Level Up your Finances w/ Natalie Scott

Want to level up your finances as a student?

If your answer is yes… then today’s topic is perfect for you! I spoke to Natalie Scott (featured below) who helps people increase their financial literacy and manage their money and she gave so many gems as to how we as young people can do this. I’d recommend you get a pen and paper or a notes page as you read this one, it is packed with useful information.

What would you say is the most important thing to understand about your finances as a student?

You need to have an understanding of money and be able to control it. For many young people, experiencing money and handling it is a new thing so once you start handling money, you need to understand: what it is, what its purpose is and how you control and manage it. A lot of young people think it’s about how much you earn and whether you can keep earning more but if you don’t learn to manage your money, increasing your income won’t make much of a difference.

If you don’t mind sharing, what are some common mistakes young people make surrounding money or that you did?

For students heading off to university, a common mistake is taking out the maximum amount of student loans available when regardless of whether you need it or not. People think you only pay back the tuition fees but in reality, you pay back the tuition and maintenance loan with interest. If you need to take out the maximum loan available then do so but if you don’t then apply for the amount you do. For example, I applied for the maximum loan available and somehow I had enough money to buy a car.


Secondly, taking out an overdraft is something a lot of university students do when in many cases, you can manage your money well and live without the overdraft. Of course, it’s helpful to have the option if there’s an emergency or a situation outside of your control and you need the overdraft but just remember that it’s not there for take-aways and shopping trips.

For someone who might be about to start university, what advice would you give them regarding their finances?

For most people when you start work, you’ll get taxed around 20%. If the taxman can take 20% that we don’t ever see then we can at least take 10% and save it towards a financial goal. Whether you want to buy a car, pay for driving lessons or save towards a holiday, put a specific amount towards that goal each month.


Another thing I like to remind people is that one of the reasons we work is to be able to fund our lifestyle. If you’re a student and you have a part-time job, remind yourself of the reason you do that work: maybe you want to get on the property ladder or save for a big purchase. Whatever your financial goal, your work is what will help fund this aim and to do so, it’s important that you save.


It’s also really important to do your research and take advantage of accounts available to you for example a Lifetime ISA or LISA which allows you to save towards your first property or retirement. With a LISA, you’re allowed to save up to £4000 and the government will give you 25% on top of this. So, for every £4 you save, the government gives you £1.


So in summary, try to live below your means, save and take advantage of the different accounts and schemes available to you.

For a lot of students, it might be that they don’t make a lot of money from their part-time job, how would you recommend they save?

Regardless of how much you earn, you can save something. I encourage people to have a spending plan as this sounds less restrictive than a budget. Work out what’s coming in and what’s coming out: Is there any thing you can change in what’s coming out? Do you use your subscriptions? If so, can you share the cost and service with someone or a group of people? Things like Netflix and Spotify for example have family subscriptions where you can share the service with people and pay a lot less per month. It’s not about getting rid of all the things you enjoy but ensuring that they can all fit into your spending plan.

With saving, it’s motivating to have a goal in mind and then to put this into practice, work backwards. If you want to buy something that costs £5000 in 4 years, then work out that you’ll need to save £105 per month and £26 per week. Finally, automate the payment. It makes it easier to ensure that you actually put your target money away and it reduces that emotional attachment that can make it difficult to save.

Any tools you recommend for managing your money?

I love using Google spreadsheet to track my finances but if you prefer something digital: Emma helps you spend within your budget and Monzo is another really useful tool. Monzo allows you to save in specific pots so you can have an ’emergency fund’ or a ‘fun fund’ (I have one of these!). It means that when I get a last minute invite and I want to attend, I can look into my fun fund and see how much I can afford.

What’s one financial lesson you wish you learnt as a young person?

To invest! With the current news coverage around cryptocurrencies, everyone wants to know about investing and what this means. However, there are many layers to investing. When you start working, you’ll often be part of a pension scheme which in itself is an investment account, not a savings account. Investment doesn’t always mean actively tracking charts everyday; you can invest in a stock and shares ISA for example where the bank will invest the money in your account on your behalf. If you’ve started work, speak to your employer about whether you can be included in their workplace pension scheme or open up your own investment account!

I read the compound effect a few years ago and it honestly changed my life as I began to understand how small investments can compound over time. Especially as a young person, if you start putting £20 into an investment account every month, this figure will grow and compound over time.

Favourite app for managing your finances:

Monzo

Fav book or podcast for financial literacy:

The Compound Effect – a great book

Feel the fear and do it anyway – another really good read

Black Millennial Money – really good podcast

Do you have any final words for the young person reading?

If you’re thinking about anything: get started now. Whether that’s I want to save for X, get started now. I want to learn to invest, get started now.

Complacency is the enemy of doing things so just start now, You’re so young that you can take a lot of risks and make mistakes. Don’t be afraid of doing so.

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