Leaving behind the student life and supporting yourself in the real world can be intimidating. Help yourself feel more confident about your finances with these 3 tips on how to manage money and set the foundations for a successful and happy future.
Make a Budget Plan
Evaluating your current financial situation is the best way to plan ahead. With the average UK student debt now rising to over £50,000, a strict budget plan can be the best way to stay on top of your finances. Budgeting doesn’t have to be as miserable as it sounds, with lots of thrifty ways to keep your spending to a minimum – it can be a very satisfying experience.
To start off, keep a record of everything you currently spend. Did you need that jumper? Was that night out worth the money? You won’t believe how much all the little things add up until you can see them in laid out in front of you. Once you have the full picture, it will become easier to prioritize your spending.
Start saving! Even if you only put £50 a month away, it soon adds up. Saving for one off expenses or unplanned bills is a must if you want to be financially savvy. It’s easy to get into debt when cars need fixed, laptops break or you need an emergency trip to the dentist, but by having a bill account ready for any of these means you will be ahead of the game.
If you want to be a true millennial, look no closer than your iPhone for a budget plan. The last few years have saw an uplift in money saving apps like Unsplurge and Goodbudget, which claim to be able to save you thousands of dollars.
Build Your Credit Core
Your 20s can be the most formative years in terms of finances, so it makes sense that you spend this time building your credit score. This means in the long run you will have easier access to loans and mortgages when the time is right.
Boosting your credit score is much easier than you probably think and is all about common sense. Probably the biggest bad credit strike is paying bills too late. Just a few late payments can really dip your score, so staying on top of these is important. If this is something you struggle with, don’t worry too much as older payments matter less – bad credit fades with time and so long as you keep up with current payments, your score will rise.
Get on The Property Ladder
Now this sounds ambitious, especially for those who are fresh out of college. However, the best way to ensure security, is to get on the property ladder as soon as possible.
The biggest issue facing first time buyers is usually sourcing money for a deposit, with mortgage loan providers looking for between 5-10% upfront this can be hard on the bank balance. Opening a help to buy ISA account can improve your chances of being able to save this amount of money, with the maximum bonus received being £3,000, on top of your savings.
For those looking to make a good return on their investment – the trick is to buy the worst property in the best area! Sure, it might not be an idyllic move initially and there will be lots of labor involved, but by doing this you can add value later - an upmarket neighborhood rarely drops value. There are endless YouTube tutorials and home improvement guides out there to show you how the make the most out of your money and transform a less than perfect space into a homeowner’s dream.
Once you are all set, maximize the use of other rooms. By renting out the other bedrooms not only can you bring in enough money to cover the mortgage repayments, but you can also potentially make a profit as well. Asking friends is usually the best way to share with the right people, but if nobody is looking try websites like SpareRoom, where you can advertise empty rooms for free.
Hopefully these tips can ease the transition from student to graduate, leading you to a bright and prosperous future!