Seeding Change

Bright Beginnings

Germinating Seeds


Like a germinating seed, our financial journeys all start somewhere.

Leaving school, college or university is quite often the first time we learn to manage money. Some of us are naturally good at managing our personal finances, and some of us not so much.

With only 4 in 10 young people confirming that they have had some financial education at school [1], learning the basics of how to manage money usually comes gradually with life experience – and quite often, when we run out of money, make a mistake, or find ourselves in moments of financial distress.

Getting into good money habits early can set you up for life. In this guide, we’ll explore the jumping off points to consider when starting your financial journey, to help you feel in control of your money – and your future goals. 

Learning to budget

For many of us, leaving the family home and starting university or work is usually the first time we manage money ourselves. Rent, utilities, the big food shop – often, we spend a large amount of time counting down until that next pay day, or regretting that impulse purchase we made at the start of term.

Managing our essential expenses, and if we’re lucky, surplus income, is a skill that we need for the remainder of our lives. Training yourself to live within a set limit can mean more freedom as we grow ever more successful – your future self will thank you!

Budgeting for essentials should always be a priority – essentials are the things we simply cannot live without, such as food, energy and a place to live. Managing the excess above this amount is sometimes where we run into trouble.

There are various budgeting tips and tricks available, for example:

  • Set up essential direct debits, such as utilities and rent, immediately after pay day. Everything is paid at the same time rather than throughout the month, meaning you can sensibly manage the rest.
  • Separate your pay into two different bank accounts – one of bills, that you can’t touch, and one for general spending.
  • Check your household bills regularly and make sure you are getting the best deals available.
  • Be wary of short-term borrowing and repaying expensive short-term loans. Learning that ‘when it’s gone, it’s gone’, can be a difficult but valuable lesson.
  • Try reviewing your spending at the end of each month. What could you have saved money on? What did you really need, and what could you have gone without?
  • Look after your mental health – feeling down makes it harder to think critically about our financial circumstances. We all deserve a treat now and then, and to look after ourselves.

Saving early

The current cost of living is high and many of us are not fortunate to put aside big savings each month.

But there is nothing wrong with starting small. Putting aside a small amount, be it £10 or £20 at the start of the month, can leave us feeling a huge sense of fulfilment by the end, even if it’s just enough for a takeaway.

When we start out, it is not the amounts that matter, but simply allowing the habit to form. Gradually over time, as our income increases, it will feel natural to increase your savings amount each time, adding up to a healthy pot and more confidence in our ability to manage money.

Like learning to budget, learning to save is a lifelong skill. Savings can be viewed as short-term, for example, saving up for a holiday in 6 months’ time, or longer-term, such as big purchases like new vehicles or a house deposit. Selecting a good bank account with a good interest rate is usually the first step for our longer-term goals.

Understanding compound interest is another important factor – the interest earned on your initial savings earns you more interest in the longer term. Think interest, earned on interest, earned on interest, reinvesting itself over time to grow your savings.

Once the saving habit is formed, you can explore other saving options that can grow your money further – like investing.

Emergency funds

Investing money into ISAs or other general investment accounts feels exciting and is the natural next step after establishing your confidence in money management. But it is prudent to make sure you have a safety net in place – usually three to six months of your essential expenditure that you can access quickly in the event of an emergency.

Emergencies can come in many forms – losing your job, the end of a relationship, falling ill and taking time out of work. Sometimes we end up with an ad-hoc bill we were not expecting.

A pot of money left aside to cover these expenses can help provide a sense of security, and should always be a consideration before jumping into investments that put your savings at risk.

Pensions? Definitely worth it

It is fair to assume that most of us don’t immediately walk into our dream career – and our dream income. The average graduate salary in the UK for 2021 was £25,787 [2] – compared to the average cost of living and renting in a city centre at £18,480 [3], excluding travel. This leaves very little surplus income for spending on ourselves.

