A guest post from my 23 year old daughter Bee
I’m terrible with my finances. I usually try not to think about them in the long run if I can help it and usually live day by day when it comes to financial planning. I don’t have a lot of money coming in, so I’ve never felt like there was much point in learning what financial lingo means or what I should be doing to think about my long term options.
I took the ‘how well do you know your finances?’ quiz on the Sunny website and was surprised to get 4 out of 7 right! I thought I would know absolutely nothing, but I did learn a few things too. Maths has never been my strong point so those were the questions I failed on, mainly because I didn’t really try. But I was really surprised to find that with loans that mean you are able to pay back whenever you want, it doesn’t have to get unmanageable or expensive.
Whenever I’ve seen loans advertised before that say 1000% interest or something similar, I’ve always thought you’d be paying back thousands of pounds and it just wasn’t worth it, but actually as long as you pay it back promptly, a £500 loan could end up costing you as little as £700, which is really manageable if you’re just between jobs and waiting for the next pay day or need to make an emergency payment for car repair or something like that.
Another thing that I didn’t realise was all the things that can impact your credit score. I knew that things like being on the electoral register and having debt could affect it, but I didn’t realise that in most circumstances even when you just apply for credit it can affect your score if you get turned down, which means every time I’ve chanced my arm at extending my overdraft to afford an extra clothes shop or grocery trip could mean that my score has got worse because of it.
Having learnt lots of new information, it’s inspired me to become even wiser on the subject and start to think about my financial future whether I have any money at the moment or not. It’s always good to have a plan. According to the quiz, 39% of the UK working population have less than £500 in savings. Honestly I thought it would be a higher figure because I don’t know anyone my age who has savings, but I guess it shows that if you just put a bit aside each month, £500 can soon add up giving you a nice little safety net should you need to make any rainy day payments or you fall behind on bills. Once I’ve paid off my overdraft I’m definitely going to start putting a percentage of whatever pay check I have into my online savings account, even if I’m not saving for anything in particular. Always having to deal day by day with money issues it would give me such peace of mind to know I had even a few hundred pounds put back.
What are your top tips for saving money? What’s the best piece of financial advice you’ve ever received?