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A research study by behaviour experts at Cambridge University revealed financial habits are formed by age seven. Hence, it is never too young to learn about personal finance. The earlier you start to learn about money, the fewer mistakes you make later in life.

There are 100s of money lessons to learn but the most important 20 money lessons you must learn before you get to university are as follows.

  1. Delayed Gratification

First and foremost, an important money lesson is to practice delayed gratification. Delayed gratification means resisting yourself from choosing an immediate reward or fun, in order to gain a better reward, fun or pleasure later.

A simple example would be to resist buying coffees daily in the coffee shop to save that money to buy a brilliant coffee machine.

Delaying gratification provides enormous benefits and purpose in life. This can be practised and applied in every situation in the hope to get better rewards for long term success.

  1. 2. Open a Savings Account

If your parents have not opened a child savings account for you, then you can open a savings bank account on your own when you turn 16.

When you were a kid, you might have used a piggy bank to store and save money. Similar to saving money in a piggy bank, you can now deposit the money in the bank account to earn a small income as interest on that money.

The money that you may earn can be deposited into your bank account. This also helps you to learn how the bank account and withdraw the money from the bank works.

  1. 3. Know What Your Time is Worth

In the UK, the minimum national wage per hour for under 18 is £4.62 and between age 18 and 20 is £6.56. If you are between 18 and 20, your one hour is worth £6.56.

This means your one day (8 hours, standard working hours of a day in the UK) is worth £52.48. In other words, if you don’t use 8 hours of your time in a day effectively, you will lose £52.48.

Do a part-time job on the side to convert your time into money. You should earn not just to put your money in the bank account but to develop a sense of responsibility.

A research study by Dr. Gary R. Pike shows that students who work 20 hrs or less a week are more engaged in student life. As a result, it creates a significant positive impact to get better grades.

  1. Savings is Important

Saving your money is a habit and eventually becomes second nature. If you do not save what you earn, then it does really not matter how much you earn.

Because, if you spend all the money, you earn then that means you have to keep spending your time to earn money. You will be in a rat race.

Don’t think that you do not earn enough to save. This is one of the biggest mind blocks even the high earners have.

The earlier you establish the habit of saving even from a less income, the easier it would be to save more and more when you start to receive a real pay-check from a full-time job.

  1. 5. Know Where Your Money Goes

Knowing what you spend on is important to save your money. Track your income and spending, do Budgeting. Budgeting is a plan that shows your income (money that you earn from work, pocket money from parents, etc.,) and expenses (the money you spend) on a piece of paper.

To create a budget, you should first understand what you must have, in other words, your needs and what it would be nice to have, in other words, wants.

For example, you need a pair of shoes to wear which is a basic need. But thinking of having a second pair of shoes with a different design or colour is a want. It would be nice but you can survive without it.

When you create a budget plan, you should clearly identify if you are spending for a need or want. So that you can make the right choice when you spend your income and cut down the

expenses unnecessarily spent for the wants.

This hugely helps to save more and more money.

  1. 6. Find Cheap Deals

If you want to get something that you need tomorrow, just do not go to the shop today and buy it. Especially any items that are expensive. Plan well in advance.

For example, if you want to buy a shoe to wear to the university, you should first start saving for it and secondly, shop around or search online to find a better price.

Compare the price of the shoes at different shops before you purchase. Finding a better deal will help you save money and it gives you the pleasure of buying for less. You can proudly say to friends that you bought it at a bargain.

  1. 7. Don’t Fall for Brand Trap

Branded products are expensive. Always try supermarket basic products which cost less for the same quality or taste.

For example, a pack of Tesco tea biscuits cost £0.30 but Mcvitie Rich Tea Biscuits cost $1.29. I can hardly find the difference in taste between these two. Making the choice to buy Tesco products over Mcvitie instantly saves me £0.99.

  1. 8. Carry Cash for Shopping

Another great way to reduce spending and increase savings is to spend with cash rather than a debit card. It helps you to see that the cash from your wallet is draining and this will motivate you to slow down the spending a little longer.

  1. 9. Savings Equals Investment

Saving money is important but keeping all your saved money in a bank account earns you very little money. The value of the money reduces over time.

For example, you can buy candy for £1 today but if you travel back to 1950, you can buy 20 candies for the same money. In the future, that one candy may even cost £5. The price of everything increases over time. This is called inflation.

This means just keeping your money in the bank will lose its value over time. Hence, it is important to invest the money you save.

