What they didn’t teach you at school
As the cost of living rises, financial struggles have become a common reality for many individuals, significantly impacting their overall well-being and mental health.
Your guide to navigating the financial world with confidence and clarity
Here, we break down the essential financial terms and products that are crucial for your Financial wellbeing but often skipped in traditional education. Whether you’re stepping into financial independence for the first time or looking to sharpen your money management skills, we’re here to help you make informed decisions and take control of your financial journey.
Taxation
Taxation is the process of collecting money from individuals and businesses by the government to fund public services like Policing and the NHS. Two common types of taxes we come across are income tax and value-added tax (VAT).
Insurance
Insurance is a way to protect yourself financially against unexpected events. For example, car insurance can cover the costs of repairs if you have an accident, and health insurance can help pay for medical treatments.
Mortgage
A mortgage is a loan from a bank or lender that helps you buy a home. You make regular payments, including interest, to repay the loan over an agreed period (often to retirement). If you fail to make the payments, the lender can take possession of the property.
Pensions
Pensions are retirement savings plans that help you save for the future. You contribute money regularly into a pension fund, and over time, your pot grows through investments. When you reach 55 years old, you can start withdrawing money. systems. This can be difficult to keep track of.
Credit Score
Probably the most important area as young people become financially independent but where so many mistakes are made. A credit score is a numerical representation of an individual’s creditworthiness, It is based on various factors, including payment history, credit utilization, length of credit history, types of credit used, and recent credit activity. Lenders use credit scores to assess the risk of lending money and determine interest rates or credit limits for individuals.
Here is your brief guide to understanding the trick world of finance
A type of digital money that you can use to buy online. It's like virtual cash that you can send to other people without needing a bank.
Digital money that is created and managed using computer technology. Cryptocurrencies are like online tokens that can be used for buying and selling things on the internet.
A professional or firm with industry knowledge helps individuals find the right product in a specific area such and mortgage or insurance. Brokers act as intermediaries earning a commission or fee for their services.
The process of creating a detailed plan that outlines how you will allocate your income to cover expenses, savings, and investments. Budgeting helps you track your spending, identify areas for savings, and achieve your financial goals by managing your money effectively.
Interest that is calculated not only on the initial principal amount but also on the accumulated interest from previous periods. Compound interest allows your savings or investments to grow exponentially over time, as the interest earned is reinvested to generate additional returns.
A payment card issued by a financial institution that allows cardholders to make purchases on credit. Cardholders can borrow funds up to a certain limit and must repay the borrowed amount, along with interest, by a specified due date.
Money that is owed by an individual or entity to a lender or creditor. Debt can be incurred through loans, credit cards, mortgages, or other financial obligations that require repayment with interest over a specified period.
An electronic tool or mobile app that allows users to store payment information, make online transactions, and conduct contactless payments using their smartphones or other digital devices. Digital wallets provide convenience and security for managing financial transactions.
Deceptive practices or schemes aimed at obtaining money, sensitive information, or assets through dishonest or unlawful means. Financial fraud can include identity theft, phishing scams, investment fraud, or credit card fraud, leading to financial losses for victims.
The rate at which the general level of prices for goods and services in an economy increases over time. Inflation erodes the purchasing power of money, reducing the value of savings and income, and impacting the cost of living for consumers.
A financial product that provides protection against financial losses or risks by transferring the risk to an insurance company in exchange for premium payments. Common types of insurance in the UK include health insurance, car insurance, home insurance, and life insurance.
The cost of borrowing money or the return earned on savings and investments, expressed as a percentage. Interest rates influence the cost of loans, mortgages, and credit products, as well as the returns on savings accounts, bonds, and other financial instruments.
Allocating funds into assets such as stocks, bonds, mutual funds, property, or other securities with the expectation of generating returns or appreciation over time. Investments help individuals grow their wealth, build financial security, and achieve long-term financial goals.
A sum of money borrowed from a lender, typically with an agreement to repay the principal amount plus interest over a specified period. Loans can be used for various purposes, including purchasing a home, financing education, or covering unexpected expenses.
Setting aside a portion of income for future needs or emergencies, such as building an emergency fund, saving for a major purchase, or planning for retirement. Savings help individuals achieve financial security, cover unexpected expenses, and work towards their financial goals.
The lowest hourly rate of pay that employers are legally required to pay employees for their work. The minimum wage in the UK is set by the government and varies depending on the individual's age, with different rates for adults, young workers, and apprentices.
Useful Information
Action Fraud
This is the UK’s national reporting centre for fraud and cybercrime where you should report fraud if you have been scammed, defrauded or experienced cyber crime.
https://www.actionfraud.police.uk/
Financial Conduct Authority (FCA)
The FCA is a financial regulatory body in the UK, but operates independently of the UK government, and is financed by charging fees to members of the financial services industry. They provide information on how to report scams and unauthorised firms.
https://www.fca.org.uk/
National Fraud Intelligence Bureau (NFIB)
The NFIB is a police unit in the UK responsible for gathering and analysing intelligence relating to fraud and financially motivated cyber crime. They work alongside Action Fraud.
https://www.cityoflondon.police.uk/
Citizens Advice
Citizens Advice give free advice on a range of issues
https://www.citizensadvice.org.uk/
National Cyber Security Centre (NCSC)
They provide advice and support for the public and private sector in how to avoid computer security threats. You can report phishing emails to them.
https://www.ncsc.gov.uk/
Broker
A specialist tasked to finding you the right deal in a certain industry. They know the in’s and outs of products and often advise as to their suitability and may have access to discounted rates.
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