Oh how we all wish that we were taught about things like credit cards, mortages and taxes whilst in school – then maybe we’d be a little more prepared for the big, company world of adulting!

Once we have left school or chunked our hats in the air, we are then thrown into the big wide world on our own and left navigating budgeting and interest rates. 

Are you ready to start getting money-smart and look after the pennies. If so, i’ve put together some nugget of money related widsom that will hopefully help you manage yout spending habits  and future plans for the next chapter in your life!

Black Calculator Beside Coins and Notebook

Recoding Your Paycheck

When it comes to starting your first job, it can be very daunting and confusing when you receive your wage slip. So here is a quick run down of your pay slip:

Income Tax:This is a tax that we have to pay on our total earnings. It’s more often than, a tax is paid on all taxable income earned by you within the current tax year. 

Gross Income: This is your total income before taxes, or any other deductions are made. 

National Insurance: NCI’s is paid by both you and your employer. The money is recieved by the UK government  and helps to fund state benefits, like unemployment allowance, statutory sick pay and state pension.

Net Income: This is the income once all of the taxes and deduction (e.g. student loans) have been paid.

How Does The Income Taxes Work In The UK?

During this financial year 21/22 we’re allowed to earn £12.570 tax-free, that’s fair right? But if your yearly salary is above this, you’ll have to pay the appropriate level of tax on any income over £12.570. If your earning over £12.570 and below £50.000 you’ll have to pay the basic 20% tax rate on the difference between the two.

Is It Ever To Soon For You To Start Thinking About Retirement Funds?

During this financial year 21/22 we’re allowed to earn £12.570 tax-free, that’s fair right? But if your yearly salary is above this, you’ll have to pay the appropriate level of tax on any income over £12.570. If your earning over £12.570 and below £50.000 you’ll have to pay the basic 20% tax rate on the difference between the two.

Tax Documents on the Table

Does Graduates Still Need To Pay Into A Pension Pot?

If your able to contribute towards your pension, then it’s alway a good idea – your pension is for you too enjoy you retirement comfortably, as the last thing you want to do is to pick up a part-time job, cos you can’t afford your basic living costs. 

An important thing to know is that if you are currently over the age of 22 and earning over £6,420, then you’ll be automatically enrolled onto a workplace pension!

Should We Put Money Away For A Rainy Day? If So, How Much Should We Put Into Saving Or Emergency Fund?

Saving into a emergency fund is a great way to afford those unexpected bills, that alway seem to happen at the most inconvenient time. Creating a seperate saving pot, and put away 10-20% of your monthl wage. But to be perfectly honest, you are the only one that will no how much you are able to save – so it doesn’t matter whether it’s £10 or £200 a month, what really matters is that you are saving for your future, and you never know when the money will come in handy. 

Does Every Graduate Pay Back Their Student Loan Straight Away?

For many students, the thought of repaying thoes hefty student loans can be overwhelming. However, here in the UK we don’t have to actually pay towards the lonad until the April after you graduate and when your income is over £27,295 a year. So until you yearly salary is over this amount, then you don’t have to pay back a single penny! – Bear in mind that this only applies to plan 2 student loans (student loans that’s been taken out after 2012).

Person Putting Coin in a Piggy Bank

The Benefits Of Budgeting?

This extremely important if you are looking to stay on top of your finances and out of debt. Now that the current economic climate, budgeting is most probably more important than ever before. Allocating money into different pots, can enable you to see where all of your mone is going. Come on, the whole aim is to budget and avoid over spending. Being guilty all of the time is fun, right?? So, budgeting may be some use to you.

Ways To Budget:

  1. Set yourself a realistic budget that you can stick to over a long period of time, not just for one pay check. -There is really no point in setting a budget of £200 a month, if your unable to stick to it.
  2. When you have set a realistic budget, i would advise you to open up a seperat bank account – this helps to reduce the chance of you overspending, as you’ll be able to set a weekly limit of how much you are allowed to spend.
  3. A seperate bank account isn’t for you? why not choose a cash budget instead, as seeing your money physically can reduce your chances of spending your money willy-nilly!
  4. If you stick to your budget, but are finding it a little harder, then download a budget app that will help set your budgets.

How To Start Building Up Your Credit Score?

A lot of people don’t know that they have a credit score already, even if you have used credit in the past or not, you’ll definitely have a credit score. If you are interested in looking at increasing your score, there are some ways you can do it:

  1. Make sure ti have some bills in your name, but must make sure you pay for them on time.
  2. Don’t make to many credit applications over a short amount of time, as this can really affect your credit score.
  3. Remember to join the electoral register, as this shows the lender that you have lived at a set address.
  4. You can opt for a credit card but please use it carefully and responisbly. This probably the most important thing to remember, other than paying back the money you’ve spend at the end of each month!

black calculator beside black pen on white printer paper

How To Start Building Up Your Credit Score?

For many students, the thought of repaying thoes hefty student loans can be overwhelming. However, here in the UK we don’t have to actually pay towards the lonad until the April after you graduate and when your income is over £27,295 a year. So until you yearly salary is over this amount, then you don’t have to pay back a single penny! – Bear in mind that this only applies to plan 2 student loans (student loans that’s been taken out after 2012).

The Pros And Cons Of Getting A Credit Card?

Credit card are not for everyone, but here is a list of the pros and cons that will hopefully help you to make an informed decision:

Pros

  1. There are some credit card that offer things like; cash back and air miles.
  2. Buying a large purchase and you want it to be spread over the month/year.
  3. It can really help to build up your credit score if you are using it responisble.
  4. It can increase purchase protection – as credit cards offer a certain levels of protection that debit cards don’t offer.

Cons

  1. Fail to repay the minimum requirements then this can really affect your credit score.
  2. A high interest reat is applied if your credit card balance isn’t paid on time or in full every month.
  3. Not using your card wisely, well then you’ll end up in a lot of debt – this is what you want to avoid at all cost!

Financial Mistakes The Every Graduate Needs To Avoid?

  1. If your a graduate, the best advise i would insist you to seriously try out is to live on a budget – it’s super crucial as the last thing out want to find yourself in, is a lot of debt. You ideally want to get a budget that you are able to stick too – this can hopefull reduce your chances of overspending unneccessarily.
  2. Another mistake is not having savings. It’s really important, especially  in an event of an emergency or for the future – whether it’s a for a new car, holiday or house! Cos let’s be honest, you don’t want to find yourself in a sticky situation, by not having the funds to help you out. You don’t have to save hundards and thousands of pound every month, but by contributing £10 or £90 a month it will soon add up.
  3. And finally, if your able to, really try to avoid getting into debt. It doesn’t matter whether it’s through the credit card or a bank loan, at the end of the day, avoiding getting into debt is alway going to be the best idea, otherwise it can protientally lead to a downward sprial and can become out of control very quickly. So make sure to avoid getting into debt at all cost!