Money matters, and never more than when you're starting out in life. But that's often also the exact point at which it can feel the most overwhelming.
"Oh my God!" says Sophie Richmond, now a 24-year-old teacher in south west London, "that first time you get your student loan in your account! You've never had such a big lump of money in your life and the temptation is just to spend it. And then there are all these credit card people offering you free stuff, and trying to get you to sign up, and what you never realise at the time is that the things you do at this stage of life really do affect what happens later. A friend of mine is sure he lost a job in the Civil Service because although he got through all the exams for the job, he failed on his personal background check, and the only bad thing he's done in his whole life is that he ran up a lot of student debts while he was at university."
However, get on top of the basics now, you'll never need to worry about things going pear-shaped later.
The experts always say that making and sticking to a budget is by far the best way to keep on top of what's happening to your money, so try to acquire the habit early. Write down what money you have coming in for the year, month or week – whatever works best for you – then write down all your essential outgoings, such as student fees, rent, gas and electricity, council tax, television licence, phone, travel, food and basic clothes.
Add these up, subtract them from your income and what remains is your disposable income. Take this and divide it by the number of days you're budgeting for (week, month, year) and that gives you the pitifully small amount of money that you'll have left to spend on all the fun things of life – drinks, clubs, fashion, sports, holidays and presents.
When you've spent too much on some days, you'll know you'll need to spend a couple of days eating cereal in front of the telly to get on track again. Your reward for such diligence will be the absence of stomach churning financial panic, and the smug glow of satisfaction that comes with feeling that you're in control of your life.
Whatever you're buying, get in the habit of shopping around, reading the small print, comparing prices, and thinking through the long-term consequences. For example, with phone contracts consider how much you will use your phone for texting, calls and internet, and what contract suits your usage. Pay as you go? Sim-only? Pay-monthly? Every deal has pros and cons, and it's up to you to decide which works for you.
If in doubt, check a good source of impartial advice, such as Which. Apply these principles to everything. Whether joining a gym or choosing mascara, ask yourself: do I need it, or just want it? What do I need or want it for? Will it be good value for money? Can I actually afford it?
If banks are not your friends, then landlords can definitely sometimes be your enemy. Whenever you rent a property, be smart and organised to protect your deposit and avoid eviction. And if the worst should happen, remember: there are always people you can turn to.
For students, it will be the accommodation office at your university. For others it might be a charity like Shelter or the Citizens Advice Bureau. Be aware that although agencies can charge fees for finding you a property, you should challenge any that you consider unreasonable.
Also, landlords must, by law, protect your deposit and tell you how they are doing so. They can't just run off and put it on the horses. Make sure there is an inventory, and take dated digital photos when you move in to show that the wardrobe door was hanging off before you arrived, so that deductions cannot be made from your deposit because of this damage.
Equally, do your best to keep things in good condition. That impromptu party may seem like a great idea at the time, but could cost you a lot more than just a thumping hangover next morning.
Remember you must pay for your television licence, and that, although full-time students are exempt from council tax, part-time ones aren't. Always absolutely make sure your name has been taken off any joint utilities' accounts when you move out, otherwise nasty bills could come your way later.
Whether you are heading to university or going into a job, one of the first things you'll need to organise is a bank account. Make sure that you look around for the best deal, but remember one thing:however many free gifts they are offering, however much they smile and beckon you in, banks are not on your side. They are on their own side.
So weigh up your options carefully. If they seem to be offering a free overdraft facility, check how much will be available to you, and how and when you will need to start paying back. A tiered interest-free overdraft facility is a good student option, as this limits what you can borrow in your first year – when the word "budgeting" might as well be in a foreign language – but rises later.
Student or not, everyone needs to check what interest will be charged on further authorized borrowing and, even more importantly, on unauthorized borrowing. Otherwise you could find yourself paying huge amounts of money to your bank just for failing to keep your borrowing below the agreed limit.
Credit and debt
The basic truth about credit cards is that they are great servants but terrible masters. On the one hand they can be useful for building up a good credit history – if you can show that you've handled small amounts of borrowing sensibly, you will find it much easier to secure a major loan for a car, or a mortgage, later.
Credit cards can also secure your rights on purchases better than bank credit cards. On the other hand, they can all too quickly spin out of control, and take you down with them. If you decide you need a credit card, make sure you understand borrowing rates, find the best possible deal, get your head around all the charges, stick to just one card, use it cautiously, clear your account each month and never use it to withdraw cash if you can help it.