Achieving financial independence is a rite of passage for
all young people. Sooner or later, most 16 to 25 year olds will have to take responsibility
for their financial arrangements, making important decisions that will shape
their lives in the years to come. This could be funding their way through
university and navigating the world of student loans and tuition fees, beginning
a first job, or even moving to a place of their own. The problem, however, that many young people (and their
parents) face is that each of them will have different requirements, budgets
and levels of understanding of money matters and it can be difficult
to address these issues before they become a concern. All too often this is because of
the lack of financial advice available for this age group.
“#yourmoney: everything you need to know about earning,
spending and saving ”, is a new guide which aims to do vanquish these obstacles – to teach
young people about some of the jargon and terms they are likely to encounter and helps them make financial decisions with greater confidence. Jeannette
Lichner, the author, who has had a long and distinguished career in finance, is
well qualified to shed light on some complex terms, such as pensions,
savings accounts, including ISAs and is even able to explain the difference
between AER and APR!
There are helpful tips on just about everything from
budgeting, to using credit cards, to understanding the tax which is coming out of
your monthly salary. Other useful areas covered are insurance and buying a car.
Visual elements in the book help too: Lichner doesn’t just talk us through a
credit card statement, or a payslip, she actually includes one as an example.
The same goes for budgeting, as we see how a budget might look on a spreadsheet. In
fact, the instructions we are given on how to make up a budget are so rigorous
and easy-to-follow, covering the entire spectrum from collecting and recording
receipts, to dividing expenditure and income into categories, that it seems successful money management is a job in itself.
And this drums home the fact that almost all decisions you
make and actions you take are related in some way to money management. As the
book says, “Every time you use your mobile for a call or a text, or hop in the
car, you are spending money”, and it therefore follows that you should keep
track of everyday expenditure, such as the mobile contract you are on, or how
often you eat out. However you choose to make or spend your money, you are
always going to have to manage it, and you are usually going to have part with
a large portion of it to pay for essentials such as bills, rent and council
tax, unless you are lucky enough to still be supported by your parents.
In my opinion though, the feature of this book that sets it
firmly apart from other how-to guides is the recognition that money management
is intrinsically linked to a person’s upbringing and mind-set: the environments
they find themselves in, the people they associate with, the career aspirations
they have. Many of the financial decisions we make are influenced by the values we attach to money. Some of us may be savers by
nature, others may be spenders, but unless you understand why you spend money
and where you spend it, financial knowledge alone is not enough.
“#yourmoney” goes a long way to helping young people understand all aspects of
money management – and is surely a must-read for anyone embarking on the
journey towards financial independence.
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