How to Be Less Terrible with Your Money

If I had a pound for every article about millennial spending habits written in the last two years, I'd finally be able to put some money in the dormant ISA account I opened eight years ago. Unfortunately, I don't – and to make matters worse, I haven't learned much from any of those articles. Professional commentators are happy to tell us that we're doing money all wrong, but they rarely offer any genuine practical advice. Headlines like, "Millennials aren’t as smart about money as they think" are just clickbait for smug parents.

Journalist Laura Whateley is different – perhaps because she's only 33 – in that her finance writing is actually helpful. Her new book, Money A User’s Guide, is stuffed full of no bullshit advice for those with or without a healthy bank account. With the future up for grabs, and money and just general life seemingly more and more precarious, we caught up with Laura to ask her some quick-fire questions about how we can be a bit better with whatever amount of cash we have.

I'd start by allowing yourself to feel bad about money. It's such an emotive yet oddly taboo topic, so don't write yourself off as "crap" with money forever. Being crap with money is not an ingrained personality trait; you can address it with a bit of will and perseverance. Start by looking at your bank balance – it's not going to get any healthier by ignoring it; trust me, I've tried.

The only way I have any money left is if I pay myself first. The minute any money lands in my account, I move it out of my current account into another that I reserve for bills, another for my tax and so on. Sit down and figure out how much you need to live on, and how much you want to save, and then set up a system so you don't have to think about it too much.

If you've been a student since 2012, when the tuition fees really began to shaft you, I’d actually advise that not thinking about it too much is a sensible course of action. Try to consider student debt as more like a tax: you repay it only if you earn enough to do so, unlike other kinds of debt, where banks don’t give a fuck how much you earn – you owe them regardless. Under the existing system, those who took out loans since 2012 only start repaying them when they earn at least £25,000, and at this point you repay 9 percent of the difference between £25,000 and your salary. So, for example, £450 a year if you earn £30,000. Your loan is wiped out after 30 years. That means the vast majority – one estimate reckons 83 percent – will not repay the loan in full.

We find it psychologically much harder to part with cash; we are more likely to pause to reflect on whether we really want an expensive thing when we can see all the notes piled up than when we mindlessly hand over a credit card. Who knows how much TfL is munching through your account when you just tap your phone until you actually look at your bank statement?

I'm not on commission, promise, but so far I love Monzo. I switched my full current account over this summer so I could monitor exactly where my cash is going. You can set up "pots" to save, and the coin jar feature lets you round up every transaction and save the difference automatically (i.e. you are charged £3, with 50p saved for every £2.50 coffee you buy). App-only banks (Starling is just as good) are less secure, but they are regulated by the FCA the same as the high street banks.

I’m sure it totally will, but still, do think about it. When you sign up for any joint financial product your credit histories are linked. No matter how much you love your other half, if they have a catalogue debt problem, you too will be judged harshly by anyone you want to borrow money from. Also, be aware that any overdraft they run up on a joint account will be your debt now.

I think, to an extent, it's unavoidable: money represents power, and a power imbalance can create a toxic dynamic in any relationship. Talking about it early, however cringe, definitely helps, as does abandoning our often-gendered assumptions about what is the "right" way to spend and save.

I think setting up an agreement whereby you commit to how much you'll both spend on joint things – and that you can't judge each other for what you do with your own, separately-earned cash – is a start.

Given the life expectancy of a 25-year-old woman is now about 91, you might have to be working into your nineties! At its most simple, a "private pension" ­– what you save yourself on top of what you get from the state – is a tax break. The government gives us free money to top up our own savings, in return for us agreeing to lock those savings away until we are at least 55. For every £1 you save in a pension as a basic rate taxpayer, it only actually costs you 80p; 20p is from the government in tax relief. For higher rate taxpayers. it costs you 60p; you currently get 40 percent tax relief.

Simple: if you don’t save into a pension you are losing this free money.

Money: A User's Guide (4th Estate) is out now in all good bookshops.

@KitCaless