how much you will spend on saving for a car and how much you will spend on things you need and how much for things you want. Identifying what is your needs and wants in important as correctly and effectively doing so will let you save a larger amount of money. Saving money in this way allows for more freedom to purchase the things that you want as well as purchasing your needs in an efficient way.
Although a part of budgeting it is a very good idea to look at this in more detail. It is a rather simple area, putting money aside and not spending it. But there are a number of things you can do to improve how you save money.
Finding a good savings account with a trusted account that has good interest rates is easier than you think. There are many websites recommending a lots of different banks. With conditions like age, you will be able to find plenty of saving accounts with sound interest rates, perfect for active saving for both short or long term saving.
Junior ISAs are a very effective way of saving money especially for long term saving, for example, for a car. junior ISAs have higher interest rates than saving accounts that more mostly fixed. However money can only be put in and out of these accounts x amount of times a year (usually 2-5). It is a good idea to have both a junior ISA and a savings account so you can save money to then put into a junior ISA. Sometimes these will need to be set up by a parent depending on age.
I hope this was helpful and thank you for reading.
Written by: Joe Bertelli
Published: 12th December 2024