Category: Planning

When Should I Start Saving for the Future?

Some of us think that it is a good idea to save for the future. Perhaps saving up for a deposit for a home, towards retirement or in case we lose our job might be something that some people might be saving up for. This means that perhaps we should all save up for the future. We may wonder though, when we should start to do this.

From birth

It might be that you think it could be a good idea to start saving money up from birth. Obviously, we can’t do that but we can do it for our children. We can open them up a child saver account, child trust fund or similar and start putting money into it. This can be money you regularly give them as parents, money they get as gifts or just odd bits of money they get from time to time. Some children will get given a lot more money than others but if you can start saving it, then it can start gaining interest and they will have some accumulated. This will be better than buying them toys and things when they are very young as they are unlikely to really need them. The money is likely to be far more useful as they get older.

Through childhood

As children get older they may start to want pocket money or be more likely to be given money as gifts rather than presents. This means that they will have opportunities to spend money on all sorts of things like sweets, comic, toys, books and games. However, as a parent you will also have the opportunity to talk to them about saving and the benefits of doing so, some parents choose to let their children decide, some suggest they spend half and save half, others gently encourage them to save everything. You will have to decide which approach you feel will be the most relevant for your child. If you cannot buy them many treats then you might like them to be able to treat themselves but if you can afford it you might think it is more valuable for them to save. It can get a bit awkward when relatives give them money and expect them to spend it on something, so you will have to decide how to deal with that as well.

Once we start work

Starting work is a good opportunity to start seriously saving. This is because we will have more money coming in than we have ever had before. If we are still living with parents then our expenses are unlikely to be really big so we will be able to save a lot of money. Of course, we might like to treat ourselves to all sorts of things and may also want to pay our way at home and give some money to our parents. However, if we can get into the habit at this point, of saving money then this can help us to build up a good pot of savings and get us into a routine of not spending everything we earn which can be a great habit for life.

As soon as possible

If you have not started saving yet, then starting right away is a good thing. Of course, if you have debts, then it could be better to pay those off first. These can be costly and repaying them early will mean that you will not have to pay out so much money in interest. However, you may find that the loan is not flexible and here is a fee for repaying it early. Make sure that you check and if it is very expensive to make early repayments (often called an early redemption fee) then it will be wise to save instead.