What age?

TDMum

I was just wondering at what age did everyone start saving? I've been reading posts trying to gain knowledge and I see that some people have,what I would consider as, huge savings. My husband and I aren't exactly old but we're no spring chickens either so I just feel a bit stupid for not thinking about it earlier when I read about people having a years worth of salary saved plus maxing out ISA's every year.

What age did you start and what % of your total income do you put into savings?

We're going to be saving 11% of our income per month but will put 50% of any commission, bonuses and overtime into the pot too.
We have 3 kiddly winkles and will be putting money aside for them each month too and will let them have it when they're 25, unless we find they need it for something "sensible" before then. We won't tell them about the savings as we want them to learn how to use money properly (unlike us!) first.

Does this sound like a reasonable start? Any hints/tips from saving savvy people?
:)

innovate

TDMum wrote: »

We won't tell them about the savings as we want them to learn how to use money properly (unlike us!) first.

Laudable concept. But how do you teach your kids how to "use money properly" if you don't tell them about savings?

TDMum wrote: »

.....will be putting money aside for them each month too and will let them have it when they're 25

If the money is in their name, they will be able to spend all of it once they are 18. If the money is not theirs, you will have to pay tax on any interest. This is in almost all circumstance the worst in terms of interest/money growth.

I suggest you search the forum for post on kid(s) and/or children's (childrens, child, etc) savings and investments.

atush

Quote:
Originally Posted by TDMum
We won't tell them about the savings as we want them to learn how to use money properly (unlike us!) first.


Innovate:
Laudable concept. But how do you teach your kids how to "use money properly" if you don't tell them about savings?

If you don't want them to have access till 25 you need to have the savings in your name, not theirs.

but you can still teach them about savings uswing cash accts for pocket money and bday/xmas gifts. you can also teach gtem by having chires to do for pocket money and only paying them if the work is done. Then explaining why they can't buy something they want of they don't save that weekly cash.

As far as your savings for them til 25, I suggest equity savings. I used investment trust plans.

TDMum

I will hold it in ISA'S in my name. They will be taught how to save money. They just won't be told there will be a lump sum waiting for them that we have saved for them. Lots of people I went to school with knew they had lump sums waiting for them so didn't bother trying with their exams or uni etc. they knew they'd have money so drifted until they could access it.
If our children they want something they will be taught to save for it. When they go to buy their first house or a family car for example we will give them it to help out.

TDMum

Thanks atush, 25 was maybe a bit over estimated. I just meant I want to be sure they're responsible enough to use it wisely rather than use it as beer money thanks for the advice!

Sanchsoot49

Hi TDMum

I used to spend everything I had and started both investing and saving far too late.

Still hoping to make nice nest egg on the basis of 10-15 years investing - the saving is for emergency fund/short term goals like holidays and maybe to get a new (er) car when the existing one has been round the clock a few times!

Good luck with your goals.

p00hsticks

My parents started me off when I was about ten - took me along to the local building society and opened up a savings account for me, and encouraged me to add in at least some of any money I got for birthdays and Christmas etc. I also added earnings from my saturday job as a teenager, and although the balance went down considerably when I was a student, I started adding to it again when I had my first job until it was used as a deposit for my first house. Now, as well as contributing to a regular saver each month and using my ISA allowance, I sweep any money left in my bank account at the end of the month into a savings account.

Mojisola

TDMum wrote: »

I will hold it in ISA'S in my name. They will be taught how to save money. They just won't be told there will be a lump sum waiting for them that we have saved for them.

The problem with saving for children is the choice between having it in their names and getting access to it at a time when they might not use it wisely and having it in your name when it will be counted as your money if you ever need to claim means tested benefits.

This can be particularly difficult if you have handed over the savings to one child and then have to use the other children's savings to live off. Also, if you are expecting to hand over quite big sums, keep up-to-date with the inheritance tax rules.

Eco_Miser

TDMum wrote: »

What age did you start and what % of your total income do you put into savings?

I can't remember that far back, but I had a savings account when I was six.
I never aimed to save a percentage of income, just whatever I didn't spend, which varied over the years but probably averaged around 20%. Incidentally, I've been living solely off my savings for the last four years and I'm still managing to save.

TDMum

Mojisola wrote: »

The problem with saving for children is the choice between having it in their names and getting access to it at a time when they might not use it wisely and having it in your name when it will be counted as your money if you ever need to claim means .

That's exactly what I had been pondering over, them having access to it at 18. I know I wouldn't have been sensible with it, neither would my husband. It wasn't until we were in our mid twenties and had started a family that we realised we had to start being "sensible". I know everyone is different and we may very well just have been Dafties but I'd rather not take the risk of them blowing it all when they may need it for something important later on down the line.

FatherAbraham

TDMum wrote: »

what % of your total income do you put into savings?

At present, I'm saving 35% of my gross income, plus the capital-repayments on my mortgage, which is about another 18% of gross.

TDMum wrote: »

We're going to be saving 11% of our income per month but will put 50% of any commission, bonuses and overtime into the pot too.

Why not save 100% of the discretionary cash?

TDMum wrote: »

We have 3 kiddly winkles and will be putting money aside for them each month too and will let them have it when they're 25, unless we find they need it for something "sensible" before then. We won't tell them about the savings as we want them to learn how to use money properly (unlike us!) first.

Sounds awful. When my son reaches seven years old, I'll start involving him in discussions about how his current investment pot is allocated to assets. By twelve, I'll be withdrawing from the fund-manager role, and essentially becoming his execution-only broker.

I'll make sure he understands that having a £10k pot (that's my projection for when he reaches seven) is equivalent to having peanuts, when one looks at the costs of retirement income, of purchasing accommodation for his family, and in comparison to his future earnings potential.

He will be fully comfortable with money by the time he leaves home, and will understand how much he'll need to work through his life in order to do well. He won't get a sudden "lottery win" out of the blue when he's twenty-five; he'll be entirely used to having a stash of capital to nurture and feed, and aware that he has large future obligations.

I think it pretty unlikely that he won't understand how to use money properly at that point.

Warmest regards,
FA