Written by Money Ready learner Aimee-Jane Parsons.
As someone who has experienced financial hardship, I’m very grateful for what I learnt in a financial education session with Money Ready.
I was trying to move into my own flat at the time. The Money Ready trainer talked me through what to look for in terms of affordability and value for space and location. She also walked me through some things I hadn’t considered, such as paying my own internet bill and how to set up direct debits through my banking app.
I’ve just turned 22. Like many other young people, I’m not in full-time education, training or employment and depend on Universal Credit.
I receive a little over £300 per month as Basic Universal Credit. After paying rent, utilities, phone bills and groceries, there is little or nothing left over. No money for the bus, or a new pair of shoes if you need them. Forget birthdays, because you can’t afford to buy anyone a present, and if you want to see your friends, you’ll have to do something for free or hope they’re kind enough to pay (but they’re struggling too).
I volunteer a couple of days a week for charities, but it’s difficult when you can’t afford the bus fare and you live three miles away.
Unexpected financial shocks
The biggest struggles can be the unexpected financial shocks. For some it may be needing a new pair of glasses. For others, even getting your period is enough to throw your budget into chaos.
The rise of Buy Now Pay Later schemes can be a blessing or a curse. Buying a £60 food shop but only having to pay £20 in the moment seems like a dream come true. So, you do it again, and again. But you forget you haven’t paid the last £40 off yet. If it gets out of control, you can end up with debt pilling up.
At one point I had a weekly grocery budget of £25. I budgeted down to the last penny to make sure I had enough to last. On the weeks when I needed to buy shampoo and conditioner, I could afford less food and would only eat one meal a day.
It’s stressful to build your entire life around the last penny in the bank. Not being able to go out with your friends or afford quality food, constantly worrying about whether you’re going to need that new pair of glasses, while praying you don’t get a hole in your shoe that will send you down to the food bank again this month…
But there’s always a beacon of light. For young people like myself, it’s often charities like Money Ready.
The 70/20/10 rule
At my Money Ready session, I admitted I wasn’t the most responsible spender, having fallen prey to the cycle of Buy Now Pay Later schemes. My Money Ready trainer taught me a rule of spending that can help when you’re in debt.
Using the 70/20/10 rule, you allocate 70% of your income to living expenses, 20% to savings and 10% to debt repayments.
There are other costs to daily life that make it hard for young people financially. Rising food and gym costs make it hard for young people to maintain their physical wellbeing, which, in turn, worsens their mental wellbeing.
Even those with jobs have to part with most of their income to pay extortionately high rents for tiny flats, expensive transport you can’t rely on and food so costly you can’t buy enough to get through the month.
Finding a way forward
The Money Ready session on budgeting and personal finances helped me to see which costs I could either reduce or outright get rid of, such as unused subscriptions.
I loved the session. Not only was the trainer very funny, but she sat down with me, went through my monthly costs and subscriptions and showed me ways to budget to give me a bit more wiggle room in the month. She helped me understand how a savings account could work for me and taught me how to open one, which I’m proud to say is not completely empty right now.
I’m writing this as a debt-free, independent young person. I’m not rich, not by any means, but I live in a flat on my own and I can pay all my bills.
I want to tell any young people reading this that there are ways to help yourself. Attending the financial education session with Money Ready was a great step forward for me.