TikTok star Poku Banks reveals eight money hacks everyone should know – including the 1p savings challenge

Footballer Marcus Rashford thinks kids should learn about personal finance in school – and he’s right.

We need to give youngsters the skills to manage their own money and teach them life basics when it comes to spending.

Poku's top ten tips on what kids should know about money by the age of 18

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Poku’s top ten tips on what kids should know about money by the age of 18Credit: pokubanks/instagram
The personal finance expert, who goes by the name of @Pokubanks, sees young people in particular as interested in how to make the most of their money

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The personal finance expert, who goes by the name of @Pokubanks, sees young people in particular as interested in how to make the most of their moneyPhoto credit: tiktok/@pokubanks

Role Model Marcus launched a NatWest project this week to help youngsters be more confident with cash.

As a personal finance expert under the @Pokubanks name, I have more than 330,000 TikTok followers, mostly young people interested in how to make the most of their money.

Here are my top ten tips for what kids should know about money by the age of 18. Show it to your teenagers – but you might find it useful too.

  • Watch an exclusive video from Poku Banks on how to manage your money at thesun.co.uk.
Show these tips to your teens — but you might find them useful, too

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Show these tips to your teens — but you might find them useful, tooPhoto credit: tiktok/@pokubanks

How to budget

If you want to avoid debt, you have to budget.

Many people are afraid to even look at their bank account and check their spending, so taking this first step will put you ahead of many people.

The best way to do this is to look at income and expenses. Do the math of what you have left and then figure out what you’re going to do with your excess cash.

Understand the difference between needs and wants. You have to pay your heating bills – but you might want new sneakers.

Make sure you set aside something to save, then stick to your plan by tracking your spending.

There are some good budgeting apps like Money Dashboard Neon that categorize your expenses and show you your total balance on all your accounts by bills. Sign up and take control.

How to read a pay slip

It's important to make sure you get what you deserve

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It’s important to make sure you get what you deservePhoto credit: Getty

Some adults who have worked for decades don’t even bother to read their payslips.

But it’s important to make sure you get what you owe and that you’re being charged the correct amount of tax.

Your receipt contains payments from your employer, a tax number from HMRC and your social security number. The latter remains the same throughout life.

It should also show deductions from what is known as your (full) gross salary, including all taxes, NI, pensions and student loans.

This leaves you with your net salary – the amount you take home with you. Your payslip should also detail how much gross salary you earned for each fiscal year running from April to April.

How to deal with debt

DEBT is a double-edged sword – there is good debt and bad debt.

Good debt includes business loans, student loans, and mortgages.

This is because you expect a positive return on the money you borrowed.

Bad debts are auto loans, vacation, clothing and payday loans. This is bad because either the asset will go down in value (your car) or you’ll be paying more for something you can easily save for (holidays or clothes).

Interest rates on payday loans are unreasonably expensive.

Pay off debt with the highest interest rate first. This is the best investment you can make as you will reduce the interest you will have to pay in the future.

Be honest with yourself about what you can afford. To calculate your debt-to-income ratio, this is your monthly debt payment divided by your monthly gross income.

Try these saving methods

THE 1p savings challenge: You save 1p on day 1, 2p on day 2, 3p on day 3 and so on. By the end of the year you could save £667.95 if you get it right.

Don’t spend weekends: Decide to stay at home and not spend money on certain weekends of the month. You’ll see how much you can save by not going out.

Overpay your mortgage: Higher monthly repayments can lower interest rates in the future—saving you money in the long run.

Understanding Credit Scores: A credit score basically tells lenders how well you are managing debt. If you owe £20,000 on credit cards but only make £25,000 or didn’t pay your mobile bill on time, lenders will know and charge you higher interest or refuse you outright.

Check your score with sites like Experian. If your score is low, make sorting them a priority or you could get into trouble if you need to borrow something big like a car or house.

Learn how to save

Marcus Rashford this week launched a NatWest project to help youngsters be more confident with cash

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Marcus Rashford this week launched a NatWest project to help youngsters be more confident with cashPhoto credit: Getty

Saving is another word for late spending.

Understand what you’re saving for. Are you saving to spend or to invest?

Saving is saving for a new car or a vacation.

Saving to invest is saving for a house deposit or equipment to start a business.

The latter increases your income, allowing you to save even more.

Know if you want or need something, and don’t let your friends pressure you into spending what they don’t need on the latest gadgets, clothes, or outings.

Learn more about Social Security and the State Pension

YOU need to understand the connection between paying Social Security and receiving your state pension later in life.

To receive the pension, you must have paid Social Security for at least ten years.

To qualify for a year you must be earning over £242 per week from an employer. If you are self-employed, you must pay NI contributions.

If you’re not working because of illness, disability, or because you’re a caregiver, you can get Social Security credits instead. Parents claiming child support for a child under the age of 12 may also receive credits.

If you do not belong to either of these groups, you may be able to make voluntary NI contributions. Log on to the government website gov.uk to find out more.

This is how income tax works

Be careful not to make

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Be careful not to make “false mistakes” like Tory Minister Nadhim ZahawiCredit: Alamy

Sounds like a complicated subject, doesn’t it?

But it’s basically the amount you pay the government for the money you make.

Anything you earn up to £12,570 is tax free. After that, you’ll have to pay 20% of your wages in tax if you earn between that amount and £50,270.

This increases to 40 per cent if you earn between £50,271 and £150,000 more. And anything you earn over £150,000 is taxed at 45 per cent.

(By the way, be careful not to make “false mistakes” like Tory Minister Nadhim Zahawi.)

How to get a mortgage

For a mortgage, YOU need a down payment of 5 to 10 percent of the purchase price of your home—a hefty chunk of money.

It pays to seek advice from a mortgage broker as they have access to all interest rates and understand the latest trends in the industry.

Find your perfect property and then speak to your lender (agent recommended).

In terms of paperwork, you’ll need utility bills, proof of benefits, a P60 form from your employer, your payslips for the last three months, a passport or driver’s license to prove your identity, bank statements, and accounts for two or three years if self-employed.

If you have more than one job, you will also need an SA302 tax return form.

How to start a business

NOT everyone wants a nine-to-five job – some may want to be self-employed or create value. That’s how it’s done:

  1. You need a business idea, but don’t worry — you don’t have to make the next Facebook or Uber. If you can combine a traditional business model with a new niche, the money will flow.
  2. Research your idea. You can learn a lot about your industry through books, podcasts, consulting and your network.
  3. Create a business plan with a summary, business model, products or services you offer, the target customer, your marketing, competitors, finances and forecasts.
  4. Register the business at Companies House on GOV.UK – it costs £12.
  5. Set up finance and accounting. Open a commercial bank account, ask an accountant to help you file your taxes and accounts, and get accounting software to help you with your bookkeeping.

The different types of investments you can make

An investment in yourself is as little as a gym membership

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An investment in yourself is as little as a gym membershipPhoto credit: Getty

Many people are afraid of the word investment, so they shy away. But as little as a gym membership is an investment in yourself!

You can invest in 3 things; itself, a company or a financial asset.

Self: Classes, books, gym membership and therapy

Business: side hustle, LTD company, high income skills

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Finance: stocks, real estate, crypto.

I would always start by investing in yourself first. Everything that happens in your life revolves around you. So when you improve, everything that comes from you, like your business or your investment decisions, automatically improves.

https://www.thesun.ie/money/10123260/im-a-finance-expert-eight-money-hacks/ TikTok star Poku Banks reveals eight money hacks everyone should know – including the 1p savings challenge

Fry Electronics Team

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