Add into this mix the impact of pension contributions deducted from your income – under auto-enrolment rules, you contribute 5% of your income each year to a personal pension, although you can opt out if you do not wish to contribute.

But should you? It is difficult to weigh up – £107 deducted from your salary each month can feel like a huge amount of money, especially when retirement may not have crossed your mind.

However, the effect of compound interest on your early pension contributions can be huge, meaning smaller contributions when you are young are likely to be more important than larger lump sums or savings later in your career.

An investment of £10,000 into a pension, growing at 4% a year for 40 years could be worth £49,398.

Compare that to the same investment growing at 4% for only 15 years – the final value works out at much lower at £18,203.

In fact, the final values will likely be much higher, as pension contributions attract tax relief – the government repay tax on your contribution based on the highest rate of tax you pay. Under auto-enrolment rules, your employer must also contribute to your pension too.

Your pension savings are locked away until your minimum pension age (currently 57) meaning you can’t access your money for some time. Other investment accounts such as ISAs apply the same principle – but allow you access when you need to, rather than locking up money for your retirement.

Long-term goals

While you are young, and hopefully carefree, thinking about long-term goals such as your future family and retirement can feel like several lifetimes away.

But establishing goals early on – even if they may seem like a long way off – can help give you the drive to make small, impactful changes, whether that be choosing a better savings account, choosing to invest for longer in an ISA, or re-joining your workplace pension.

Talking honestly about money

Talking about money has always been considered a taboo – whether it be with colleagues, friends, prospective partners or family. We avoid talking about money for a number of reasons – fear of being judged, fear of appearing arrogant, or we were simply brought up to believe it rude.

Money is an emotive topic. Opening up about it to the right people can allow us to learn valuable life lessons from others who may have struggled or have other financial wisdom to impart. If we are in financial distress, help and advice from our families can be invaluable, as is knowing we have a support network to help us through the bad times. It does not always need to be an extreme discussion – simply asking a friend who they bank with, who they save with or if they pay into a pension can get the conversation going.

It does not have to be so gloomy, either. Getting confident in managing our finances is something to be celebrated, and lessons we learn from our mistakes could be an important mentoring moment for a close friend about to do the same. 

Moving in and blending finances

Being honest and open about your finances is never more important than we you are considering blending yours with someone else – moving in with a new partner, for example.

Gone are the days where we marry and hand financial control over to someone else. There are lots of aspects to consider when it comes to blending finances – what if one of you earns significantly more than the other and how will you split bills? Is it worth getting a joint bank account for your joint expenses, or keeping your finances separate? What if one of you owns property – how will you tackle mortgage payments, who will pay rent? What happens if you have significant debt – how will this impact on your household budget?

Early in a relationship, these questions may not seem important, however understanding your partner’s relationship to money, as well as your own, can help to avoid problems later. Try talking to your partner ahead of moving in – how do they feel about money, what was their relationship with money growing up, have they ever experienced financial difficulty?

The most important point you need to consider is how you feel about blending your finances. If something does not feel right, or you feel pressured into an unfair financial situation, take the time to think it over and talk with someone you trust.

Further information and support about Financial or Economic Abuse can be found here.

Seeding Change - Bright Beginnings

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    Bright Beginnings

    Like a germinating seed, our financial journeys all start somewhere.

    Forging a Path

    A Sprouting plant – no longer a seed but some way off being fully grown, this stage of your life can feel a little like limbo.

    Finding Balance

    There are a lot of changes that can take place in your Growth phase – switching your career, raising a family and finding the right work / life balance.

    Time to Thrive

    Our blossoming stage of life comes with an entirely different set of financial decisions.


    Achieving financial independence is the moment when our hard work pays off and we take the step into retirement – in one way or another.

    Sowing the Seed

    While our later years are time for us to relax and enjoy our retirement, there are still areas of our personal finance that require careful management and ongoing planning.

    As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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    The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

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