Yorkshire Building Society shares some tips on how young people can start their savings journey.
Financial shocks can come from anywhere, at any time and affect any of us at any age. The Covid-19 pandemic quickly followed by a cost-of-living crisis has been testing for all of us. But for those without good financial resilience, these challenges have been even tougher to navigate and to recover from.
In particular, our new report found for young people just entering into adulthood and reaching financial independence, barriers to financial wellbeing such as cost-of-living pressures, the burden of debt, wage stagnation, and the challenges of getting onto the housing ladder have never felt more present.
Starting a saving habit with all that going on can feel daunting but as our report has shown there is a willingness and desire to learn and gain confidence but where do you start?
The first step on your savings journey is perhaps working out your budgets and being realistic on how much you could save – even the smallest amount will help you get into a habit.
Then set yourself a target, setting targets can help motivate you to save – especially if the payoff will be enjoyable or life-changing. Imagining the first day in your own home could help you keep on track towards saving a house deposit, for example. Short-term goals can also be useful. If you’ve got a fun weekend of plans coming up, saving up a little towards the cost beforehand can help you enjoy it, guilt-free. So instead of buy-now-pay later, perhaps think of it more as save now and buy later.
Next is opening a savings account. There are lots of accounts available, so before you dive in really have a think and do some research on what might work best for you.
A regular savings account is designed for you to add money every month and helps you build a savings habit. There’s usually a cap on how much you can add each month and there may be a limit on how often you can access your money.
An easy access savings account is usually quite flexible, and you can add and take out money quite often. This account might be suited to lots of different goals, both long and short term.
Once you’ve got your account up and running try setting up a standing order to pay a set amount from your current account to the savings account on payday. This way, you’ll know how much you’ve got left to spend from day one. But you might also find yourself under budget after a quiet weekend – try transferring this extra money into your savings as you go through the month.
Your account is open, your goals are set, all that’s left is to watch your savings start to grow!