There are a number of ways to invest money but the one that provides returns to keep up with inflation is investing in the stock market.

Investment can help you to grow your money. Read more to learn the basics of investing in the stock market.

  1. Create Multiple Sources of Income

Multiple income sources can provide you with freedom and a more secure life. Multiple income sources don’t mean you have to do two jobs at the same but creating a side hustle, a secondary income.

When you finish your university, you may get a full-time, proper pay-check job. However, you should find a way to earn extra income.

This can help you to survive even if you lose your full-time job. You can use your hobby to make money. For example, if you like creating crafts, you can sell online via Facebook, Instagram to

earn extra money.

  1. Beware of Lifestyle Creep

It is not uncommon to change our lifestyle as we earn more. But beware changing our lifestyle leads to spending more money and ending up saving little even if you earn higher than what you earned previously.

One sign of lifestyle creep is that things you thought you wanted become or seem like a need now.

For example, having second pairs of shoes was a want previously, would now seem like a need now with false justification.

  1. 12. Create Financial Goals

Create short-term and long-term financial goals. Short-term long such as savings for deposit to buy a new home and long-term such as saving for retirement.

Creating a financial goal develops a commitment to continue to save more money and help avoid the lifestyle creep.

  1. Emergency Funds

Emergency Funds means saving for rainy days or bad luck. You have set aside some funds from your income for emergency needs. This should be a list in your budgeting.

These funds can help you in bad times or unexpected bills pop up. For example, if a bike or car is repaired suddenly, you can use an emergency fund to pay for the repair.

  1. Sharing is Caring

Giving back to society is everyone’s responsibility. Caring for others is a moral money lesson to learn.

You can set aside some money in your budget for charity.

When you are teen, you may not have lots of money to give to charity but remember time is money. So, you can give to society not just by providing money to charity but by providing your time. Do volunteering to help the community.

  1. Know About Credit

Credit nothing but borrowing. You borrow money from the bank as a loan or simply use a credit card which is pre-approved money to use. In both cases, you pay interest when repaying the borrowed.

The difference in credit cards is you only pay interest if you do not repay within a specified time, usually within 56 days.

For example, if you spend £100 from a credit card from 1st Jan, then the credit card provider will send you a bill by 1st Feb asking you to repay the full amount by 26th Feb without incurring any interest.

If you miss paying the full amount, then you will be charged a higher interest on the balance you need to pay.

This interest is usually higher compared to bank loans. You were thought to spend only what you earn without borrowing which is true in parts.

Borrowing money is not always bad but depends on what it is used for. If you borrow to buy a house, it is an investment. This is called a mortgage.

In other words, this is a good credit as this house will become your asset. However, borrowing to buy a car, clothes or consumables are bad credits as those things lose their value over time.

  1. Why and How You Should Use a Credit Card

It is not always bad to use a credit card. In fact, using a credit card does provide some financial benefits. Because using a credit card improves your credit score. A credit score is a 3-digit number, it shows how likely you will be accepted for a credit application. A credit score is like your grades. Better grades in school can help land you in a good university. Credit scores can help borrow money for good credit at a low-interest rate. For example, a good credit score is essential to borrow money from a bank for buying a house.

  1. Make Wise Money Choice by Choosing the Right College

When you choose your college, do not think university ranking is the most important criterion. Because the university with the highest-ranking does not necessarily provide quality education. So, it is important to choose a college that provides a great experience but at the same, it should not leave you with a high amount of student loan. It doesn’t really matter where you study but what you learn and experiences you get to support you after graduation.

  1. Look After Yourself

While you are doing your college, you might be away from your home and you have all the freedom to do whatever you want to do. But it is important that you look after your health both physical and mental health. Because the biggest asset one has is your health, hence, the proverb health is wealth.

19. Start Saving for Retirement

As soon as you start earning, start saving some percentage of your income for retirement. Do not think that you are not close to retirement and avoid saving for it, this is the biggest thing most do at the start of their career. The earlier you start saving for retirement, the larger the

chance to retire early.

20. It’s ok to Talk about Money

Be open to talk about money such as income, retirement and savings with friends. It can make them even better informed about financial topics. Discussing money can also help you to learn from other mistakes. This helps to avoid any detrimental financial mistakes while making decisions about financial matters.



In this article, author Naresh Jayakumar writes about 20 money lessons to learn before you get to the university.

About the author: Naresh Jayakumar is an author of the blog https://njurlife.com/, writes about personal finance and investing. He works in an IT company and has a passion to embrace his love for writing.


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