Financial literacy is a vital skill set for young adults. It’s the foundation for making informed financial decisions and securing a prosperous future. Developing these skills early can help you navigate the complexities of personal finance and set you on a path to financial well-being.
Key Concepts in Financial Literacy:
As a young adult, there are key financial concepts you should understand:
Budgeting and Money Management:
Creating a budget is a fundamental skill. It’s not just about tracking expenses; it’s a roadmap for financial success. Here are some key points to consider:
- Take a free financial course, such as Managing my money for young adults: https://www.open.edu/openlearn/money-business/personal-finance/managing-my-money-young-adults/content-section-overview?active-tab=description-tab
- Understand your spending habits: take control by making a budget https://create.microsoft.com/en-us/templates/budgets
- Build up an emergency fund
Savings and Investing:
Saving money is a fundamental step towards financial security. Here’s what you need to know:
- Different types of savings account
- Basic investing principles – https://www.youtube.com/watch?v=3jTyZl25Llo
- The Power of compounding – https://www.youtube.com/watch?v=7zf7zob1Xdc
Many young adults encounter various forms of debt. Here’s how to manage it responsibly:
- Student Loans: If you have student loans, explore repayment options and consider consolidating loans if it makes financial sense.
- Credit Cards: Use credit cards wisely. Pay your balances in full and on time to avoid high-interest charges and growing debt.
Building and Maintaining Good Credit:
A credit score can determine whether you can rent a property, buy a car or get a bank account. Lenders use it to decide how much money to lend you. There are 3 main credit rating agencies in the UK: Equifax, Experian and TransUnion. They monitor your bill and loan payments are and whether they are paid on time. They look at your payment pattern and other factors and give you a credit score between 300 and 850. A higher credit score means you are prompt in all your payments, not just debt payments.
- Credit Reports: Understand how to obtain and review your credit reports. Check for errors and discrepancies. Link to video https://www.youtube.com/watch?v=7sc-pesjZ4w
- Credit Score Improvement: Learn strategies to boost your credit score, including making timely payments and keeping your credit utilisation low.
- Get a credit score monitoring app like Credit Karma or Credit Wise. A good app will monitor your finances for fraud as well.
Resources for Learning More:
To expand your financial literacy further, here are some resources to consider:
- Our YouTube channel full of helpful videos on understanding and managing money: https://www.youtube.com/@apexcbltd
- Blogs: View our blogs here
Financial literacy is your passport to financial independence and prosperity. By developing these skills early in your journey, you’re equipping yourself with the knowledge and tools to make wise financial decisions and secure a bright financial future. Keep learning and growing in your financial literacy journey.
Get In Touch With Us
If you like what you have seen on our website, the next step is to get in touch, we offer a free initial discussion with no obligation. You can do this face to face, by phone, or on Skype.
It would really help if you could tell us your reason for getting in touch.
Please rest assured that we take your privacy very seriously: We will never share or sell your personal details to anyone without your permission.
Notice: You can not enter where the red marker is, please use any other entrance such as the top of station road.