Pick ‘n Mix to a Pension Plan… help.

A huge part of growing up is learning how to successfully manage your money.

Like many other things associated with adulthood, I’m not a fan. It’s even worse than the price of toilet roll – now THAT is a national farce.

Why may you ask? Not because I don’t think it’s important, or because I’m an excessive spender (except when I enter Lush…) – it’s because there is so much I don’t understand. I like being well-informed and confident in both what I’m doing, and the decisions I’m making – but frustratingly, there are so many aspects of finance that leave me feeling totally flummoxed.

Vintage financial planning. Photo by Fabian Blank on Unsplash
Vintage financial planning. Photo by Photo by Fabian Blank on Unsplash

My financial ‘journey’ – if you like – began on a fruit & veg stall on Grantham Market, aged 13. Every Saturday, 6am-4pm, £2.80/hour.

It was tough, both physically and mentally (no calculators for 13-year-old Jess) – and I learnt a whole new meaning to the word ‘tiredness’. That aside – it funded my pick ‘n mix, pudding and nail polish addiction (a bizarre combination, I recognise, I was an odd kid).

After that – I had that first (totally invaluable) – bit of work experience, and managed to gain jobs in hotels, restaurants, bars, and working for other local traders. I started to earn a little more (I was still in full-time education, so we’re not talking a Richard Branson level of wealth) – but saving became a thing I was able to do.

The things I wanted to find the funds to buy, quickly increased in expense: clothes, books, tech… and that small matter of University! The initial figures were a little daunting.

michael-longmire-681745-unsplash
Look after the pennies and the pounds will look after themselves…. or so they say. Photo by Michael Longmire on Unsplash

Throughout Uni I worked both whilst up in Durham, and when I returned to Grantham. As the saying of the supermarket I didn’t/don’t work at goes – every little helps!

Whilst at Uni I learnt a lot of financial lessons: rent, bills, credit cards, tax (& rebates – wonderful things), standing orders, direct debits… etc.

I learnt a few key things in particular:

  • Always check the LENGTH of a rental contract, not just the price. It might look like a great deal – but think long term – how much will you actually end up paying?
  • Credit cards are not exclusively for the Blair Waldorf’s & Serena van der Woodsen’s of the world (xo xo Gossip Girl) – we can have them too! As long as you pay them off in time, don’t purchase excessively – and fundamentally: remember that the money IS NOT YOURS – they’re fab! It’s also great for building up a credit rating (a score given to you based on how likely you are to be a good borrower).
  • Contacting HMRC is like trying to FaceTime someone with a dodgy internet connection. Frustrating, fractured, and can feel – totally futile. Patience is absolutely key. I’ve become very fond of the hold music.

I am very lucky to have incredibly well-informed parents, who have spent time explaining every stage of my financial journey thus-far, so that not only do I understand what I’m doing – but why I’m doing it.

I’ve now entered a new stage: one that involves ISA’s and structured saving. It feels a little scary – but I’m beginning to understand that being as active as possible with my money is the best possible course of action. But when someone mentioned a pension plan last week, I did despair a little. I AM TWENTY-TWO. Help.

Dad has a great policy when it comes to managing money. A third, a third, a third.

image1 (2)
The very helpful man himself.

Spend a third, save a third, slush a third.

Spend and save being fairly obvious – the slush is for those unexpected items – and if unused – ends up going back into the ‘save’ pot. It’s working well! Except for when I went to Lush last week… I’m going to slot that expenditure into the ‘slush’ fund.

Essentially, in just under ten years – my financial plans and perspective has (naturally) undergone an enormous shift. I’m sure it’ll shift again in the next ten years. A mortgage may be a thing. My point? Don’t be intimidated by all of this stuff. There’s a lot of jargon, and a stupid amount of paperwork – but keep yourself well-informed, and you’ll be in the perfect position to make the right financial decisions for you.

Slight side-note…

A few tips for those going to Uni:

  • Shop around for student bank accounts. Some banks offer vouchers, money, railcards, discounts… all sorts of freebies to entice you in – but take a step back and have a real think about which bank is the one for you. It’s likely that the bank you choose to go with as a student is the one you’ll stick with (hence the tempting offers), so do your research!
  • Ask for help. Parents, other graduates, siblings – most have them have been there, done that. Pick their brains! Where did they live whilst at Uni? Which student bank account did they go with? Where to find the cheapest toilet roll… (and not the library, that’s theft friends).
  • Create a budget. You’ll come to love a spreadsheet/folder. Keep a careful eye on what you’re spending, so you can identify excessive expenditure. Set limits for eating out, clothes shopping, events, travel etc. It’s boring but beneficial.
  • Find ways to save. Invest in a railcard, sign up for supermarket loyalty cards and figure out who offers a student discount (it’s available on everything from clothes to coffee – you just need to ask!). Be savvy with your spending, and it’s easy to save.

 

 

 

 

One thought on “Pick ‘n Mix to a Pension Plan… help.

  1. Well Jess you’re certainly not alone in being flummoxed by finance. The problem with it is that there are so many different facets to it. As you know I’m an accountant and when you’re in business you can no longer have just one person “doing” your books as it were – you need a bookkeeper to do the VAT, an accountant to do the accounts, a tax adviser to do the tax, an auditor to check what the accountant has done, a banker, a pension adviser, an investment adviser ….. a candlestick maker!! The list can be endless – there are so many bases to cover – just exactly where do you start??

    As my children were starting to progress into independence – getting payslips and tax codes, rental agreements – I, like your Dad, would look through them and try to ensure things were right. Well actually I’d write letters to the Revenue and generally take over as this is MY field – I can do this so don’t bother messing with my children Mr Inland Revenue!!! But what about young adults whose parents don’t have that expertise – so many people are extremely nervous of the Inland Revenue and as you’ve said Jess trying to get through to them can be a time consuming matter. Employing an accountant just to check your tax code is expensive and a bit of a sledge hammer to crack a nut.

    Being a bit of an oldie I prefer to pick up the phone and chat to someone and the Inland Revenue are made up of people just like you and me – doing a days job and just wanting to make sure the correct amount of tax is collected – so if you have the patience and time – try ringing them and asking for an explanation of your code. Of course we all have our own on line tax account and you may be able to do some of the correspondence through that – infinitely quicker – but currently quite limited. Really hoping this is going to improve as more and more information goes on line – not everyone’s cup of tea (particularly us oldies) but for your generation Jess it is going to happen.

    I really think there should be some part of the curriculum at secondary school/college/university that covers some of these basic life finance skills. There’s no point in doing it too early as no one will understand it but as you start to experience the financial world it should start to kick in. So much of this is learnt (or not) as it starts to affect us (if we notice – and I can assure you not everyone notices because no one has told them what to look out for!)

    I think your comments and suggestions are spot on Jess – if I may I would add one more don’t be afraid of the Inland Revenue, they are just one more organisation that you will have to deal with in life and get familiar with your personal tax account – it will eventually be the easier way for most people to deal with day to day taxes.

    Liked by 1 person

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