What is the moment you finally realise that you are a fully fledged adult? It could be when you get the first paycheck through the post and finally have your own money, or maybe it will be when you finally step away from your parents home and make it in your own. The line from young adult and adult is pretty blurry, and it can end up causing some confusion with what we should know and what we don’t.
Money is one of those things which we should get taught in school, it we don’t. We have to learn these skills ourselves over time, but many of us don’t know half of the stuff we should. Here are some of the main things every adult should know about money to be a functioning adult.
What’s The Right Bank?
Most of us have our first bank account as a teenager, so we don’t really get much of a say in which bank we open an account with. Usually it is just easier to use the same bank as our parents, and they will set it up for us. However as an adult, you don’t have to stay with the same bank.
If you actually take some time to research online, you will notice that each bank has different qualities, and different interest rates to offer their customers. If you want to start a savings account for the future you will want to pick a bank which offers a high interest rate. This will mean for every chunk of money you deposit, to will gain a decent amount of interest.
Should You Get A Credit Card?
Your parents likely always told you to never take out a credit card because it is. It your own money, and this is true, however it is not as clear cut as that. Sure, if you spend $2000 in the space of a month and can’t pay it back you might want to take a trip to our office for legal advice, but as long as you are smart about it this shouldn’t be a problem.
If you have heard of a credit rating, then you may already know why taking out a credit card can be beneficial, but if not, let us explain. A credit rating is the measurement which tells lenders how trustworthy you are, and will determine whether or not they lend you money. You need a good credit score for a mortgage, a car loan and other things, so it is important to add to your credit history. If you have never taken out any form of credit, lenders don’t know what to think of you. This is why a credit card can be hugely beneficial. Take out a small credit card and use it for every day bills like food or the gym, pay it off at the end of the month and you are raising your credit rating.
Are You Able To Buy A House?
Everyone dreams of having a home of their own, but the property ladder is becoming increasingly steep as the years go on. It can be almost impossible to think of getting into a house before the age of 30. However, there is a way to buy a home in your twenties if you are smart with your money.
By opening an ISA or a high interest savings account, you can feasibly save up the deposit for a flat or a small home without having to miss out on everything life has to offer. It will mean skipping the nights out and takeaways for. While, but if you can manage to go without these things, you can save the money you would have spent and be a step closer to having a home.
Some people think that to save for a home means having no life, but this isn’t true at all. You simply must change the way you live your life and find cheaper ways to entertain yourself. Instead of going out a drinking at a bar, stay in with your friends and buy in lots of cheap beer. If you plan your life smartly, you will be able to save for your first home in the next few years.