There are bundles of tips and tricks for 16- to 25-year-olds to plot the path to financial independence without getting ripped off.
The best place to start saving is a Help to Buy ISA
Whether or not you’re actually going to end up buying a home with it, if you’ve spare cash to stash, a Help to Buy ISA is a sensible place to start. The interest rates are high anyway (about 2%) – and if you do use one to buy, the state will add a further 25% free cash to your pot (up to £3,000).
You can save £1,200 in the first month and then £200 per month after that. You need to save a minimum of £1,600 to get any bonus, and the maximum you can pay in is £12,000. For full info on how it works, plus top picks, see our Help to Buy ISAs guide.
Starting to save can be seen a little like a fountain – put your cash into the best-paying savings option possible, then when that’s full and overflowing, fill up the next best, and so on.
Renting? Take five minutes to check your deposit’s protected
Handing over a huge rental deposit is never nice, but the fear of not getting it back at the end of your tenancy is even worse.
Thankfully, if you’re in England or Wales, your deposit is protected by law, meaning your landlord can’t simply raid it if they think you’ve broken your tenancy rules. Instead, they’d have to be prepared to go to an independent dispute service to fight their corner.
And there are big penalties if your landlord fails to comply with these rules, as MSE Jenny found:
My landlord didn’t protect my deposit and didn’t give it back so I went to court and got back £4,850 (incl court fees) from a £1,020 deposit. It was easy.
Get paid to drink (yes, really)
It may sound too good to be true, but if you’re 18 or 19, you can actually get paid to go to the pub.
Serve Legal currently employs around 2,000 mystery shoppers across the UK and Ireland to check whether staff in pubs, bars and supermarkets ask for ID when selling alcohol (it also checks other age-restricted products such as lottery tickets).
You can apply to become a mystery shopper via Serve Legal’s site. You’ll have to submit a recent photo and copies of your passport and the photo ID you use, and need to be observant, accurate and dress ‘young’ when testing a premises.
The area manager will brief you before each visit if you’re selected. You’ll be required to file online reports within 12 hours of a visit so you’ll need internet access. You’ll also need to be willing to travel around your local area.
Visits typically take between three and 12 minutes, though some can be longer (and if you want, you’re usually free to stay). You’ll be paid for your time (typically between £6 and £8 per visit but in some cases up to £20 per visit), but you may have to buy a product with this too, plus you can claim expenses such as travel and entrance fees.
Get 3% interest on your income
Getting your first job, whether full- or part-time, means you’ll need a place to store your cash. Make your money work harder for you by choosing the right bank. Don’t get sucked in with ‘freebies’ – you might pay for them in the long run.
The options below are all free to use and have online banking. They come with a debit card you can use to make payments in stores and online, too, as well as to withdraw cash.
- TSB’s Under 19s Account pays 2.5% AER interest up to £2,500 and has discounts on driving lessons with the AA. Lloyds also offers an account with similar benefits, though it only pays 1.5% interest.
- Santander’s* 123 Mini Current Account for 11- to 18-year-olds pays 3% in-credit interest on balances from £300 to £2,000.
- NatWest’s Adapt account, for 11- to 18-year-olds, gets you 1% AER interest. As an added gimmick, you can upload an image to go on your debit card (for £5). It’s not worth getting just for that though.
You don’t need a TV licence for non-BBC content on demand
If you’d rather not fork out for a TV licence, you can instead watch movies and box sets via film-streaming sites and catch-up on your favourite programmes online (as long as it’s not on BBC iPlayer).
You only need a TV licence if you’re watching live TV – meaning as it’s being broadcast – or, as of 1 September, if you’re watching BBC iPlayer (including catch-up). So if you just stick to streaming movies and watching on demand, you don’t need to pay the £145.50 licence fee.
If you’re a student, you can also check to see if you can get a £36 TV licence refund for the summer hols.
Trick to get a 16-25 Railcard until you’re almost 27
The 16-25 Young Persons’ Railcard costs £30 for a year (or £70 for three). It gives a third off most rail fares, including advance, off-peak and anytime tickets, and you’ll also get a third off London travelcards and off-peak Oyster travel. It can be used anytime, though if you’re travelling before 10am on weekdays the minimum fare after the discount is £12.
Despite its name though, there’s a great loophole which lets you keep on using it even after you’ve turned 26. Simply diarise to buy a three-year Railcard the day before your 24th birthday (or a one-year Railcard before your 26th) to get the discount almost until you turn 27.
If you’re not due to renew your existing Railcard (which you can do up to 30 days before expiry), there’s nothing to stop you buying another 16-25 Railcard using a different email address if you want to use this trick.
10% off one-year 16-25 Railcard code
Until Fri 30 Sept, if you go to the 16-25 Railcard website and enter code SAVE10OCT, you can get a one-year Railcard for £27 instead of the normal £30. That means it’s worth grabbing one if you spend £82/yr on train tickets.
