Many of us have children or grandchildren that have finally left education for the world of work. Creating the right impression, being productive, understanding the workplace culture is of course important, but somewhere at the top is starting to manage your money.
The delightful sensation of finding that you suddenly have money coming in is followed all too sharply by the realisation that you don’t have as much coming in as you want – or possibly even need.
Things will get better – but right now, you need to get financially organised – and set yourself some priorities.
One – set a budget
The first month will come as a shock. Fares, clothes and the necessities of life like going out in the evenings will probably leave you much shorter than you thought. It is time to set a budget, to tell you how much money is coming in and out of your accounts, and where it is going. A budget can help you see where you are spending more than you should.
You could use a pen and paper. But this is 2022, or you could download our Continuum Budget Planner. An effective budget can also help you make better financial choices and steer you away from unhealthy transactions.
Don’t forget – none of us knows what the future may hold. Make sure your budget includes saving into an emergency fund.
Two – start building your credit history
Getting into debt is dangerous – but so is not using credit. You will need a credit history in the future to arrange loans and a mortgage, and the secrets to having an excellent credit history is by starting early. Your credit score will significantly influence your financial standing later in life, so you need to make sure that you keep it perfect.
So use that credit card, but pay your credit card bills on time, and in full if at all possible. Check your credit report regularly and dispute any discrepancies. By doing this, you are not only safeguarding your credit history, but you are also preventing identity theft.
Three – start setting your financial goals
Now that you are financially active, you can start looking at the future. What are your financial goals. A place of your own perhaps? A car? Or do you have plans for being your own boss?
Setting financial goals will help you see what you need to do to reach them. Make sure your financial goals are realistic, clear and quantifiable. You need to know how much you need, and when you need it. This means you should set a timeline.
For most people, this will mean saving, at least to start with. You need to find the most rewarding place to stash your savings where they will grow as quickly as possible.
Of course, these days saving in a building society for example may not build the kind of money you probably need. Investment, maybe a consideration. Investing for the first time can seem daunting – in fact, if you considered utilising a managed fund to take care of the details it may seem as easy as regular saving. However investment returns are not guaranteed.
Four – think about a pension
Retirement might be forty or fifty years in the future, but the time to start preparing for it is now. The sooner you start investing into a pension, the longer potential compound growth will have the potential to build your wealth.
The more you can afford to put in the better – but even if money is short, starting now is a sound move – giving your money more time to grow potentially and with the current tax relief available from the UK Government may mean that the pension pot you want will cost you much less to build.
Five – get some expert help
Money management can be confusing at any age. At Continuum we can provide the help and expertise you need – and not just when you start out. We want to work with you for the long term, help you build a financial strategy that will get you to the future you want – and help you put it to work.
So if you, your children or your grandchildren are already busy making a start on your career, make sure you find time to give us a call at Continuum. It could be the first step to a brighter future.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice, you should seek independent financial advice before embarking on any course of action.
The value of an investment can go down as well as up. Capital is at risk.
Equity investments do not afford the same capital security as deposit accounts. The Financial Conduct Authority does not regulate deposit accounts or taxation advice.
Levels, bases and reliefs from taxation are subject to change.