While raising my children I’ve always tried to teach them how important it is to manage your money wisely, and now as they become young adults they are getting the chance to put this into practice.

I’ve been reading today that the government are planning to make students pay back their student loans at a lower income threshold, and I have to say that it does make me worried for my children’s future and the whole of that generation.

Not only do they have to take on this colossal debt in order to receive an education, which will have an impact on their ability to raise finance for mortgages etc. in the future, but expecting them to pay it back while they are still on pitifully poor salaries in their early twenties, just runs the risk of causing all kinds of problems, both financial and also relating to their wellbeing and mental health.

As a parent of one child at university and another one who will almost certainly go there too, I’m worried. There’s not much I can really do about it, but one thing is to try and teach them some basic, simple lessons about managing their money, like the ones set out below.

Manage your Money – Track your Daily Spend

The first step is to figure out where your money goes each week/month so that you know where spending leaks might be. The simplest way to do this is with a daily budget tracker that notes your spending each day.

Everyone needs a method that works to follow their money habits, so try out several budgeting programs to see which works best for you. Set aside fifteen minutes every Sunday evening to review your spending for the past week so you can know where you are, and start to make changes if you need to.

Eat When You’re Hungry

Rent is a given and a fixed cost, but after that, the weekly food spend is one of the biggest parts of a young person’s budget.

If you know you’re hungry, eating is a simple decision. However, it’s easy to make other choices when you’re famished, and often those choices are more expensive. One way to minimise the cost of those other purchases is to plan for food expenses by budgeting carefully. Eating out every day is probably not affordable in the long run, so plan how much you can eat out and focus on buying healthy, cheap, and delicious staples to prepare at home for the other days

Stop Buying What You Want

It’s easy to justify expenses that are fun or exciting, but these purchases could eat into your savings if overspending becomes a regular occurrence.

Before you make any significant purchases, try to think about how often you’ll use the item. If you know for sure that you’ll need it every month, consider making the purchase now instead of waiting until it comes in handy. If you know you won’t use the item as often as you’d like to, it’s better to delay your purchase.

Consolidate your Loans

My advice to my children is to not get into debt (apart from student debt) at all if you can help it, but I know this is not possible for all young people. If you do start to amass debts, one very helpful thing you can do is to merge your loans. Whether it’s a credit card, payday loan, or some other loan, paying off as many of those as possible can reduce your available debt.

Merging loans will usually cut down on monthly payments and the interest you’ll pay on that debt. You can take out debt consolidation loans bad credit to help you pay off all the loans to one company and avoid having so many people breathing down on your neck.

Open Up to Someone You Trust

I’d like to hope that my children would come to me if they were in difficulties, and hopefully, we would be able to help them. But if you find yourself stuck and seeking help from parents is not an option, it’s still a good idea to talk to someone. When you are in debt and struggling with money, it can be scary, but talking about your worries can help them to appear more manageable and can help change your habits for the better. If you’re unsure where to start, there are plenty of helpful organisations that offer free financial advice.

Even if you don’t feel like your financial situation is dire, and you’re just looking to streamline and improve your money management habits, it’s worth talking to a financial advisor about where your money is going. They can help you put together a plan to get out of debt and achieve financial security.

Summing Up

If you want to achieve financial security, it’s essential to adopt good money habits to be prepared for the future. We never know what is around the corner, and the current generation is unlikely to have things as easy as we did. Whatever happens, it’s good to be frugal and adopt good budgeting habits right from the start.

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