“Tonight let’s get some – and live while we’re young!” goes the song, and for many of us, that’s what we do when we’re youthful and beautiful, and spend what money we have (and often don’t have) like there’s no tomorrow.
Whether it’s student loans and overdrafts, or just milking the Bank Of Mum and Dad for free rent and more, it can be a while before many of us reach financial maturity.
Understanding your finances is one of the clearest signs that you’ve reached adulthood. Here are six signs that you might be able to say ‘I’m a financial adult now’.
You’ve learned the value of budgeting
Simple steps like understanding how much you have coming in each month against how much you need to spend on essentials – such as groceries, bills and transport – can help you realise what you have left over for yourself. But never forget to pay your credit bills on time – as missed or late payments stay on your credit report for at least six years, and could affect your chances of getting credit in the future.
You’ve got a mortgage
The responsibility of being a homeowner, without having the safety net of a landlord or parent to fix things, can make you grow up quickly. Keeping up regular payments on time and in full, without the opportunity to bail out at a month’s notice, is a sure sign of maturity.
You’re on the electoral register
In the UK credit reference agencies like Experian include electoral roll information on credit reports to help banks and lenders check your name and address when you apply for credit. So being able to vote won’t only give you a political voice – it could potentially help you boost your credit rating.
You understand the difference between want and need
Being able to rein yourself in when you really, really want to splash out on something you don’t need and can’t really afford is something we all have to get used to eventually. Likewise, having to spend money on something we need but don’t really want. And it’s always nice when you’ve got enough left over for something you need AND want, like a new car or a family holiday.
You check your credit report
Your credit report is essentially an overview of your borrowing behaviour – a personal history of the credit you’ve had and the repayments you’ve made, so it needs to be accurate and up-to-date. Lenders are looking for proof that you’re a reliable and responsible borrower – they want to know that you will make repayments on time and that you aren’t already over-stretched. You can see your Experian credit report with a 30-day trial of CreditExpert .
Use some credit on a regular basis, but never take on more than you can afford. Stay within the agreed credit limits, always make your repayments on time, and try to pay more than the minimum off your credit cards each month if you can. And don’t be afraid to speak to your lenders if you need help.
You save money and/or pay into a pension.
Saving for something big, such as a house or wedding, can often help you focus on managing your finances better. And unlike what popstars sing, the chances are you won’t die before you get old, so the earlier you start preparing for retirement, the better.