Ryan: I remember the first time I ever got paid. I was 16 and working a few hours a week at a fast food chain during sixth form. While in hindsight I didn’t earn a lot, it was the first time I had a sizeable amount of money EVER, and wow did I take full advantage of it. A couple of hours after getting my first pay check, I had bought an entire season’s worth of clothes and new trainers. This might sound ridiculous to you, Jam, but to me that first payday symbolised something. I had made it, I had made money, and I was becoming an adult.
Jam: Getting paid the first time was a big deal for me too. You’re right, it did feel like I'd finally become an adult. I was working part time as well. I was 17 and working 20 hours a week at a department store, also during sixth form. The first pay check didn't last long for me either though - I was out eating every day and buying so many clothes!
Ryan: It’s been a while since I was working shifts at that fast food chain, and by far one of the biggest things that I’ve learned since then is how I manage my money. Growing up, I always heard the phrase ‘you live, you die, you pay taxes’ - well, included in that bleak statement should also be one other thing: bills!
Jam: Totally agree – I miss those days. Things changed when I started working full time at 18 and I wasn't living at home. That's when it hit me, I had to start paying bills and rent. A lot of people my age were living away for Uni and we all felt the pinch. I was lucky to get on an apprenticeship, which meant I was working and studying full time. I couldn't wait to get paid that first month, and unlike the last time I learned from my mistakes. My rent included the household bills and I made sure I stayed away from the shops until all my bills were paid. Like an actual adult!
Ryan: It might sound ominous, but for someone like me, paying bills was challenging at first. Juggling lots of things at once is not something I find easy, so working out the various bills (rent, council tax, utilities, TV licence and broadband, etc.) was daunting. Thankfully, I’ve been able to manage this well: internet banking and direct debits mean I just have to budget the amount, not make sure it’s all going where it needs to go each month. I’ve done things like learning how to cook, which is much cheaper than loads of takeaways. While budgeting itself can sound like a chore, it’s actually one I enjoy, so felt right at home - if you need a bit of a helping hand; check out Getting to grips with money and my payslip.
I like maths, so think of managing my finances nowadays as being a bit like algebra. X is my salary; Y is my outgoings (bills, food, etc.) which means Z is how much I have each month left over. Z changes month to month and it will for you too, so be aware of that. Some months you might have additional outgoings to cover Christmas, a birthday, going to a wedding, for example. So my advice would be map out your finances a few months at a time, particularly paying attention to points which X and Y may be really close.
Jam: That makes sense. You'd probably agree when I say that managing money takes practice. It took a while for me to get used to it and every month is different - you learn to adapt your money to your situation. I tried hard to keep my costs low and getting more for my money, and spent a lot of time looking online for the best deals for things like phone contracts and broadband. The LifeSkills site has loads of other good tips on how to save money across all areas of your life.
Ryan: Great tip. The best piece of advice I’ve ever been given is “when the sun is shining, make sure you mend the roof”. If something unexpected happens, your outgoings might even become more than your wage, so it’s important to make sure your have some savings behind you in case this happens. It doesn’t need to be a lot, but even a bit could be the difference between whether you can pay a bill or not, so try to give yourself some breathing space.
Jam: I agree Ryan, it's so important to ensure you manage your finances in case of emergencies. Keeping a little bit of savings is a good way to do this. I’m trying to save as much as possible at the moment, for the future, to go on holidays and look at buying a home.
Ryan: I once read a quote from Oscar Wilde that said: ‘experience is simply the name we give our mistakes’. Trust me; everyone makes mistakes when first managing their own finances. A bill one month could go up which you didn’t anticipate, or your food shopping might be a lot higher one week than you planned. Learn from these experiences to make sure your algebra equation – or however you work it out - makes sense to you.
Jam: Don't wait until you have a lot of money to start being smart with it. If I were to give a young person advice about managing finances it would be think about the future and make a flexible, yet realistic budget. Remember you worked hard for that money - spend it wisely.
StepChange can help if you have debt or money worries. They provide independent debt advice and solutions.
The Money Advice Service provides free advice on managing money for those in England, in person, over the phone and online.
Citizen’s Advice Bureau can provide local debt help.