Younger people are becoming increasingly financially savvy. Growing up in recession, being online 24/7 and doing their research before making decisions, not just financial ones has been an empowering thing for this generation of twenty somethings.
It wasn't so when I was that age. In my mid twenties I was clueless about money. I spent it as fast as I earned it, had no savings or pension and had already make questionable financial decisions that I'll be carrying with me til 2032.
Then, in the last year of my twenties, the recession hit at the same time as I took a marketing position in the financial services sector. It made me realise that living in financial airy fairy land is not conducive to a healthy, happy life. My thirties have been spent trying to undo the damage I did the decade before.
These are the things I wish someone had told me in my twenties:
A STUDENT LOAN ISN'T FREE MONEY
It's been nearly ten years since I left university but I still remember the annual 'get your student loans here' circus. "Yeah, you can borrow up to £1,300, no, you don't need anything except your signature and NI number, yeah the interest rate is practically negligible."
Not that I blame university for pushing the student loans on me, it was my own feckless fault that I took out a loan I didn't need, and blew it on holidays, festivals, gig tickets and nights out. I lived with my mum, I had a good part-time job. I didn't NEED a loan. Ok, I had a damn good time, but paying for it all these years on really grinds my gears. Moral of the story: student loans are a godsend to those who need them but not for working, non-fee paying students with minimal living costs.
NOT EVERYONE IS AS GENEROUS AS I AM WITH THEIR MONEY
It's taken me years to work this out. But I've also realised that I should remove the word 'generous' and replace with stupid. Not everyone is as stupid as I am with their money. I love standing my round, buying people I love presents, lending people money if I'm flush. But I've lost a few friends along the way who treated it as a one way street, building their own savings whilst I spent what I had on the fun times. Moral of the story: splashing the cash is ok if you can afford it, but make sure you're saving some for a rainy day and only treating those who would do the same for you.
STORE CARDS ARE NOT YOUR FRIEND
Factoid: If you paid the minimum repayment (usually 3% or £5 - whichever is highest) on a store card with an interest rate of 29% APR and balance of £1000, it would take you 21 years and one month to clear the balance and you will repay a grand total of £3072 - three times the original balance. Moral of the story: unless you're getting a discount and paying your balance off in full, don't use store cards, ever.
YOUR HOME IS NOT A CASH MACHINE.
This is probably not as relevant in the current financial climate, but when I bought my first home (for a song), my mortgage company was throwing money at me from the equity. Well, it would be rude to say no, wouldn't it? No, SAY NO! Then I bought a bigger place, renovating it with the 110% mortgage they offered me. Cut to a few years on, my home is in negative equity, despite rapidly overpaying each month. Moral of the story: just because a lender is throwing cash at you, it doesn't mean you should take it. Oh and 110% mortgages are the devil.
'SPENSIVE FROCKS ARE NOT AN INVESTMENT
I used to love Karen Millen et al but there came a point where I realised that I was spending more on my wardrobe than I was on my rent, for dresses that I only wore once or twice. And pretty as they were they weren't going to keep me warm in my old age, hell, they didn't even keep me warm in my late twenties as my waistline expanded and I couldn't get into them anymore. The frocks mocked me from my wardrobe to the point I eventually gave in and Ebayed them. Two hundred pound dresses, only worn once or twice, selling for £15 a pop. It broke my heart. Still I was able to buy myself some High Street cheapies to replace them with and that I could actually fit into. Moral of the story: if you have champagne tastes but a beer income, stick to the sales or mix and match key 'spensive pieces with more affordable High Street favourites.
IT'S NEVER TOO EARLY TO START A SAVINGS PLAN
Seriously. Do it now. When I was at uni, I used to deposit money into a savings account each month, then lift it out for bourbon and a new frock at the end of the month. I've worked out recently how much I'd have banked if I'd kept that initial savings in a high interest or tax free account. Let's just say it would have been a belter of a rainy day fund, Moral of the story: the earlier you start to save the earlier you benefit from compound interest. Using tax-free entitlements like the £5,940 cash ISA allowance really helps your money grow year on year too.
INTERNET SHOPPING WHILST DRINKING WINE IS NOT GOOD FOR YOUR BANK BALANCE.
Sorry, this is one I can't give up on. I know it's wrong, but it feels so right. Moral of the story: everyone is entitled to one guilty pleasure.