5 money lessons you are never too young to learn
Do you know what APR is? Do mortgages and pensions leave you baffled? DEBS VICKERS offers a crash course in managing finances
HOW much did you learn about money at school? The national curriculum requires children age 14 to 16-years-old to be taught about savings and investments, insurance, pensions and mortgages, but research carried out by the London Institute of Banking and Finance (LIBF) for its Young Persons’ Money Index in 2017 revealed that while 44% of students said they now receive financial education in school or college, the majority of young people between 15 and 18 are still not learning enough about finances and 62% said they worry about money.
Debs Vickers, personal finance expert at moneyguru.com says: “A worrying number of young people have a limited understanding of personal finance and are even taking out credit cards or loans without really understanding the consequences, which can cause problems further down the line.
“Learning to be responsible with money and budget are key life skills, so we’ve highlighted five financial lessons we think everyone should know.”
Starting your pension early THE retirement age continues to rise, the current crop of
students will likely face longer working lives. And yet, pensions are a real taboo discussion amongst teenagers.
Starting to think about your pension early in your career could allow you to reap the rewards of a more financially stable retirement and may even give you the option of retiring a little early.
The art of budgeting LEARNING to budget at any age is an excellent proficiency to develop and the majority of jobs will see budgeting skills as a big win.
Developing an appreciation for financial responsibility, is a vital part of good business ethics, incorporating this lesson during school years will develop an aptitude for understanding the real value of money.
Understanding debt MOUNTING debt is a big issue and understanding how to manage your personal finances from a young age could stop bad habits forming.
Understanding APR (Annual Percentage Rate) would be a good place to start and can help stop you borrowing more than you can afford.
APR is the interest rate for a whole year – it represents how much interest you will be charged annually. You can use this figure to find the best loan for you – for example, a loan with 15% APR is more expensive than one with 10%.
Understand your credit reports THE significance of a credit report has an effect on what you can do in later life, especially when buying property or big-ticket items like a new car.
Banks check your credit report before approving you for credit cards and loans, including a mortgage or car loan and it might even come up during the job application process.
Check your credit report regularly and remember that every credit application you make is recorded on your credit file, whether successful or not. Making a flurry of applications for credit might make lenders think you’re in financial difficulty.
How to choose a mortgage WITH house prices sky rocketing it’s only natural to feel disheartened. The key to not falling knee-deep in debt is to go for a house or go for a mortgage you can afford monthly.
Lenders will assess what level of monthly payments you can afford, after taking into account various personal and living expenses as well as your income.
Check your credit report regularly and remember that every credit application you make is recorded on your credit file