18 year old - Looking to start saving!

liamcowan1

Thanks for replying again guys.

@bodmil - I will be putting money in monthly, hopefully atleast £100 providing I don't have any emergencies. I've been looking at accounts with both A+L and Santander and I'm liking the sound of them.

@214jay - I'll sign up right away

@fkelanne - Thanks! Hopefully I can sort it out soon

Looking to get my spreadsheet done within the next week or so, ready for payday

Primrose

Unless you can assure yourself of a 5 year time span, investing in shares by way of unit trusts in an equity ISA might be an unrealiable way of putting money aside, but if you can think in that timeframe, a broker like Hargreaves Lansdown can offer a wide range of funds, many of which will accept a minimum monthly £50 standing order.
As for cash saving, the best way of avoiding spending money on useless things is to set up a standing order from your current account every month for an amount you know you can afford so that you don't miss the money. Then an additional savings can be made according to how much spare cash you have on a monthly basis.
A good habit to get into is to review your savings status at the end of every month. It will start to be a lifetime habit and you're more likely to avoid getting into debt in the future.

liamcowan1

Hi Primrose, thanks for posting.

Just seen your message

I guess the main reason I'm starting to save this young, is to avoid debt later on in life. I've already opened a fresh savings account (recommended from here) and have a standing order of £250 every month, I'm hoping to have atleast another £100 to add to that by the time I'm finished spending on essentials.

Lots of people have recommended shares and ISA's to me but I'm terrible when it comes to understanding these sorts of things.

Could you possibly point me in the right direction of where I should start learning about them and understanding whether or not I believe I will benefit from these.

Thanks for posting

Primrose

liam - I've been investing in equities via ISA & PEP wrapped unit trusts for many years but am by no means an expert and have burnt my fingers on more than one occasion, especially following the herd into tech stocks which collapsed. So I'm probably not the best person to advise you.
It may help you to borrow some good books on the topic of investing from your local library or subscribe to some money/investment magazines, and when you feel ready, start investing monthly with a very small subscription.
I invest through Hargreaves Landsdown although there are brokers who offer a similar service. Their website (h-l.co.uk) provides a lot of information about funds which will help you understand more about the different sectors of fund investment which exist. Equities investment requres a longer term (5 year minimum investment time span). If you go this route now, with the volatility of the market you may find your investments may not have made your any money (or even made a loss) just at the time when you are thinking of needing secure funds for a house deposit, so don't go this route unless you are prepared to risk losing some of your investment.
For the time being, Cash ISAs are probably one of the best risk free savings vehicle for you. If you can put money away for the longer term you will build up a tax free nest egg. The Savings section of this website should give you a few ideas.

liamcowan1

Thanks for the prompt reply.

I'm going to have a browse on Amazon for some books to give me a heads up about shares, equities and ISA's. I probably won't want to invest in any of the high risk stuff just yet until I understand every element of it and how the system works, by this time I should have some money saved.

Those times where your fingers did get burnt, I'm sure you've learnt your lesson and gained some experience.

Going to check out the Hargreaves Landsdown website when I'm home from work tomorrow and have a good read of their website and the information that it contains.

I can put money away long term (the benefits on being a young saver ay ) so I'll check out the ISA's on the site.

Thanks again for your input Primrose

leahciM

Liamcowan1, I've just been reading your post and think it might help if I explain what an ISA is clearly for you -cos they really are very good for saving money.

First off, an ISA can be split into a cash ISA or a stocks and shares ISA - lets leave the stocks and shares ISA for now and just look at the cash ISA.

The term 'cash ISA' sounds grand and confusing, but it needn't be. It is basically a savings account where you do not have to pay any tax on the interest made. In a normal savings account, you have to pay (I think!) 20% on any interest you make, with a cash ISA you get that 20% rather than give it to the taxman.

ISA's come with rules, the most basic and important being that you can only put £5100 into an ISA each tax year (April-April). Looking at your posts, I don't think you will reach this maximum for the time being, so the rule is negligible for you. However, it is worth mentioning that you can only PUT IN £5100 a year, regardless of how much you take out.

For example, say you have put in £5000 -that means you can only put in £100 more that tax year. You then take out £250 to pay for car repairs but you can STILL only put in £100 that tax year - to me this is a great incentive to not touch cash in my ISA.

