Saving money for Generation Y or millennials may be a foreign concept due to the strains and pressures of life financially in 2016. By using your money wisely and saving in a smart way you will find that the pressures and strains will gradually loosen its grip. We have gathered some basic starter tips for all those who are looking to save for the first time. We have covered a full range of topics such as quick basic tips, first-time mortgage schemes and ISAs. We hope it will serve you well into your future.
Savers say that money in the bank helps them:
A study conducted by communityally.com have found that having savings can have a positive effect on your life. Take a look at the results to see how savers felt;
92% were confident in facing the unknown,
89% felt proud of their achievements,
84% felt independent
78% realised their life goals.
All of these positive emotions can help you to find comfort in your life.
Financial Planning – Basic Tips
Write down your financial saving goals. It leads to 49% more chance of achieving them.
Aim to save 10% of your earnings per month.
Have short, medium and long-term goals, but don’t be afraid to adjust them as time goes on.
Build an emergency fund for unexpected problems such as job losses or car repairs. It is estimated that 6 Months of take-home pay is a sufficient amount. These savings can help relieve monetary stresses in life and help you to get on with your life with less worry.
Pay off your credit cards. On average £2,293 of credit card debt is owed per person in the UK.
Once you have paid off any debts you may have, begin planning for your retirement; It is never too early. It is recommended you replace 85% of your annual income in each year of retirement.
Enforce the 90/10 Rule – End of year bonus? Put 90% towards your financial goals and spend the 10% on yourself. If you enforce this strategy you will be creating a nice nest egg for yourself when you really want to spend it, not when your impulses dictate.
Help to buy ISAs
To help kick-start your deposit for a new house, check out the government’s help to buy ISA scheme. The scheme is perfect for 1st-time buyers as 25% is added by the government if used towards a mortgage. (3000 max) For example, for every £200 you save the government will provide a bonus of £50.
Switch Bank Accounts
7 Day switching scheme’s mean it is now easier to change banking to a company that will offer you the best rates. As of the 20th of April, Santander 123 pays interest of up to £20,000 which is 4x better than the next best account. By shopping around for the best deals you can save 100’s on travel, mobile & breakdown insurance with packaged accounts.
Fixed Rate ISA
For longer term savings, look no further than fixed rate ISA’s. These ISA’s lock away access to your money for an agreed time. This usually provides better interest rates and more capital in return. You can deposit up to £15,240 per tax year. You can find rates up to 2.33% and the first £75,000 is guaranteed protection under the FSCS.
Keep a look out for additional tips on our website and blog.