Slash sky-high car insurance costs – save £1,000s
Finding affordable car insurance can be a nightmare – the average for a 17- to 22-year-old is £1,271/year. Our Young Drivers’ Car Insurance guide has a step-by-step system to slice off every spare penny. Here are some points to bear in mind…
- Do you really need it? For some, a car’s a must. But you need to weigh up what it costs – insurance, servicing, etc – versus how much you use it. If you work in a big city, you may want to consider public transport instead.
- Consider a telematics policy. Telematics means your premiums are determined by how you drive. A device inside your car monitors your actions behind the wheel. So the better your driving, the less you pay for cover. Telematics has many aliases, so if you’re looking at ‘black box’, ‘smart box’, ‘pay-as-you-drive’ or ‘usage-based’ insurance then you’re looking at a telematics policy.
- Specific young-driver brokers. While comparison sites are good for typical drivers, they may not find the best rates for young motorists. Check specific young-driver brokers separately – there’s a full listing in the Young Drivers’ Insurance guide.
- Learner driver insurance. If you’re a learner, it often means being added to parents’ or friends’ car insurance as an additional driver. This can up the cost and put no-claims bonuses at risk. But you can get specific policies just for provisional drivers – find full info on all these and more in the Young Drivers’ Insurance guide.
- Don’t forget to update your address if you move. Always tell your insurer where your vehicle is usually kept. Where you live has a massive impact on your premium.
- If you have a part-time job, tell your insurer. If you forget to declare it, even if you don’t use the car to get to work, it could invalidate future claims.
- If your car’s uninsured, ‘Sorn’ it. All cars need to be insured unless declared ‘off-road’. The only way to do this is to apply for a Sorn (Statutory Off-Road Notification) declaring your car won’t be driven. However, you do have to park on private land, so you can’t leave it on the street.
- Time to build your credit score – and paying your rent on time can help
At some point as life moves on you’ll probably want to get a mortgage or borrow. For that you need a decent credit score – and that can be tricky if you’ve little credit history.
To help build one, there’s now a trick to make paying your rent on time help boost your credit score. In a nutshell, you pay your rent to third-party company Credit Ladder so it can record your payment; it then forwards your cash to your landlord, and tells credit scorer Experian whether you paid on time.
Don’t splash the cash as soon as you’re paid – BUDGET!
Learning to manage your money is a priceless lesson – and the only way to avoid getting into debt.
This isn’t about living a monk’s existence – if you’re earning money, you can still aim to have that holiday/games console/iPad. It’s just that doing a proper budget is the only way to do this, while keeping up with your bills and not ending up in unplanned debt.
The key here is to not just splurge on the day your pay packet hits your account. Use our Budget Planner – which tracks all income and outgoings – and stick to it. If you end up with excess cash the day before your next payday, that can be spent on a little of what you fancy (or even put into savings…).
If you’re skint, ask:
Do I need it?
Can I afford it?
Can I find it cheaper anywhere else?
If you aren’t skint, ask:
Will I use it?
Is it worth it?
Can I find it cheaper anywhere else?
Paying for gas and electricity for the first time? Find the cheapest
If you’re moving in on your own for the first time, you may get a shock when you open the first gas bill. Prices are high, but you can attack this by doing a quick comparison and switching provider. (If you’re renting, check with your landlord first, but they can’t refuse permission to switch.)
- Switch to a cheaper provider. If you’re on a standard tariff, it’s possible to save £300+ a year on your annual bill by switching, and even grab cashback on top. Our free Cheap Energy Club takes it a step further and monitors your tariff once you’ve switched. It then alerts you when you can make a decent saving.
- You don’t need to know how much your bill will be. Even if you haven’t a clue what you’ll be paying, you can still enter your house or flat size on some comparison sites and they’ll estimate for you.
- Watch out for exit fees. If you’re on a longer contract or thinking of signing up to one, be aware that suppliers can charge exit fees if you leave before your the end of contract, typically £30 per fuel. So always check and factor this in.
- On a prepay meter? You’ll know if you’ve got one – you’ll always need spare change lying around to heat the place, and you definitely haven’t got the cheapest deal. To save, first try switching to a ‘credit meter’. If you can’t, do a comparison to find the cheapest prepay provider and you could save £100s. See the Prepaid Gas & Elec guide.
- Should you leave the heating on all day? For the answer to this and other conundrums, see our Energy Mythbuster guide.
Plus, while we’re talking utilities, check if you can save £100s with a water meter.
Get £100+ for switching bank account
Yes, you heard us right: banks are willing to bribe you with cold hard cash to win your custom.
You often need to meet some conditions, such as using their switching service and having a number of direct debits, but there’s a seven-day switch guarantee meaning it should be easy and hassle-free. All payments going in, such as your wages, and any going out, such as your mobile phone bill, will be moved to your new account.
The best option for you may depend on what state your finances are in though:
- If you’re in credit… You can go for the £100+ switching bribe. For full tips on switching and how to decide which account is best for you, see our Best Bank Accounts guide.
