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Many young people are now moving on from school to other forms of education, or employment. Abby Young-Powell takes a look at how to manage the money side of things. Abby is a freelance journalist and was previously a deputy editor of Guardian Students.


A new chapter of your life begins when you leave school. Whether you’re 16 and starting work, heading to university at 18, or still figuring out what you want to do; it’s a big transition and you’ll have to take care of yourself - and your money.

“It’s quite a key time because many young people will have to manage money by themselves for the first time,” says money coach Kim Crewe.

This year it’s even more important for young people to be financially savvy. The coronavirus pandemic has led schools to shut and exams to be cancelled. At some universities the lectures may be entirely online until next year and restaurants and bars, often a source of part-time work for young people, may be running at reduced capacity due to social distancing.

We spoke to experts to find out how young people can stay in control of their finances when they leave school this summer. Here’s what they said.

Get the basics sorted

It’s good to start off as you mean to go on; develop good money habits now and they’ll stay with you for the rest of your life.

If you haven’t already got one, you’ll need to set up a bank and savings account. “Get a bank account as soon as you can because it will help you get a credit score, which will help at a later stage,” says Kim. You might need to shop around a bit and do your research to find a bank account that suits you, as all have different benefits. Starling has an easy-to-use account for 16-17 year-olds, which offers instant payment notifications and spending insights, for example.

If you’re working, you’ll get payslips and you’ll need to understand them. “It’s so empowering for young people to understand that this payslip shows you exactly what you’ve earned and exactly where it’s going, regarding tax and national insurance,” says Talia Loderick, a money coach who delivers financial education workshops for young people.

It’s a good idea to keep payslips for about two years, so you have a record and can check everything. “Make sure you understand the terms, such as that NI is national insurance,“ Talia says. “You need to understand it so you can make sure it’s correct,“ she says.

Put together a spending plan

It helps to think of this as a plan for your money, rather than a budget. “It’s not a restriction on what you can spend,” says Talia. “It’s a positive thing.”

There are a number of online resources that help young people to create a plan, or budget; websites like the Money Advice Service and Money Saving Expert. You can also budget easily through Starling’s banking app.

But, ultimately, it doesn’t matter how you put together a plan, it just matters that you do one, says Nick Smith-Patel, head of education for young adults at MyBnk, a charity that delivers financial education programmes for young people. “Some people will do it on a bit of scrap paper and that’s fine, as long as you know what you’ve got coming in, what’s going out, and what the difference between those two figures is,” he says.

Keep in control of your bills

When you get paid, whether through work, funding, or university loans, it’s a good idea to pay your bills straight away. “Take away the priority expenses - such as your bills for heating and electricity, first,” Kellie McAlonan, student funding team leader at the University of the West of Scotland, says. “You should always pay those bills before you purchase something that’s not a necessity,” she says. Once you’ve paid those, you can take a look at what’s left.

If you have a problem and can’t afford to pay a bill, it’s important to speak up about it early and to try to solve the problem. “The number one mistake is for people to panic and bury their head in the sand,” says Nick. “Speak to someone about it and let the company know how much you can manage to pay.”

When it comes to housing and accommodation, decide what you can afford before you start house-hunting; remember you will have to budget for gas, electricity, water, internet and a TV licence, so ask which bills are included. Take a look at the Shelter guidelines to know what your rights are. When problems arise, take photographs, and at the end of a contract be prepared to dispute deductions from the deposit if you feel charges are unfair. If you are going away to a college or university, make sure you’re aware of any residency options they offer and how these may be affected by the coronavirus situation.

Make your money last

Part-time work for school leavers may be harder to come by this summer, as social distancing measures have hit the hospitality and tourism industries. There are still jobs to be had, however. You could seek out work at an employer like Sainsbury’s, with Deliveroo, online, or by being part of a research focus group, for example. Nick says young people shouldn’t feel any shame about turning to the welfare state if they need to, either.

Whatever you do, you’ll want to be a bit savvy with your money. It’s wise to use price comparison sites to get the best deals possible. Reusing or repurposing clothes or furniture is good for the environment, as well as your bank balance.

Another tip is to wait 24 hours before you buy something if it’s not something you need. “It takes about that time to settle down after you get that initial adrenaline spike,” Nick says. “You might also get offered a discount through abandoned cart emails.”

If you’re planning to go to university then you might want to get a Totum student discount card. The card offers discounts at a range of stores, from Asos to Apple. You can also get second hand or library books, rather than splashing out for new course books.

Develop a savings habit

Money is tight for many people at the moment, but putting a small amount away regularly adds up. “[For young people] it’s about building good habits,” says Talia. “To do that you need to start small and repeat the habit consistently,” she says. It might seem small or pointless, but it will help you to pay bills when times are tough, or to treat yourself.

You can revise your financial plans as you go. “Put aside time each month to think about money and to set some goals,” says Kim. “It’s helpful to have visions for the future to work towards.” Abbey Carter, 18, says she’s been putting money aside each month from her job to save for a car. “It definitely helps to have a goal for the money,” she says.

Ask for help

Don’t be an ostrich and bury your head in the sand; there’s no shame in talking about money, admitting you don’t understand something, or asking for help. If you’re heading to university, McAlonan says, individual universities will have teams of advisors who can point you in the direction of the best unique schemes for that community or university.

You can also talk to family, friends, your bank, or your boss, or get help from organisations like the Money Advice Service or the National Youth Agency. “People will struggle if they just bury their head in the sand and hope for the best,” says McAlonan. Instead, it’s better to be proactive and in control of your money. “If you do that you’re developing skills that will work for you for the remainder of your life,” she says.

The above article is intended as general information and does not constitute advice in any way. You should take independent advice if you have any questions about your specific circumstances.

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