How To: Manage Your Money

Disclaimer: I don't know a great deal about money and banking and don't claim to but I feel like I've recently got my head around it, largely down to one of my friends who seems to know everything there is to know about it and can explain it in an easy way. Since understanding money a bit better, I've tried to share this brief knowledge with a few of my friends when they've asked and thought I'd bring it here to try and help some of you as well. Managing money definitely isn't easy and is full of confusing terms but hopefully this will help explain in simple terms, some of the key things you may come across as a young adult, especially if you are heading off to university and you need to start understanding and managing money. I've done it in a Q&A style post and have answered the sorts of questions my friends asked as these seemed to cover most of the things I have a bit of understanding of and seemed to be the things people wanted/needed to know about most. Some of my answers are very brief and I haven't included all there is to know about that question/topic but I have done this to explain it simply and avoid creating more confusion. If you think I missed something important out, do let me know.

What is the interest rate? 
The percentage of the money in your account that you receive from the bank (on top of the money you already have in the account).
What is an ISA?
I tried to explain this one but there was so much information to take in and then explain that I got myself into a muddle, so to learn about ISAs, I recommend checking out this site, which answers some of the most important/most common questions about ISAs.
What is the best instant access savings account?
As far as I'm aware, Santander has the highest interest rate in an Instant Access Savings account at the moment but for the instant savings account with the 4% interest, you also have to have a current account with them. They also have high interest rates for a number of their accounts so it's definitely worth checking them out, but before you commit to one, researching is always a good idea!
Help To Buy ISA?
If you don't have one already I suggest you look into getting one as they seem to be a massive help to first time buyers. The idea is you can put up to £200 a month into this account and when you want to buy your house a few years in the future, you can get an extra 25% of your savings from the government, up to £3000.
What is a current account?
Account with regular money going in, used for everyday purchases.
Which is the best bank at the moment?
From what I've found and heard, Santander has the best rates in general at the moment but it depends what you want from an account, this changes regularly so it's best just to research the accounts based on your requirements.
Student account?
There are several bank accounts which offer student accounts so you can do a bit of research and find the right thing for you. One that I've looked at is Santander again which also offers a 4 year 16-25 rail card, which tends to help a lot of students out. There are a number of banks that offer student accounts with extra features and benefits, such as the rail card, to help students. To set one of these up, you may need to wait until you have your place confirmed, which will likely be on results day.
Switching accounts?
Switching accounts isn't as difficult or scary as it may seem, just do a bit of research and find the right bank for you, book a meeting with them and discuss through your options. Most will then do the majority of the work for you, opening an account, switching stuff over and getting the other account closed. It doesn't normally take much longer than a week to do either and they make sure you have access to that money in some way or another during the process.
What is a credit card?
You don't have to have the money upfront to pay with a credit card, instead you use it as a form of credit and then at the end of the month you have a minimum amount to pay back. If you only pay the minimum amount the balance will attract interest, this can be very high and can cause purchasing goods to become very expensive. Ideally you pay it all back each month and are charged no interest and can actually get cash back on some accounts. This type of account can be useful for building up a good credit score for when you want one in the future and when you want to buy a house etcetera but as you pay with credit, it can seem less real to some people and can therefore be easier to get into debt or other financial trouble with. If you can manage your money well and keep on top of paying it back then it's worth looking into but if that's something you think you'll struggle with then it might be best to stick with a debit card which can be easier to manage, until you feel ready to get a credit card.
What is a debit card?
With a debit card, you have the money upfront and as you pay for things, the money comes out of your account so you can't spend money you don't have, unless you go into overdraft.
What is an overdraft?
When you have no money left in your account but you still used the card to make a payment, the money can take you into overdraft, which many accounts offer. You can put caps on these and with some accounts you can stop them altogether. Each account works differently and has different prices but often you pay back a certain amount of interest on your overdraft as well as the payment.
How do I avoid going into overdraft?
You can set up text services with some banks so that when you reach a certain amount of money, a text alerts you and you can cut back on your spending if possible. In general, a method is just to manage your money effectively and try to stop your money ever reaching zero or minus.
Controlling money at uni...
I have what I think is a great plan and several others seem to agree and want to do the same thing, I plan to give myself a certain amount to spend each week. I will then pay my loan across to my instant access savings account and will transfer the money back to my current account in weekly installments so that I can see exactly what I have to spend each week and that way if the worst comes to the worst and I get close to or into overdraft, I have the money elsewhere to help myself out. Hopefully it won't come to that but at least I won't spend all of my loan at once and should only ever go over by a few pounds if I go over at all.

If you've found this useful and want to read more posts along the lines of finance and saving money but from a students perspective, my friend Poppy, started a blog this week all about those topics: MoneyMarlow and I've already gained some useful advice from it so I highly recommend checking it out!

I hope this has been helpful, if I've made some mistakes or missed something important out do let me know as it means not only am I misunderstanding but so are the people that read this. Thank you mum for reading through this and helping me make adjustments. Thank you for reading this post. If you want to see more posts, follow my social media accounts to see when I next upload.

Love, Steph x

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