Mr. Micawber, in Charles Dickens' David Copperfield, summed it up by saying “Annual income twenty pounds, annual expenditure nineteen pounds nineteen and  six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”.

I pinched that quote from – just one of many decent sites that talk about personal finance.  Start by doing a budget – what do you earn and what do you spend it on.  If you spend more than you earn, it can’t last and there will be a very unpleasant day of reckoning.  There are two (obvious) solutions – earn more or spend less.  People often react “I can’t spend less”.  But you can.  You are confusing wants and needs.  You might want cigarettes, booze, eating out, clothes but you don’t need them.  Live in a smaller place, get rid of the car – tough decisions maybe but not impossible.  Just get a grip.  If you need to tackle the income side you can consider longer hours or a second job, or maybe you need help with benefits from the Citizens Advice Bureau.

Housing is a large part of any spending budget.  Rent or buy?  You might not have the choice – if you can’t get a mortgage you will have to rent.  And the UK is a little odd in having so many people buying their own houses – in many countries ownership is unusual and most people rent.  Ownership used to be regarded as a good investment (“as safe as houses”) – for about 40 years after the Second World War house prices only went upwards.  But since 1988 there has been more volatility and some can find themselves in “negative equity” where the house value has dropped since they bought it to the extent that if they sold there would not be enough to repay the mortgage.  So, if you fancy owning, make sure you can afford the repayments and you don’t intend to move too soon.

Pensions are confusing and horribly expensive.  Everyone who has worked gets a state pension – the amount depends on your lifetime record of National Insurance Contributions. 

Next are employers’ pensions.  There are two types – (a) the increasingly rare final salary schemes also known as defined benefit schemes where the amount of pension that you’ll be paid is set and (b) the defined contribution schemes where you get no promise as to how much pension will be paid but contributions go into a pot to buy whatever annuity it will buy when you retire.  Employers’ pensions are a no-brainer, if you can join the scheme then do – the earlier you start getting contributions in the higher your pension will be.  It can seem as though, when you’re 20, there’s plenty of time to worry about a pension later – but the problem is that if you start later it costs a lot more to pay in enough to give you a decent pension.

Last there are personal pensions.  These are complex and you need to get advice before going into one.  But don’t let that put you off.  If your pension arrangements from the state and your employer do not add up to enough you’ll need to make some private provision.

Savings and investments are a huge subject.  There are lots of websites that can help – is one (and a good example of what the government can do for you).