Basic Financial Skills No Young Adult Should Leave Home Without
Moving out of home can be an exhilarating time. However, feelings of being liberated from the constraints of living at home come with a whole new set of financial responsibilities that many young people aren’t always prepared for.
Many costly mistakes are easily avoided with little knowledge. Here’s a quick run through some of the basics so you don’t have to learn these lessons the hard way.
Having an idea of how much money is coming in, and how much is going out is a necessity. This will help you know where your money is going, and when you will need to make regular payments. This can let you know when you might be looking at a shortfall and what you might need to cut back on to ensure you’re not spending more than you can afford. You can find budget planners online to help you with this, or there are smartphone apps that also do the trick.
One particular part of budgeting you need to get used to when you have moved out is that bills just keep coming. You’ll be surprised at how frequently they appear at the worst possible time! Have a system to keep track of what you need to pay, and when. If you find yourself in a situation where you can’t make a payment, get in touch with the company. They may extend the due date, so you don’t end up missing a payment.
Knowing and maintaining your credit score
Paying your bills leads nicely to knowing your credit score. You should familiarise yourself with what your credit score is, and how you can make it work for you. The more you know about credit scores and how to make them work for you, the better you’ll be at making more informed financial decisions. Head to our Learning Hub to educate yourself on all things credit.
When you first move out, you’ll be doing a lot of things for the first time: electricity account, broadband plan, insurance, the list goes on. These products and services can be complicated and confusing. Taking the time to identify what you need and researching to get the best deal can save you a significant amount of money in the long run. Using comparison sites is a good place to start, but nothing beats doing your own research.
One feeling you want to avoid is realising that you have been paying unnecessary fees when there are alternatives that are free. Don’t pay the lazy tax and look for areas where you can save money. Some good places to start are:
Transaction Accounts – If you are paying fees, there are plenty of no-fee products out there.
Credit Cards – See if your current credit card provider has a no-fee product you can switch to.