One of the most important relationships we’ll have in our life is with money. While filial, romantic and friendly relationships are essential, how we perceive money and manage it for our current and future needs can shape our lives dramatically.
The older generation has learned about money through experience and at colleges or workplaces. However, things are very different for young adults.
Gen Z and Alphas are a generation raised by TikTok and Instagram financial “influencers” sharing their tips for whatever it’s worth. While some of the advice can be great, most of it is often not feasible.
When you’re clear about financial concepts, it could be the difference between retiring early with substantial savings or struggling to pay for basics by the end of the month.
In today’s blog, we’ll be busting some financial myths for the youth so they have a head start on their journey to financial freedom.
1. You Must Only Save Big
When you find influencers and creators talking about saving hundreds of pounds every month, it can feel disheartening when you see only a few quids in your wallet. Here’s where they’re wrong. Every penny counts when it comes to savings.
Developing a savings mindset early on in your life will be handy in your journey towards financial stability. Start as small as saving a few pounds every month from your pocket money. If you are in high school or just starting college, save whatever you can by way of allowances or through side jobs like dog walking, babysitting or interning.
Saving £10 every month from the time you turn 18 till your retirement at a 6% average annual return can lead to a significant pension sum. The point here is – look at the bigger picture.
2. Credit Cards Must Be Avoided
Credit cards have received a bad rep over the years. However, it can be good for your financial health, especially when you use it properly. Credit cards come with a lot of perks such as rewards, cashback and even points, which can be encashed as flight tickets and much more.
When you start your credit journey early in life, you can build a good credit score before you reach your 30s. There’s a catch, though, to achieve this.
The one thumb rule to follow with credit cards is to spend only the amount you can pay back in one go. For instance, your credit card limit is £1500, and it might be tempting to spend as much. However, it’s important to remember that you’ll need to pay it back, along with interest.
So, stick to spending £200 as you could manage paying only that much back within a month. This will help you avoid exorbitant charges (interest and fines) while boosting your credit score.
That said, if you ever need a small loan to cover unexpected or emergency expenses, choosing a responsible lender is key. A salad loan offers a transparent alternative, helping you avoid the pitfalls of high-interest borrowing. All of this without you having to worry about your credit score.
3. You Need To Be Super Rich To Invest
Most young adults feel that investment is only for people with millions of pounds to their name or for people in their late thirties. This a myth that needs some busting.
You can start investing with a very small amount. Invest in stocks and shares, ISA or Self-Invested Personal Pension (SIPP). Make sure you consult someone about investments before making one yourself.
Many online platforms make it easy to invest as a beginner, but you should only choose genuine FCA-certified platforms. Without the correct certifications, investing can lead to losses. There are too many fraudulent platforms out there that could dupe young adults, so beware. Understand that there’s no such thing as “quick money”, and anybody who promises you that is not trustworthy.
It’s never a bad idea to ask your parents for help.
4. Retirement Plans Are Only Meant For Our Parents
No, this is the biggest financial myth that needs to be busted for young adults. The faster you start saving for your retirement, the better. The middle years go in hustling and building a career and family, and you don’t find the time or money to spend on yourself.
Moreover, the cost of living and inflation is growing rapidly. This means money is losing its value. Things you can afford for £100 in 2025 will not be possible in the next two decades or more.
So, the faster you start saving for retirement, the more money you’ll have. This gives you the choice to retire early and live a life you’ve aspired for, whether it involves travelling the world or spending your days playing golf.
Starting early helps increase your money through the power of compounding.
In Summary
Financial myths often dissuade young people from achieving their true economic potential. Inculcating good financial habits from an early age can help you navigate the current conditions.
It’s okay to start small when it comes to saving, even saving a pence every day (1p on day one, 2p on day two and so on) for one year leads to saving approximately £660 annually and isn’t that interesting?
Asking for help and learning about financial concepts from professionals and authoritative websites rather than TikTok and social media can also lead you to learn factual information that you can put to use.
No matter your age, money matters need to be dealt with maturely and responsibly, and the time to start is NOW!
The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.
