Six tips to pass on to the younger generation about managing money
“If I knew then what I know now” how many times have you said this to yourself?
It’s commonplace to hear people speak about what they would’ve done differently with their finances if only they knew better when they were younger.
Conversations like this are key, making sure your loved ones are engaged with their finances early on is incredibly important.
Luckily for you, we caught up with our parents and grandparents about some of the key tips that they wish they’d know and acted on. We’ve compiled the top financial advice that they gave us to pass on to the next generation to set your future self up for success.
- Get in the habit of saving, little and often
This was the top advice from everyone we asked, save, save, save. The importance of saving money cannot be understated. In fact, with so many proven benefits, saving money is one of the best financial habits you can adopt. Saving money is important because it helps protect you in the event of a financial emergency, it can help you pay for large purchases, avoid debt, reduce your financial stress, and provide you with a greater sense of financial freedom.
Any easy way to get started is to set up a savings plan and save any amount you can — just commit to a regular schedule, keep at it, and keep the money invested.
- Get organised and know where your money is
Contactless cards and digital billing have made it hard for us to keep track of our spending, and that can be dangerous if you struggle to stay on budget.
Most banks nowadays offer an app service and a range of alerts to help you stay on top of your money. Download this and have it on your phone, so you can easily get notifications and you can check your balance. This will mean that you are only spending money that you actually have so you won’t go into your overdraft which can incur some nasty charges.
- Set goals, so that you have something to aim for
Whether it is moving out, getting a new car or just a special splurge, it is good to have something that you are working towards. This could be short-term, mid-term, or long-term but financial goals are important as they mean you can match these with your bank balance.
You may want to write your goals down and alongside this create a budget that is achievable.
- Have an emergency fund
It is a phrase we hear continuously, “take care of the pennies and the pounds will take care of themselves”, and this certainly rings true when talking about a secure financial future. It’s not always about how much you’re putting aside, but it comes back to our first tip about getting into the habit of putting something aside each payday, even if it’s a small amount.
There’s a surprising amount of people who don’t have funds readily available for emergencies. Research from Your Money found that one-third of the adults living in Great Britain had savings of less than £600.
- Don’t spend more than you earn
So many people in life make impulse purchases of things they can’t really afford, and this gets them into financial trouble.
Spending more money than you have is known as overspending and it can lead to big financial problems if it continues month after month. Keep your spending within your income so that you’re living within your means and not building up debt. If there is something you want to splurge on, why not add it as a saving goal.
If you spend a little too much or end up struggling until payday, don’t beat yourself up, look at your budgeting and be sure to get back on track next month.
- Master the skill of budgeting
To help you save and be actively aware of all the inflows and outflows in your accounts, it’s a great idea to start using a budget.
A budget tailored to your lifestyle will help you plan ahead and organize your finances so that all your bills are paid on time. Additionally, some money is going into savings, and you still have some leftover to allocate towards the splurges you enjoy.
A great tip is to always ensure that your bills and savings are paid out first so that you know how much you have left.
The most important thing to remember is that it is never too early or too late to learn about personal finance to start practising good money habits.
Hindsight is a great thing, what advice would you give your younger self? Tell us by emailing email@example.com