Other rules depend on which bank/provider you go with. The interest rates will vary (check MSE for current best rates) as will the flexibility of your account. By flexibility, I mean how often you can take money out/put money into your account - I don't mean to sound condescending but at your age it's probably best to go for the most flexible account you can find, again MSE can help you compare them.

Last but not least, the £5100 limit is only per year. So say you save £3000 this year, next year you can keep adding to that £3000. (though you should check that your bank has not dropped the interest rate to hardly anything) The compound interest will soon add up nicely.

I'm sure there's a couple of points that I've missed which the people on here who are much more knowledgeable than me can help out with, but when I first wanted to open a cash ISA, these are the details that were most important to me.

Hope this helps.

redpin_2

i think what Lokolo said is quite sound

i save £1000 a month

£320 net wage weekly

i put a fixed amount every week; £250 into savings

then using the remainder money i have which is £70 + more if i do o/t

£50 (£23 on driving lessons, £10 on work food, rest on travel + haircuts)
£20 goes into a spending money account, and accumilates. i recently use it for credit card purchases, prior to that i dedicated it based on whats happening at the time i.e. xmas, going out next friday,
making several accounts if i need be. luckly for me im able to work o/t so i dont dig into my weekly savings target; if i had something planned that would cost alot, i'd cover it by working more

if i was in your sit, i'd put £250 into a monthly saver as you know you will get that every month, find out how much money you likely to spend on essentials like i mentioned above i spend £50 a week (£200 a month), then from there set out other target spends i.e. leave money aside for leisure possibly, i.e. £30 a week (£120 a month) each week you dont go out, put the £30 away

rictus123

redpin wrote: »

i think what Lokolo said is quite sound

i save £1000 a month

£320 net wage weekly

i put a fixed amount every week; £250 into savings

then using the remainder money i have which is £70 + more if i do o/t

£50 (£23 on driving lessons, £10 on work food, rest on travel + haircuts)
£20 goes into a spending money account, and accumilates. i recently use it for credit card purchases, prior to that i dedicated it based on whats happening at the time i.e. xmas, going out next friday,
making several accounts if i need be. luckly for me im able to work o/t so i dont dig into my weekly savings target; if i had something planned that would cost alot, i'd cover it by working more

Redpin thats very impressive,what you have saved already and what you plan on saving! Can i ask how old you are and what your saving £100k for? Well done you.:beer:

redpin_2

i have £23k saved up so far, and just gone 21 years old - i started saving when i started my first job at 19 which i'm still working at today. i set a high savings target because i'd like to have the ability to earn money via interest. this got spured on after difficulty getting a job for 6 months and things are unfortunately getting worse. if i can earn 4k (£340 a month) from interest come the time i might get unemployed then of course i'll be v-happy. i will want to work but i wont feel as pressurised as i can give my parents money if they moan, or use the money to invest in my self i.e. education - something i wouldnt spend with money i worked for with the amount of doubt in my self confidence

i think you should set up an online banking account; making a dedicated savings account for everything you do (i use halifax for this) which can overcome the issue of spending money without knowing what you spend it as it'll make you think twice about spending money but you'll still have the ability to transfer the money over if you wanted, just take a bit more effort i.e. going to an internet cafe/bank/home

rictus123

redpin wrote: »

i have £23k saved up so far, and just gone 21 years old - i started saving when i started my first job at 19 which i'm still working at today. i set a high savings target because i'd like to have the ability to earn money via interest. this got spured on after difficulty getting a job for 6 months and things are unfortunately getting worse. if i can earn 4k (£340 a month) from interest come the time i might get unemployed then of course i'll be v-happy. i will want to work but i wont feel as pressurised as i can give my parents money if they moan, or use the money to invest in my self i.e. education - something i wouldnt spend with money i worked for with the amount of doubt in my self confidence

i think you should set up an online banking account; making a dedicated savings account for everything you do (i use halifax for this) which can overcome the issue of spending money without knowing what you spend it as it'll make you think twice about spending money but you'll still have the ability to transfer the money over if you wanted, just take a bit more effort i.e. going to an internet cafe/bank/home

That is some dedication :T

With that sort of savings do you not think you should look at shares and go for double that to allow for inflation etc aswel? Iv just started a diary to pay off a bit of debt over the next 6 months, after that il be flat out saving! Stop making excuses and getting my money looked after! I know i can do it, once i get going il be fine and motivated. Got a payrise any day now and another in a years time, so il have alot more disposable income to play with. :j