What advice would you give to someone not in debt

nuno

Unfortuntaly im a bit older than 20 and am living in london! Rent is about £630 a month so my back-of-envelope calculations lead me to believe:

salary: £1750
net: £1322

rent+house bills: say, £622
left over: £700

If i can save 300 a month that leaves me £100 a week to live on for food, travel, mobile phone, anything else. I'm not a big party animal/shopper and work quite long hours so don't really spend much money during the week.

Should be fairly comfortable i think. I really need to stop buying lunch at £5 a day all the time now!

DarkConvict

I just finished uni too, so in the same boat.

Credit cards are fine, just ensure you pay everything at once.

Ensure you have enough savings to cover your liabilities, i.e. if you take out a £20 a month phone contract for 24 months, make sure you do have £480 in savings to cover the cost of it. I have always lived with that as my buffer, if anything goes wrong i always plan to meet my costs.

Biggest ways to save money is on weekly shopping, for 1 person keep it to £150 a month, keep rent under £400. Where possible cut down on transport costs, work out if you can get to work by walking/cycling/car/train/bus. Find the cheapest option. i did a 30min+ walk to work every day on my placement year in leatherhead.

purplerose

Save as much as you can.
Don't get joint cards/bank accounts until you're married or in a very stable relationship.
Do use credit cards for expensive items but pay off balances of any credit you do have in full every month.
Don't lend people money unless you have a written agreement that details a repayment plan.
If the worst happens and you somehow manage to lose your job, never resort to credit cards to pay your bills/shopping as it all vanishes so quickly.
If student life didn't teach you to budget then learn now!

~evanesco~

You've obviously made it through studying without racking up loads of 'other' debt. well done on that front. Her's what I would do if I could be in your shoes.

Learn to 'stooze', you can make some pretty decent cash for free, when done right.

Learn to cook, and cook in batches, freeze the rest for another day.

Learn the mantra: 'Do you want it? Do you need it? Can you afford it? Answer 'No' to any of these, don't buy it. Answer 'Yes' to all of them.... Can you get it cheaper elsewhere?

Not all credit cards are evil, as previously stated, Section 75 is essential in certain situations.

Save. Save. Save. For anything and everything.

Don't get hooked into the trap of 'have it all, now'. It's not important at the end of the day.

Keep an easy access pot of at least 6 months wages (some people advise on 6 months outgoings, but 6 months wages will last longer if you budget, or allow you to keep your current lifestyle for 6 months).

Look into how you can save money e.g our work has an employee discount scheme (which works in a similar way to those Cashback sites), use things like this.

Plan ahead.

And mostly, enjoy yourself, don't get too hung up on everything. Life is for living.

Never worry about what you did/didn't do. You can't go back and change, only learn from it.

Best wishes xxxxx

Marisco

Personally, I'm with Wrinkles here - stay away from credit cards and store cards!! I think you have to be super disciplined to have one, but if you feel you need one for "fall back" just have one!! Save as much as you can comfortably afford, without leaving yourself short and "scratching around" to live - the operative word being live;)

tealady

Budget! I didn't and got into a mess
Check your savings accounts regularly and make sure you switch to the best offers.
Anything you buy that costs over £100 use a credit card and pay the bill before you are charged interest.
Shop around, if more than one person is selling something then there should alays be a cheapest price.
HTH

determined_new_ms

Hi op. Congrats on finishing uni - its a good feeling isn't it? - and also the job, good for you. ok so I disagree with the credit cards statement as I have 2 cashback cards which I use all of the time and pay off every month. That way they pay me to spend my own money. BUT it has taken me a seriously long time to learn to be that disciplined with my finances. If you don't think you can be yet then stay away from them. other than that here are my top tips:

1. Learn to live life rather than spend money - took me a long time to realise spending is not a leisure persuit
2. work out a budget and stick to it - let your budget decide what activities you can afford to do, not let the activities clean out ur bank account. When I was back in my 20s the amount of sundays I'd wake up and realise I'd caned £100+ as once I was drunk I'd go to the bank and take out another £50++++ :eek: Now I work out what I can afford take that out and leave my bank cards at home on a night out (not that there's been many of them this year!)
3. Anything I buy I get the best price for. Example last week our shower hose & head gave up the ghost so we trotted off to B&Q and the cheapest set was going to cost £22. I thought that seemed high so decided to look on ebay got a set for £7
4. Learn to save - its such a good feeling to watch a little pot grow, and be able to buy the things you have decided to get (a holiday etc)

that's it I think! Although if you can overpay ur student loan a little each month so its paid off quicker until ur earnings go up.

