As part of our investigation into young people and pensions we spoke with Freddie Ewer, Founder of RedSTART; Investment Consultant, Redington and along with some great info on pensions he also provided us with some top tips for saving.
If you are just starting your first job, whether you have just graduated from university, completed your apprenticeship or simply jumped straight into full time work after finishing school or college, the temptation to spend, spend, spend and enjoy your new-found financial freedom can be great. It’s a really good idea though, no matter how much you might want to push it to the back of your mind, to learn how to manage your money and to start preparing yourself financially for the future -starting now will ease the pain later in life (boring but true!).
Tip 1: Start saving early
The sooner you get into the habit of saving the more time you have to save up.
Tip 2: Draw up a monthly budget
Keep track of what is going in and out of your account and try and put what you have left into a savings account.
Tip 3: Set up a standing order
Consider setting up a standing order to be transferred into your bank each month. If you don’t have to actively transfer it over, you are more likely to keep the payments up.
Tip 4: Diversify
While it’s a good idea to have some money in cash accounts in case you need to access it quickly, other types of investments like a stocks and shares ISA can give you higher returns.
Tip 5: Micro-save
If you struggle to find the money to put into a savings account, but are still keen to do so, consider getting a micro-saving app, such as Moneybox. These allow you to make small payments when you make a purchase or when you have spare cash, so you could find your savings adding up without you realising.
Tip 6: Increase your pension payments
If you are saving via auto-enrolment, consider paying in more than the minimum contribution. The tax benefits you receive through a pension scheme this make it an efficient way of saving.
Tip 7: Cut back on unnecessary purchases
If you are struggling to find disposable income, consider if there is anything you could cut back on in your day to day spending. For instance, do you buy your lunches every day? Consider making your own and put the amount you would have spent straight into your savings account.
So there you have it, top tips for saving from Redington. You can read more advice and guidance from experts at Redington in our articles on understanding auto-enrolment and why not just stash some cash away for old age? which you’ll find in our advice section.