Young people are savvier with money than you'd think

The first taste of financial independence can be a daunting one.

There are bills to juggle, debts to consider and perhaps expensive rent too - let alone the thought of trying to get on the property ladder as house prices continue to push upwards.

But, promisingly, new research suggests that today’s “Millennial” generation of 18 to 34-year-olds are actually managing their money rather well - better than their parents in fact.

Nearly half (49 per cent) of Millennials see themselves as “savers”, while only one in four (25 per cent) would describe themselves as “spenders” - according to a report from credit checking company, Experian.

Some 45 per cent of Millennials manage to put at least one quarter of their disposable income into savings each month.

This is a higher proportion than that of people in the generation above them, aka “Generation X” (35 to 55-year-olds).

Just 34 per cent of Generation Xers say they save at least a quarter of their disposable income each month, according to the research among 4,000 people.

For many young people, while their parents may not be as good as them at saving, nearly two-thirds (63 per cent) say their parents have had a positive influence on their money management habits.

If you’re experiencing your first taste of financial freedom, here are some tips from Experian:

• Don’t forget to budget. It’s a balancing act - ensuring you have more money coming in than going out will help you stay on top of your finances and help you avoid either running out of money, or going into your overdraft at the end of the month.

• Think before you borrow. Companies can be keen to build relationships with new customers, especially students and young people, so may use special offers to attract your attention. While these can be useful, try to focus on getting what you need at the lowest cost. With a bank account, for example, an interest-free overdraft may be more valuable than online vouchers.

• Signing on the dotted line. Once you sign a credit agreement (like a mobile phone contract or a bank account), you are making a commitment to repay the money. Because of this, if you don’t repay money you owe according to the terms of the agreement, it could affect how a lender will view you in the future.

• Your name, your responsibility. Remember, if it’s just your name on a credit agreement, you will be liable for the debt and your credit rating could be affected. Keep this is mind if you are splitting the cost with others in a shared house for example, in case you fall behind with a payment.

• Don’t miss out. When you start to manage credit, it’s really important you pay back everything you’ve agreed to pay each month. Missed payments stay on your credit report for six years and can affect how a lender views you when you apply for credit in the future. It’s often a good idea to set up direct debits to pay regular bills to limit the chance of missed payments.

• Room for improvement: If your credit report has areas for improvement, make a plan to get it into shape well before making an application for credit. There are a number of steps you can take, including ensuring you’re registered on the Electoral Roll, paying down outstanding balances to less than 50 per cent of your limit, paying off more than the minimum repayments on your accounts each month and making sure never to miss a repayment. Improving your credit rating will put you in a strong position to get the best deals you can afford.

Scottish heritage: for stories on Scotland’s people, places and history >>