To ask what financial advice you would give a new graduate?

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I am in my 20s and just finished university and hoping to get a graduate job soon. I grew up poor so the idea of having savings or being able to buy a house was something I had never really thought about until now. I know next to nothing about how to manage finances and it is something I can't really ask my parents.

I was wondering what kind of financial advice you would give to your adult DC when they are in their early to mid 20s just starting adulthood? How much should they be saving? What kind of amount in savings should they be aiming for if they want to buy a house?

I'm feeling a bit anxious as all of my friends from university have quite significant savings despite us all being new graduates and a few have parents who have got house deposits saved already for them. I feel quite behind and anxious that my adulthood is already not off to the best start which I know is silly... I also feel guilty as my attitude with money so far has not been great. Having money is new and I spend it on things I shouldn't (e.g. expensive makeup when I could make do with cheaper brands). I think because it has been so novel for me I have been spending it on the kinds of things I feel like I missed out on as a teenager. But I am putting my foot down now and aiming to be more sensible.

I know this is quite a broad and unspecific question and I apologise.

Have a monthly budget for yourself. A spreadsheet with a row for each item - take home salary, rent, council tax, electric, gym, food etc. Include every bill you get and make estimates for things like weekly food. Then take whats left and save as much as possible (10% or more would be great). The rest is for playing - clothes, bars etc. Pension is really important too. Pay off your credit card each month.

I should say buying a flat, not a flag.

Don't buy flags

7.5% into pension and look to up that to 10% in a couple of years when your salary increases. 20% into savings. Bills and enjoy yourself with the rest but don't fritter! Get a lovely coffee just not every day, food shop wisely, a new top and jeans of course but not every month. Cycle or walk to work if you can but don't stand in the pissing rain at 1am at the bus top get a cab! no point working hard for an income if you can't make your life easier.

End of month clear EVERYTHING you havent spent into savings and start afresh.

I don't quite agree with all the posts about eating out etc. I take a packed lunch every day and buy yellow label bargains at the supermarket but I will drop 200 on dinner with friends and have a fab night. That's what makes me happy. No designer clothes or fancy skincare or fancy gym for me but I never turn down cocktails or dinner. Find the balance for you.

I agree on spending where it brings you actual joy and/or makes your life easier.

Just don't fritter it away on crappy Pret sandwiches. Spend it on fab dinners with fantastic people who you are having a great time with.

Budget what you can afford and then spend it in the way that brings you most joy/fun/adventure

And yes, pay for a cab when that weird guy is following you. But don't spend it when you are just being a bit lazy or are running late because you were messing around.

(This is from experience of things I should have done differently)

Pension
Save 10% of basiC salary, 50% of any bonuses
Buy a house ASAP

Most importantly know your worth make good career choices, negotiate hard on salary and don’t be afraid to move on.

Absolutely agree with maximising your income!

And I’m a big fan of “save the raise” - I save it all now I’m in my 50s, but saved a portion of it for years before. So much easier to not spend what you’ve never had!

I think at your age, with friends around you with more money at the moment, just remember you don’t ever have to be embarrassed to say, “no, I can’t afford it.” To them - or to yourself.

It’s OK to order just a main course if out to dinner. It’s OK to wear a dress everyone has seen before to a wedding. It’s OK to say you’re ducking out of rounds and buying you’re own.

It’s also absolutely OK to say, “fuck it” and spend money sometimes!

But really think about what a treat is. We fall too easily into thinking that something is a treat if it costs money. The best treat I’ve given myself is a year’s salary as an emergency fund - the peace of mind is far more relaxing than any spa day or expensive candle!

Save, even if it’s only a small amount - live frugally and don’t go mad on spending once you’re earning a full time wage. It can be tempting after living on a tight student budget.

However don’t go so far the other way that you’re living on the most basic meals and turning down everything you’re invited to. You’re meant to have fun in your 20s!

Please don't feel anxious you sound you sound very ensigns. Your friendship group pines unusual. When I think back to most people I know at graduation there were lots of people with large student loans & student overdrafts. Few had savings & those from wealthy backgrounds had been offered money towards living expenses so the money was gone.

