15 Session round-up

You’ve covered a lot of ground in this session.

You examined the variety of directions that school-leavers can take and the things that they need to know as they move into adulthood and the next stages of their lives.

You also examined how controlling personal finances through effective budgeting becomes both more important and more complex. More important because, on leaving home, you have greater responsibility for running all aspects of your life including financial management. More complex as the items on both the income and expenditure sides of your budget grow in number and complexity. More complex, too, because as a young adult living away from home you are likely to experience social pressures that will impact on the way you live and spend your money.

You looked at the finances of going into further and higher education – studying for a degree is likely to mean accumulating a large debt courtesy of the student loans advanced to you. Getting your head around how student finance works is essential for those planning to study after leaving school.

You should now be able to:

• understand the choices available to you when you finish secondary education
• understand how you can finance further and higher education studies
• take advantage of the deals and discounts that are available for young adults
• build a more detailed budget that you can use when living away from the family home
• understand the budgetary pressures that can arise when you live away from home, and how to manage these.

To finish the session watch this video where Martin Lewis talks about the importance of being financially and socially savvy when you leave home.

Download this video clip.Video player: mmmft_1_video_week4_lewis_getsavvy.mp4

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Transcript

MARTIN LEWIS:

This is very important. You're going to do a budget. You're going to work out everything you spend money on, really important. You're going to calculate it all.

But the one thing they never tell you is the most important thing. It's fine to know how much you're spending, but you need to know what you shouldn't spend more than. What is your income as a student? It's not what you earn, because you don't earn.

So here's the answer. It is your student loan living allowance, the money given to you by parents, any money you have from working. It is not your zero per cent overdraft. It is certainly not money borrowed on credit cards which is a really bad form of debt to be a student. And it's definitely not a payday loan.

You need to calculate your income before you work out your expenditure. If you don't know both sides of that, you cannot do a budget. A budget is about how much do I have to spend? What am I spending it on? How do I keep control?

And just to give you the perverse logic that not all of you will do, but I may as well say it anyway. The best time to party as a student is the day before you get your next living loan payday, not the day after you've just received it. This is what most people do in the first year. You've just been given a check for a couple of grand. You've never had anything like that before. It goes in your bank account. I'm loaded, and I'm going to get loaded tonight.

And that's the way that you will think. Am I wrong? No. You see? So that's the way that you'll think. And so you'll go out those first few days seeing that money in your bank account, partying, and it's going to feel fantastic for a few days. And then the rest of the term, you're going to be eating cold baked beans. Just cold baked beans, not even the toast to put them on because you spent all your cash.

So the best thing to do is do a budget. Be sensible. I'm not saying don't go out. I'm saying understand it. By the way, when you're going out, it's worth setting a limit on how much you're going to spend that evening. If you're going out with a group of friends, take out a set amount of cash with you. Make sure you've got a way to get back. Looking after your own personal safety is important.

Remember that alcohol. I'm not going to tell you not to drink for your health. You know all about that. Drinking, you're going to do it. Alcohol is really bad for your pocket because it gets rid of your impulses, and it gets rid of your self-control in all areas, including spending money. And you go and spend a lot more money than you think. And one big party can actually really throw you out for the rest of term when you're living off a limited budget.

So think about that quite carefully. Do your budget. And if you want to go out and splurge, have some left at the end, so you can go do it with a good conscience. Really conscious, it's really important to think how to budget that way.

End transcript

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When you leave home to go to university or to move into a job away from your home town the likelihood is that you will, for some time at least, be living in shared rental accommodation. This situation brings with it particular financial responsibilities and pressures. For many it is a problematic time financially as you get the hang of having your own home. So in the next session you focus on how to manage your finances in shared rental accommodation.

You can now go to Session 5 [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .

If you are a teacher working with young adults, you might find this additional guidance for teachers helpful.