Good luck out there!

nuno

thanks to everybody! Some great advice around. Bottom line seems to be to start saving money every month as soon as you can. I like the idea about building up a few months wages in reserve in case the solids hit the fan on the job front.

bobbadog

Well done OP on thinking ahead! wish I had! I'm 28 and in London... I got into about 2k of debt at Uni, and then another 4k whilst I was in a low paid job and supporting OH. Only now am I getting back on track (we owe £10k between us, but did purchase a flat. Which we're trying to sell. But that's another story).

My tip, think twice before you do anything. Check Top Table, Nectar, Quidco, Hot UK Deals, etc etc before you do ANYTHING. Last night I went to Kettners for a girlie dinner, had champagne cocktails, wine, 3 courses of dinner - came to £25. 50% off. Booked through Top Table. Nothing wrong with having lots and lots of fun, but think about how you can get that fun for the least money. CInema at the weekend, £7.75 a ticket - used Nectar points and got £5 off, which made it far nicer. Shop in Tesco? £5 of clubcard points = £40 of food at Chef & Brewer, Strada etc.

I ALWAYS take my own lunch to work. SOmetimes home made soup, sometimes couscous, sometimes leftovers - but if i find I cant make ANYTHING from what i've got at home, rather than buying a Pret A Manger sandwich, I'd get a tin of soup and a roll for £1, or some sandwich filler and bread that I could use that day, as well as taking home for the rest of the week... that sort of thing. I work in Media and everyone else in my office seems to spend £7 ish a day on lunch, as well as a morning coffee etc. I don't feel like I miss out. I do everything I want to do, just try and get it for less.

Make sure you save what you can. Save it in the best place - Isa first perhaps, make sure you get the most of your savings. If your company gives you a pension, use it. Mine match 5% of savings up to 5 years service and 7% after 5 years - i've been there 5 years next week so upping my contribution to 7% - in the long run, that will make the money worth so much more than it is now.

Get a season ticket loan from your employer if you haven't one already - generally means in London 12 months travel for the price of 10.

Can't wait til i'm out of debt entirely! Best of luck

Asiacat

If you're going to buy a house in the future take out your endowment policies now. The younger you are the cheaper they will be and the maturity date will be earlier saving you thousands in mortgage interest.

Always work out the true cost of everything before deciding to buy. That car may have a sticker price of 2k but add in insurance costs, maintenance, petrol, loan interest, depreciation, parking charges etc. and then decide if you still want to buy it.

Never make an impulse purchase, keep an impulse purchase delay notebook and write it down. If you still want it after a week then go ahead and buy it.

Never buy on credit with interest attached for an item that is only going to depreciate in value.

Plan your spending in advance for each day and unforeseen circumstances apart stick to it.

Budget in some fun. Denying yourself any discretionary spending or little treats will only make you miserable.

Remember it's not how much you earn that matters it's how much you keep.

Measure what matters! What gets measured gets done. Detail what you earn and what you spend each month and keep a monthly record of the % of your income you have saved and your monthly profit (Income - expenditure). Simply maintaining these figures will inspire you to find new and ingenious ways to beat last months record.

Frugal is fun. Order and read Jeff Jeagar's and Anne Dacyzian's books to tune yourself into the frugality mindset.

When buying something on a credit card work out how long it will take to pay it back using minimum payments only. A sofa bought on a 19% APR credit card with a 3% minimum payment stipulation will take over 30 years to pay back!

Remember it's your money don't let anyone else spend it for you.

Insure what you can't afford to replace.

Don't buy extended warranties on electrical goods though. Things don't break down like they used to and most warranties are simply extra profit for the retailer.

Never gamble and that includes the national lottery. If you want to hold onto a million pound windfall dream buy premium bonds instead.

Read the millionaire next door.

Cut coupons.

Never spend a single penny you don't have to.

Never buy when you can borrow. Consider buying second hand before buying new.

Don't spend money to impress anyone else.

Don't shop simply to cheer yourself up.

Don't be ashamed to be seen in Aldi or Poundstretcher.