Please give me one piece of advice that you wish you knew when you were 20!

potato_pizza

Kantankrus_Mare wrote: »

What a great thread!!

My fifteen year old "home educated" daughter has been showing an interest in how we run our family budget and we have been going through this in some detail over the past couple of days.

Think I will show her this thread during our next "lesson" and hopefully some of it will sink in.

Never too early in my opinion and I think schools should be teaching this kind of thing as part of the curriculum.

Having people go into schools who have learnt the hard way about credit cards talking to the kids about their stories would be a far better teaching tool than reading about it in text books.

I wasn't sure whether to post this as I thought it might not be strictly relevant to someone aged 20, but it would definitely be relevant to those of school age. My best tip would be not to feel pressured into going to University and getting saddled with student loans. At my school it was very much expected that you should aspire to go to university so I sort of applied quite robotically and realised part way through that the course I was on wasn't going to lead me into the career I wanted. I realise looking back that I wasn't mature enough at age 18 to really know what I wanted to do with my life. Many of my friends have also found that in fact having a degree did not make getting a job any easier anyway.

I am all for further education but my advice would be, if you aren't 100% committed to doing a particular course and for a very good reason ie with a vocation in mind that your degree will actually help you to achieve, then think seriously about whether you might be better to take some time out and work first before committing to taking on such huge debts.

zarazara

Dont trust anyone. Basically me and DH were swingled by his mother and brother,had they been non-relatives we wouldnt have falllen into the trap,it was a buisness matter and they were really underhand and devious .

property.advert

Being pragmatic is not something which comes easily to a 20 year old, I know, I was one !

Some things utterly depend upon circumstances. Many 20 year olds will be at university and building up debt rather than amassing savings and that is no bad thing, if you have gone to university for the right reasons, not just to study kite flying or some other meaningless subject. Alternatively, a young person with a sharp brain and a good work ethic could make millions from being a tradesman and earn whilst doing an apprenticeship (what are they in 2010 ?).

Firstly, get a cash reserve. You think a few hundred is enough but I'm talking a few thousand and that doesn't get touched, ever, only perhaps for a house deposit and then immediately replaced. A minimum of 3 months salary and if you have bills, then 6 to 12 months income as a buffer is the best thing you will ever do.

You want to go out on the lash but short on cash ? well maybe do some shifts in a pub and use that money to go out to a club with your mates the following night. Easy to do when young if you haven't got a manic day job. Doesn't have to be a pub, just the thinking outside the box and doing something to get the money to pay for something else without touching your salary.

You will need credit and you can get great points, flights, cashback etc. from credit cards but you have to pay zero interest, not fall into the balance transfer trap, as many will attest to, as one day that door slams shut and in later life, you've loads of debt, you cannot save for a property and it just gets out of hand.

People mention pensions. A good thing ? yes, but lets face it, you're not going to pay in hundreds a month and then pay rent and borrow money to buy somewhere to live in. Pensions do take time but the big thing is that they have to viewed as part of your overall financial position. No good to have a load in pension which you cannot touch for another 10 years as the government moved the goalposts as they did this year, adding 5 years to your working life, and at the same time paying rent and not being able to save for a place to live. Priority one, buy somewhere and then life's biggest bill is sorted. With tax relief, pensions are much more efficient at 40% than at the basic 20%. At 20 years old, your aspirations should not be to be only a basic rate taxpayer !

Someone mentioned a good idea of "paying" yourself out of your salary. Get your accounts set up so your salary comes in, say a fictitious £1000. If you have rent and bills of £300 then £350 goes to a bills account. Then another £300 or so goes into your savings account (keep searching for the best interest) and then the other £350 stay in your current account, from which you use your debit card and you live on that. If you want something then it comes from that money or you save separately for it.

I know it is easier said than done but search the net for a forum where there are 4 million people who sign up to say how they never screwed up, never have to save, have money to blow and all pat each other on the back of it. I'll save you the trouble, it doesn't exist. MSE is here because most have screwed up at one time or another (like the whole country) and are looking at saving money as the same as earning more salary, which it is, only tax free !

carooley

All of the above!!! and...

If you enjoy having a drink or two and socialising, get a few hours work in a pub/club, meet lots of great or "interesting" people. most likely you'll have free entry and a few drinks from time to time. Biggest bonus is no hangover on a sunday morning. same goes for other interests. If you like film, pick up a shift at your local cinema.....Art, volunteer at the museum.....

If you like reading - join the library!!

If you smoke - stop!!! (this one is difficult )

Think ten times before lending anybody anything. If you do, do it knowing that if it never comes back you won't be in a difficult position or won't resent having been kind/generous/niave. choose wisely. That doesn't mean you should be tight or never have a leap of faith. Everybody has hardship at some point in life.

And most importantly be nice to people, the randomest of situations and people can bring enormous wealth of spirit, don't be blind or closed to them.




I don't necessarly agree with shakespeare here, just like the quote

From Shakespeare's Hamlet, 1602:

LORD POLONIUS:
Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.




and enjoy enjoy enjoy

sapphireeye

I realise I posted earlier in the thread to thank people for making a specific point which helped me out but I want to post some of my own!