- If you’re in your overdraft… Head to the overdraft section of Best Bank Accounts. If you were a student and have graduated in the past three years, see Best Graduate Accounts.
- If you’re a student… See what 0% overdrafts and freebies are on offer in Student Bank Accounts.
Travel the country for £1.50 or save by splitting train tickets
Time it right and you can bag £1 Megatrain fares (with a 50p booking fee) to almost 20 destinations across the country.
But don’t be fooled into thinking you’ll be on a go-slow loco – Megatrain simply flogs unsold fares from other companies so you’ll be on the same train as everyone else, eg, for London to Bath Spa it’s South West Trains.
Another trick is ‘split ticketing’. Instead of buying tickets for the whole train journey, bizarrely, buying tickets for its constituent parts separately can slash the price – even though you’re travelling on exactly the same train.
Our revolutionary TicketySplit tool helps you do this. Tell it your journey, and it’ll tell you where to split and the saving. This unique tool splits advance tickets as well as on-the-day tickets – often where the supersonic savings are. See Split Ticketing tips for a full how-to.
Finally, if you don’t mind taking a slightly more scenic route, the National Express Young Persons Coachcard gives you a third off travel (both peak and off–peak) and until Fri 30 Sep you can get it half-price for £5 (plus £2 P&P) via MSE Blagged Deal. It usually costs £10 for the year, or £25 for three years (plus £2 P&P).
Remember, a company’s job is to make money from you
It’s not your friend and it’s not there to help you. Most companies aim to make as much profit out of you as possible. It’s your job to stop ’em.
Firms spend billions on advertising, marketing and training sales staff, all to make you part with your cash. And once they’ve got it, they’re not likely to care if you’re still getting a good deal a year down the line.
Don’t swallow their promises and marketing power. Always remember that if a firm’s paying to advertise something hard to you, then it probably needs you more than you need it. Remember this and look with a sceptical eye. For more, see the Free Teen Cash Class PDF and the full Financial Education Campaign section.
Get a YEAR’s 2for1 cinema for £2ish by manipulating Meerkat Movies
Even bog-standard cinema tickets can soon add up to an eye-watering amount, but this nifty little trick will cut that bill in half.
If you buy insurance or another product through Compare the Market, it entitles you to a year’s 2for1 cinema tickets on Tuesday or Wednesday at most of the big chains.
But Compare the Market isn’t always the cheapest place to get the insurance you need, so this trick is about finding the cheapest product (not necessarily one you’ll use).
Make £1,000s online from the comfort of your sofa
We’ve got 35 legit ways you can make money online, including getting paid for your opinion, watching videos and even googling.
Even if some seem to pay only small amounts, these can soon add up to £1,000s over the year, eg, survey site Swagbucks alone pays some an average £25/month.
For the full list of tricks, see Make Money Online.
Your earnings are never all yours – say hello to the taxman
The first payday you ever have is always a magical moment. All this money, that’s all yours – a reward for hours of hard work. Result.
But then you realise some of it belongs to the taxman. And then there’s some to pay for your access to free healthcare and a state pension when you’re old and bald or grey. This is known as national insurance (NI).
For all employees who get paid through a company’s payroll (often referred to as PAYE – pay as you earn), tax and NI will be taken off before your cash hits your account.
You’ll be given a tax code to determine how much you should pay above the tax-free allowance of £11,000. For most, unless you’re earning megabucks, it’ll be 20%. But check how much you should pay with the Tax Code Calculator. If you’re paying too much, you could be owed a refund.
Cut phone bills – even on PAYG
If your monthly top-up or bill costs leave you needing a lie-down, try to slash the expense.
Here’s a host of tips and tricks that can help:
- Pick the right contract. Use your bills from the last few months to pinpoint your average usage for calls, texts and data. Then use this to find the cheapest tariff for your needs using comparison sites such as MobilePhoneChecker*, Billmonitor* and MoneySupermarket* – full step-by-step help in Mobile Phone Cost-Cutting.
- Haggle, haggle, haggle. If you’re nearing the end of your contract, test out your haggling skills to get the best deal possible. See the Mobile Phone Haggling guide for tips on how to give your haggle some chutzpah!
- After an iPhone? These aren’t MoneySaving, but it’s possible to pay less and get a shorter contract if you know where to look. To quickly compare tariffs, use the tool in the Cheap iPhone guide.
A pension? But I’m not even 25…
True, but if you like the life you’re used to, you’re going to have to figure out how to pay for it when you retire. And the younger you are when you start, the easier it’ll be as the cash you save has decades to grow.
Think of a pension like a pot of cash you, your employer or the Government pay into to save for your retirement. Plus if your employer pays in (which it’ll soon – if not already – have to, thanks to a new scheme called auto-enrolment), it’s like getting a pay rise. You may not benefit immediately, but you certainly will in the future.
If you want to know roughly how much you should pay in, take the age you start saving for your pension and halve it – this is the percentage of your salary you should put aside each month.
