Keeping on top of your finances is often the last thing on your mind when you’re a young adult. Starting a new job or heading to university, navigating relationships and making adult friends, and getting used to your new adult lifestyle tend to take priority over saving money or making a budget. It’s also easy to slide into debt when you’re young and not prepare adequately for the future. That’s why we’ve put together four essential financial tips for young adults.

Create a monthly budget

It may sound obvious, but a monthly budget will help you keep on top of your finances, keep an eye on expenses, and make sure you don’t run out of money before the end of the month.

Creating a monthly budget is as simple as opening a spreadsheet and printing off your bank statement. Log all of your regular outgoings, such as rent and bills, and calculate how much you’ll always need in your account for these. Then split the remaining amount of money you have each month by week so you have a weekly budget for food, going out, and other expenses. It also helps to leave a bit leftover for emergencies or savings.

Start saving early

Your first house and your retirement may seem a long way away, but the sooner you start saving the better. Even if you’re putting away £20 a month, you could save almost £500 in two years, perfect for an emergency fund or a flat deposit. Your future self will thank you for it.

Consider opening a high-yield savings account and investigate ISA options on Wealthify so that you can get as much from your savings as possible.

Don’t live on borrowed money

Getting a credit card when you’re young is a great way to build your credit score and ensure you have a way to pay for emergency or unexpected expenses. That said, you should avoid using credit cards or loans as a means to live, such as buying food or unnecessary items with them.

Credit card and loan interest means you end up paying more for anything you buy with them. Whilst a 0% interest credit card is a great way to buy goods and repay monthly so that you can increase your credit score, avoid going into debt at all costs.

Avoid co-signing

When you’re young, you’ll spend time living with friends or a partner and splitting costs like rent and bills. This is a necessary part of life, but you should avoid getting into a fixed financial relationship with anyone. That means you shouldn’t co-sign on bills or on a loan your friend may be taking out. If a friend or partner is unable to pay for something, you’ll be stuck with the costs.

Never co-sign a friend’s loan, no matter how much they beg you. As for bills and rent, find a way for everyone to be the lead tenant on different household bills so you’re not the one stuck with paying for unpaid bills should someone be unable to pay.