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What you wish you'd known about money earlier
We’ve pulled together this guide to help answer some of the questions you may have about the financial side of stepping into the adult world.

We've all been there: you come out of school ready to take on the world and all of a sudden there are all these adult concepts which you need to think about but were never taught

  • How do taxes work? 
  • What is a credit score? Is it important? 
  • How much should I be saving into a pension? 
  • How do I calculate my budget and what should I be saving each month? 

It’s a lot to think about. 

1. Budgeting

Spending more money than you earn quickly creates a big, expensive problem. Debt is stressful. Interest on the debt can outpace the cost of your spending in a matter of years. Take a step back and consider your main outgoings first – rent, bills, food budget etc, and then look at how much you’ll have left after you’ve paid for them each month. Then look to try and save around half of that on a monthly basis, and what you are left with is yours to spend.

Whilst this will never be an exact science each month, starting that savings account early puts you in a good position if you ever have any unexpected costs.

We offer a range of savings accounts for you to choose from; head over to this blog to find out which one is right for you.

2. Mortgages

To put it simply, a mortgage is a loan from a bank or buildings society which helps you take that first step onto the property ladder. You put a deposit down on the house and then the bank will pay the rest in the form of a loan. Saving for a house may feel like a long way off at the moment but the earlier you start thinking about the type of mortgage that works for you, and saving for a deposit, the easier it will be further down the line.

3. Taxes

Tax is an amount of money that you have to pay to the government to cover public services like schools, emergency services and hospitals. There are a bunch of different types of tax but income tax – the tax you pay on your income and council tax, which is used to pay for local services such as rubbish collection and recycling, are the main two.

If you want to learn more about other types of tax be sure to check out the government website.

4. Credit scores

Your credit score is used to help lenders determine whether you qualify for a particular credit card, loan, mortgage or service, as it helps indicate what kind of borrower you are and will determine whether your application is accepted.

You can build your credit score by always paying your bills on time and never having too much money on a credit card at any one time. Registering on the electoral role also helps with your credit score.

5. Pensions

A pension is a sum of money which you save during your working life to support your retirement. When you're young, your retirement and how you'll need to pay for it might be the last thing on your mind, but it can make a big difference if you start saving early.

Auto-enrolment workplace pensions are a common staff perk, and since April 2019, the minimum employer contribution level increased to 3%. Under auto-enrolment, total contributions must be at least 8%, so if the employer only puts in 3%, you will contribute the remaining 5%, which will automatically be taken out of your pay check.

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