Achieving Financial Independence

I remember the excitement of completing sixth form and in my mind becoming financially Independent at age 18.

I worked part time from 16 at my local supermarket and started my first role as a trainee manager at a paint factory in Birmingham. Then, I postponed my University offer due to a lack of funding and therefore needed to find employment to top up my fees and costs.

On my first day of full-time employment, I woke up at 5.30am to catch 6.15am train from Lichfield to Birmingham.

I spent my day shadowing managers and learning about paint and factory techniques. After a full 8-hour day I made the commute back home arriving back home at 7pm. A quick bit of food and chat with my little brother and then bed by 10pm.

Talk about a reality check, still it was all worth the money though?

I had to pay income tax, National Insurance and of course travel and lunch costs. If I was lucky, I was able to have £120 left from all the costs. Suddenly reality started to hit, what about paying my mobile phone costs? The gym? seeing my friends at the weekend? Clothes? How could I stretch my money far enough to enjoy life and earn well?

I also thought about leaving home and returning to where I grew up but I realised I would need a plan.

I will be honest, initially I was at a loss with it all (a bit like this emoji)

I went through school and sixth form with no knowledge of the wider world and a lack of preparation for full time employment. At my school you either went to university or found a job. The curriculum did not support the next stages well enough let alone how to manage money.

Leaving school and gaining employment means you must grow up quickly. Things such as car insurance, petrol and travel costs, mobile phones, rent, food amongst social expenditure become priorities. I moved between jobs over the first 18 months and declined my Uni place. This was partly due to lack of funds but also as I wanted to move out.

I eventually found employment at a Bank and started a career in Financial Services as a cashier. It was in the job I was able to finally budget and understand my costs better. I started on £11,500 per year and had rent to pay of £400pm. Add on top of this living costs. To be independent, I knew I needed to wise up. Shopping smarter and travelling on buses or getting lifts with friends whilst trying to pass my driving test.

I would aim to save at least £50 per month for holidays and social events and push hard to earn more money through promotions and bonuses.

I still managed to socialise where I could and ensured I did not neglect this.

Top Tips for financial independence

  1. Understand income and outgoings, include as much as possible (clothes, coffees Spotify- Often costs for these are taken for granted)
  2. Have a Plan- What are you saving for or looking to achieve?
  3. Do not cut back completely- Enjoy things you want to do but within reason

The challenge I set myself pushed me to excel and within 2 years I had passed my mortgage qualifications and successfully applied to become a trainee financial adviser with Legal and General.

I started at entry level and worked hard to gain confidence and qualifications. This all came from a chance advert in the window of the Bank as I walked to the bus station at the end of my day. The team I worked with and the support I had in my first two years gave me the self-belief and confidence to successfully pass exams and gain promotion to an assistant manager prior to being accepted onto a trainee adviser academy with Legal and General.

Fast forward 15 years from my entry into the industry and things are not so different in terms of understanding the finances students and leave school leavers need to prepare for adult life.

It now more important than ever to understand about deductions to your pay needed to fund income tax and national insurance, as these are contributions to the Government’s spending and provision of services such as the NHS, police, fire services and much more.

Understanding the cost of living and the impacts of investments and savings when the economy is continually changing is crucial.

I believe everyone should be supported in achieving financial independence through education and understanding. After all, knowledge is power.

A blog post by Rob Boland

Rob is an Independent Financial Adviser at Cotswold Financial Service Ltd in the West Midlands.

‘During my career I have had the pleasure of delivering financial awareness sessions to secondary schools and more recently have experienced delivering My personal finance skills workshops. Delivering fun, interactive, and informative sessions help engage students just like you to explore essential topics such as budgeting, understanding wage slips, financial scams and careers in financial services’.

To find out more about taxes, deductions and other things related to your first payslip check out Moving on from school here