We've all been there, you come out of school ready to take on the world and all of a sudden there's all these adult things you don't know about because you were never taught them! So, we put it to you:
1. Mortgages
We all know that the mitochondria is the powerhouse of the cell which is super useful knowledge, don't get us wrong; but we wish we'd learnt about mortgages a little bit sooner.
To put it simply, a mortgage is a kind of loan used to buy a house. You can take this out from a bank or a building society. You put a deposit down on the house and then the bank will pay the rest in the form of a loan. If you can't pay back a mortgage the bank will sell the house and will recover the balance of the loan by taking the amount you owe from the house sale and then giving you the rest; this is called 'foreclosure'.
There are lots of different types of mortgages you can get, in fact, we've already got you covered, here's a handy little blog on How to get a mortgage 🏡
2. Taxes
Taxes, everyone has to pay them. But what actually are they? Tax is an amount of money that you have to pay to the government so that it can pay for public services like schools, the Police and hospitals. There's a bunch of different types of tax and how much you pay depends on the government in power at the time. Here are a few for now 👇
Income Tax - It's the tax you pay on your income (pretty self explanatory). How much you earn depends on how much you pay:
Income up to £12,500 - 0% income tax. This is your personal tax-free allowance.
Income between £12,501 and £50,000 - 20% income tax.
Income between £50,001 and £150,000 - 40% income tax.
Income above £150,001 - 45% income tax.
Council Tax - You'll most likely pay this if you're over 18 and own or rent a home. This tax is different depending on each council. It's used to pay for local services such as rubbish collection, street lighting and roads. There's quite a few exemptions from Council Tax for example, if you're in full time education, a diplomat or a live in carer. If you think you might be exempt or want to learn more about other types of tax be sure to check out the government website 🏛
3. Loans
A loan is a sum of money you borrow from the bank and then pay back with interest over a set period of time. "Ah! What's interest!?" we hear you scream! Effectively, it's the cost of borrowing someone else's money and is calculated as a percentage of the loan.
When you pay back a loan, you'll pay interest on top. Loans are calculated in an Annual Percentage Rate (APR). This takes into account the interest you pay but also other costs such as hidden or late fees. Don't worry, Monzo doesn't charge any extra fees! You can read more about our loans here 💸
4. Budgeting
One step ahead of you, Andrew! Check out our previous blog 🤓
5. Credit Scores
A credit score is an abstract measure of how lenders rate you as a borrower. It shows lenders like banks and Credit Reference Agencies your borrowing health - basically how likely you are to pay back a loan. High scores will usually mean you get a better deal.
Don't worry though, there's not really such a thing as a 'good' credit score, just better and worse. All the credit reference agencies have different views on what constitutes a 'good' credit score. Want to learn more? We've got a whole series on this here 📈
6. Investing
Some people like to invest to make their money go further. A lot of others find it far too confusing and scary so steer clear of it. You can invest in heaps of things, for example in stocks, property, or shares in a fund. The aim is to buy these financial products and then sell them at a higher price than what you paid for them.
One thing to consider with investing is what you're actually saving for. If it's a short term goal, investing may not be the right thing for you. Investing can be great, as the stock market goes up, so will the value of your money. Having said that, if the stock market goes down so does... you guessed it... the value of your money! Unsure about whether investing is right for you? You can always contact a financial advisor and they'll help you out 👍
7. Pensions
A pension is a sum of money which is saved up during your working life to support your retirement. When you're young, your retirement and how you'll need to pay for it might be the last thing on your mind. It can make a big difference if you start saving early. Sometimes, your employer will put a percentage of your salary into your pension every month.
If you don't get your pension paid by your company it might be worth thinking about setting aside an amount every month for some long term savings planning. There's lots of different pension companies out there if you're looking for some advice or help with what's the best option for you 👵
8. Debt
Debt is, simply put, when you owe someone money. It's a scary thought but many of us will be in it at some point in our lives! It's important to remember, not all debt is bad such as student loans of mortgages. As we've seen with 2020, life can be unexpected. If you do find yourself in a tricky situation there are lots of organisations that can help 🤗
Stepchange are a charity that provide free, independent and confidential debt advice. They have an online tool you can use to get advice based off of the information you give them. You can also contact the Money Advice Service for free, independent advice.
9. How to have self-control
We're not 100% on this one if we're honest, we always vote to treat yourself!
10. How to make money without working
If you work it out, let us know! 😁