- Don't think that you need to have the biggest and best of everything. You don't. I sold my little car to buy a newish VW Beetle on finance. I loved it at first but the novelty quickly wore off, it was a pain in the backside to drive and not only was it an expensive purchase in itself, the tax, insurance and petrol were also a lot more than my little car! I decided to sell it and go back to having a small car but I ended up slightly worse off financially, my money would have been better spent if I'd just saved the money I spent on the monthly finance repayments! And don't think this just happened to me, my brother did exactly the same thing, bought a flashy car on finance and got bored with it very quickly. We both realised that a car is a car! Same applies to other things!

- Take a packed lunch to work/uni/wherever! I've always done this but the people I used to work with would spend £5 every day on food (lunch, drink, afternoon chocolate bar) and would always take the mick out of me for my packed lunch! But that was £25 a week just on crappy lunches from the work canteen. If you want to, treat yourself on Fridays but take packed lunch the rest of the time, it's so much cheaper!

- Don't get waylayed by the coffee shop/magazine shop on the way into work. The girls I worked with used to spend £3 on a coffee from Caffe Nero every morning. Again, £15 a week on coffee! Same applies with magazines (my weakness), you read them for 20 minutes then chuck them in the bin, just get the goss from the internet.

- Don't spend money you haven't got and think you'll pay it off next month. Next month you'll start off the month with less money than usual and so will end up owing money again, it's a spiral! Luckily not one I've been on but I've seen it in other friends.

- Discount vouchers are your friend! My friends think my fascination with discount vouchers is hilarious but I love going out for dinner and I've saved us fortunes on our meals by persuading my friends to go somewhere that has an offer on (and lets face it, a lot of places do these days). Why pay more if you don't have to?

- Ebay is also your friend. For selling things if you're low on money and for buying clothes that are brand new or nearly new at a fraction of the price. I'm the sort of person that buys clothes, doesn't wear them and ebays them. There are LOTS of people like me out there and I have got so many bargains on ebay. It also acts as a deterrent when you go 'proper' shopping because you don't want to spend out the money anymore! On a similar note, if you get a new mobile phone at the end of your contract, either recycle your old one or put it on Ebay asap. I collect my money from ebay and use it as a fund to buy Christmas/birthday presents because it's 'spare' money that I won't miss.

I think those are most of my top tips for now! Common sense but so many people don't even think about them.

Miss_Penelope

Oh I wish somebody sat me down at your age, if not in my teens and had shown me how to budget.

Once you get into a small amount of debt on your credit card or bank loans it is a slippery slope. My partner and I no longer have any debt and will save for anything we need e.g. a new kitchen or car. We were fortunate enough to own our own home but were sick of paying hundreds of pounds a month out in credit cards and car loans and wanted to wipe the slate clean so we sold our home (as we were relocating anyway) and decided that because we were going to rent for a while we should pay off all our debts with the profits. We saved very hard by living frugally (and still do) for a couple of years and now we own our own home again. We are both in our mid 30's but owned our first house when we were 25. Ten years of debts and interest which could have gone to pay a handsome sum off our mortgage or contribute to our pension.

How did we get into so much debt in the first place? Okay some of the debt was for education or cars for work (did I really need to buy a brand new £20K car? NO!!). But the main reason was PLAYING AT BEING RICH, keeping up with people I didn't particularly like anyway. It makes one look shallow and to be quite honest, foolish.

I remember a girl that was an aquaintance back when I was 17. We used to tease her because although she was always really dressed up, her clothes were very cheap. She could buy a whole wardrobe for £50. But who had the last laugh. I heard from a mutual friend that by the time she was 25 she had paid off her mortgage. She obviously saved a good portion of her salary and never got into debt. She still went out with her friends but not every night.

You can have it all, just not at the same time!!!

bargainbetty

lippy1923 wrote: »

Loving the F you fund idea. Brilliant! Def going to put this in place for 2011! something iv wanted to do for sooooo long now! Thanks for the inspiration :T

Thanks Lippy. It was my mother who advised me to do it, and what to call it. It's a great feeling when you know you have some protection against reduncancy or resignation. It's also fun when doing telephone banking: they ask for the account name, and then go quiet for a moment....

Also had a thought about the old Dickens quote from Mr Micawber:

'Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and—and, in short, you are for ever floored.'

Basically, spend less than you earn.

Percy1983

I would tell myself house prices are about to rocket out of orbit so beg/steal/borrow to buy, whatever the cost.

+ Credit cards are bad for your health (mostly).

queen_vi

An overdraft is a dedt years ago my husbands bank offered him a loan to pay it and in the end we payed nearly twice as much
do not use credit cards

J7JPH

Save your money if you don't have it you can't aford it
Keep away from Overdrafts, Loans and Credit Cards they are not worth it because you get an overdraft, pay this off with your credit card(s) and then pay them off with a loan!!!

you will miss out on a few nights out, you may even miss out on a holiday with your friends and a new car!! thats the down side...
The POSITIVE side is you will not be me, 31 16K debt reduced from 32K paying 850 per month on debt alone for the past 4 years thats £40,800 i would have saved and let me tell you I HAVE NOT had 40K worth of services and I wish 50% of my wages did not go on debt!!!!

Please do not follow my lead and good luck :T