My ServicesFinancial Advice For UK Graduates or College Students
How University graduates’ approach financial planning during their first years in the real world after college or Uni often sets the pattern for their financial habits in future life
You Can Do it!
Unfortunately, a class titled “Finance for Young Adults” usually isn’t part of any high school curriculum.
Taking the time to learn a few critical financial rules can help you build a healthy financial future.
Make Your Plan
Let me help in the planning or at least taking a look at the possible options that could be available to you to plan your way to financial independence. Get a free 30 min call with me to talk over your possible plans. It costs nothing to talk!
Achieving returns in a low-interest-rate environment is challenging but getting into the savings habit at an early age has proven positives for the long term.
For the more cautious, ISAs are still worth considering.
Individual Savings Accounts (ISAs) are the easiest to use and understand. Essentially the basic cash ISA allows a saver to pay in up to £20,000 a year and enjoy tax-free interest.
Probably one of the last things on your mind, when you have just left education, is pension planning. However, with automatic enrolment into workplace pensions, more and more people are getting involved in pensions at a younger age.
So long as you are 22, classed as a worker, ordinarily, work in the UK and earn over £10,000 a year, you will automatically be enrolled.
You will also usually receive an employer contribution, which can effectively double their contribution.
Know Where Your Money Goes
Once you’ve gone through a few personal finance books, you’ll realize how important it is to make sure that your expenses aren’t exceeding your income. The best way to do this is by budgeting. Once you see how the cost of your morning coffee adds up over the course of a month, you’ll realize that making small, manageable changes in your everyday expenses can have as big an impact on your financial situation as getting a raise.
In addition, keeping your recurring monthly expenses as low as possible can save you significant money over time.
Understanding how money works is the first step toward making your money work for you.
Start An Emergency Fund
One of the personal finance’s most-repeated mantras is “pay yourself first.” No matter how much you owe in student loans or credit card debt, and no matter how low your salary may seem, it’s wise to find some amount—any amount—of money in your budget to sock away in an emergency fund every month.
Having money in savings to use for emergencies can keep you out of trouble financially and help you sleep better at night. Also, if you get into the habit of saving money and treating it as a non-negotiable monthly expense, then soon, you’ll have more than just emergency money saved up—you’ll have retirement money, vacation money, or even money for a down payment on a home
Managing Student Debt
According to the Institute of Fiscal Studies in 2017, the average student in England will graduate with debts of over £50,000.
Those from poorer backgrounds will incur more, with more loans available to them.
How much interest is payable will depend on the current UK Retail Price Index (RPI) and their employment circumstances
You will not have to pay anything back until you earn above the repayment threshold, but the interest will continue to tick over in the background.
You will start paying back any loans as well as any interest the April after they finish university.
If you do not earn over £25,725 then you do not have to pay anything back.