Fully agree with pension - start focusing on your retirement early & pay in as much as you can. Especially attractive if they match what you put in

Get in the habit of saving - lots of people don't have any emergency funds. Save a set amount each month towards a mortgage if that's important to you. Equally important is saving for emergencies so put aside money for that to.
Most banks offer savings pots ie Monzo to help you achieve this. If that's too confusing just open different savings accounts to keep the money separate.

Learn about critical illness cover/life insurance & protect yourself appropriately (and when you have them your dependents)

Learn about financial products - many young pepper are not financially aware.

Always shop around for the best deals to maximise money. Never auto renew. True of car insurance, travel insurance, contests insurance, internet provider etc. Great way to save money by always being on the best deals!

Like others have said look at your expenditure as well as your income.

If you’ve moved out of your parents’ house you’ll have a lot more money to save if you house-share rather than renting a one-bed flat to yourself.

Save an emergency fund of 3-6 months’ salary so that unexpected costs/job loss etc. don’t result in having to take high-cost borrowing.

If you are employed your employer will contribute to your pension if you do; not contributing would be like turning down part of your salary.

The only other advice I have is to not fall into the trap of comparing yourself to others, which is easy to do, especially when you're young. What your friends wear, what car they drive, simply doesn't matter. Never feel as though you have to "keep up" with anyone else when it comes to material things.

It helped me to write down everything I spent in a little book, nowadays im sure there are apps or spreadsheets that can do it for you. But it gave me an idea of where all my money was going nights out in the pub .

Work out a budget. Rent, bills, savings, commuting costs, clothes, holidays, food, gym, fun things, etc.

Don't compare yourself to others - someone will always be richer than you, but someone else will also have less. It's not a competition. Nowadays it's so easy to have a lot of shiny new things but not to actually own any of it - cars can be on hire purchase, new handbags can be on credit cards, and it's a dangerous financial game to try and keep up with the Joneses.

Start paying into a pension (as everyone else has said).

Yes to most of the above. Join your workplace pension now, and whatever the minimum contribution is, add 1% - it will make a huge difference over 30 years but actually cost next to nothing and if you start from your first pay you will never miss it.

Make sure you put money away for savings or investments on payday - it’s job one.

Buy a house as soon as you can afford one, even if it is not what you want. It is so, so much easier to pay a mortgage and save to move than rent and save to buy. Your property will appreciate in value and you can sell or re-finance to move and boost your buying power. A bit like the old adage of it’s easier to find a new job when you already have one.

Live within your means. I spent a long time with a lot of credit card debt and I couldn’t honestly even tell you what it was for, it adds up so quickly and takes so long to get out of. Don’t make that mistake. I now have a zero balance and it is so satisfying not having to pay hundreds a month to cover credit card debt from 10 years ago.

Definitely agree with learning about want vs need. I’m in my 30’s and still learning this - have a bit of an online shopping habit, but within my means so manageable although always room for improvement.

Don’t deprive yourself - enjoy your money, just budget for it so you enjoy a set amount not all of it. You will thank yourself in 10 years time.

Most importantly though - remember this is a learning curve. You won’t get it all 100% right from day one and that’s ok. The fact you are even thinking about this now is a huge positive. Good luck!

I think you are great for asking this. Best advice I can give (but not sure how it will land with everyone) is to work as hard as you cns now, in the first 5 or so years after graduating. I can see a massive difference between my friends who did well, got promoted etc whilst younger and therefore had any maternity leave etc and small children once they were at a higher wage - I absolutely appreciate that's not possible for all and life doesn't follow a plan.... But I think if you fritter those years straight after uni on partying it definitely has an impact. Good luck!

You are still young and you are not behind. Some people are given money to start them off but you, like I were not. You will get there i promise you. Start saving 10% of your salary each month and sort out a pension. Save as much as you can when you can but have some joy too.

Definitely download You Need A Budget (YNAB). It has completely transformed my finances in 12 months and I quite often wish I had been using it for the last 5 years.

If you get on a grad scheme they will have staged salary increases. I started off saving a small amount only 50 or 100 a month or something but then every time I got a salary increase I saved more and tried to live on the same as I was before. Lots of people spend what they have and can't go back to saving, it's easier if you take it straight out your salary and never get used to having a higher salary if that makes sense.

Also the early years of a pension are so important so put as much in that as you can afford

Buy property as soon as you can.

When DH and I were 24/25 (and just boyfriend/girlfriend) we probably could have afforded a really horrible studio somewhere. We rented a nice one bed flat in a nice area instead...still annoyed at myself.
We're 32 now and need 2/3 bedrooms in a good catchment area...should have got on the ladder when we had the chance!

1. Understand that saving is slow and incremental so just chip away at it
2. Avoid debt at all cost so buy things outright ie appliances if you can

Great advice here.

ALSO choose your partner wisely. Don’t get someone who fritters away their and your savings. Otherwise all the great things you have done so far will be wasted.

Lifetime ISA looks to be the new help to buy ISA, the government will top up what you put in it up to £4000 per year by 25% if you use the money to buy a home as a first time buyer.

Are you looking for a job in a specific location or are you willing to move? Property in London, SE, Bristol etc is expensive and for everyone who can only do what they do/earn what they earn in London, plenty of people earn the same there as they might in a nice northern city where they'd have a much better quality of life (or at least, a nicer house!).
Definitely start your pension as soon as possible, don't think you can't afford it just think of it as another non negotiable like tax.
I'd actually say don't rush to buy a house in your twenties if you're single and it's tiny and not necessarily in the best place. Prices aren't going to increase like they used to, rent might be a "waste" but so is paying massive interest on a 95% LTV mortgage and potentially paying to exit a mortgage and solicitors/moving fees after a couple of years if you meet someone and want to live with them. DO keep saving for a deposit though.
Learn to drive, if you haven't, even if you don't need to now. A great job could require it directly or indirectly and it can take a while to learn. It's an investment.
Get a credit card, use it at least some of the time but ALWAYS pay off in full.
Check Martin Lewis' website, full of lots of great advice.

Learn that it's not just how much you earn that matters. How you spend it is equally important, so spend it wisely. Anything you can save on everyday expenditure makes a difference to your net worth - and it's tax free. That's not to say you should be stingy, but be discerning in your everyday spending. It's quite easy to spend less and not really notice it in many areas if you shop wisely and save it for the things that are important to you

Lots of great advice and this is a great summary for spending 'rules'. The difference between buying lunch, breakfast, coffee at work every day vs pack up most of the time can be £200 pm or more. Add in shopping around and using discount codes and cashback websites, more money potentially saved when buying the same item.

Another biggy is a mobile phone. The latest high end phone contract can be £60-70 pm, yet you can buy a very decent Android phone outright for under £200, add in a Sim only contract for £10 a month or less and you've still got a perfectly decent phone service for about a quarter of the cost.

Make the moneysavingexpert website your friend. Read the budgeting guide, and see advice for things like first time buyers. Also read the newsletter every week for a wide range of tips to pick up good money management on an ongoing basis.

Be ambitious in your career and progress as far as you can, especially while young - find yourself a more senior mentor to help you do this.
Try to negotiate a higher salary each time you're promoted (but learn how to do it effectively).
Don't fall for imposter syndrome.
Start paying into a pension as soon as you can, and learn how to invest.
Build up a six-month financial buffer.
Don't land yourself with a dickhead partner and always be financially independent.

On the job front, unless you already have close ties to London, try and avoid getting a job that requires you to live within commuting distance of it.

A graduate job in London commits you to years of overpriced rentals and long commutes and you'll probably only be able to buy if you get a very well paid job and have a well paid partner too.

If you manage to get a job in another city, even if you earn less, you'll be able to buy a house within a few years, even if you're buying alone.

But if you have a good relationship with your parents and can find work locally, you could also think about staying home as long as possible so you can save a house deposit. But if you do that, you should pay your parents some decent board money, sounds like they could use a little extra income.

Maybe if you do this pay a quarter of your salary to your parents, use a quarter to live on and save half of it, so you should have some fun money and be saving a decent amount, while still helping your parents out a little. But that depends how much you earn and what your costs are, it might not work that way if your salary is low and you need to run a car to get work.

Budget, pension, save, avoid credit unless you can pay it all off the following month.