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    • jsmordan
    • By jsmordan 5th Mar 18, 8:10 PM
    • 1Posts
    • 1Thanks
    jsmordan
    16 years old with little money knowledge
    • #1
    • 5th Mar 18, 8:10 PM
    16 years old with little money knowledge 5th Mar 18 at 8:10 PM
    Hi there,

    I'm 16, almost 17 and I'm currently earning around 504/month and 105 of this is my outgoings. Leaving 399 spare.
    I currently have a TSB under 18's account in which all my money goes into and I am awful with money. When simply seeing something, I will automatically want it and most likely buy it. I seem to go through phases of the things I want to get but then know I won't use them a lot when I buy them (for example, an iPad, Camera etc) I love technology and always want the best of it but this is what gets the best of me.
    To get to the main point I'm wondering what type of savings account would be good for me? I'm trying to cut down on wasteful buying like McDonald's and I feel like if the money wasn't there then I can't buy the little things. I'm not sure if a savings account is right for me or an ISA.
    All help will be appreciated! Thank you!
Page 1
    • steampowered
    • By steampowered 5th Mar 18, 8:53 PM
    • 2,598 Posts
    • 2,542 Thanks
    steampowered
    • #2
    • 5th Mar 18, 8:53 PM
    • #2
    • 5th Mar 18, 8:53 PM
    Hi there

    The best thing to do is to open a savings account. As we are not talking about big sums of money, and given that interest rates are very low, it does not really matter what the interest rate is. Perhaps just open a separate savings account with your existing bank.

    As you won't be paying income tax there isn't much benefit to using an ISA.

    Not being able to immediately access that money for impulse purchases is the key thing for controlling your spending.

    A good way of managing this is to set up a standing order to move a certain sum of money from your current account into your savings account each month immediately after pay day. What goes into the savings account should only be available for planned purchases. Everything that is left in your current account is yours to deal with as you see fit.
    Last edited by steampowered; 05-03-2018 at 8:56 PM.
    • AndyPK
    • By AndyPK 5th Mar 18, 8:55 PM
    • 2,907 Posts
    • 817 Thanks
    AndyPK
    • #3
    • 5th Mar 18, 8:55 PM
    • #3
    • 5th Mar 18, 8:55 PM
    Well done for doing the calcs and knowing your out goings.

    Maybe add some for miscalanious.
    I do like the McDonald's surveys. Giving a big mac and fries for 1.99.
    Keep some filled in ones in your wallet.

    Maybe a savings account where you can only make 2 withdraws a year ! Would make you think. Or one with 30 days notice.

    When young you do always want something and sometimes disappointment results.

    Maybe try and save for a big item like a car or house deposit. Much needed
    These days and only treat yourself to gadgets every 6 months once you are sure it's worth it.

    Also see if Santander junior is any good to you
    • MallyGirl
    • By MallyGirl 5th Mar 18, 9:30 PM
    • 2,741 Posts
    • 7,746 Thanks
    MallyGirl
    • #4
    • 5th Mar 18, 9:30 PM
    • #4
    • 5th Mar 18, 9:30 PM
    If you are serious about breaking the spending behaviour you could open a Halifax ISA at 3% interest and pay into it - you can!!!8217;t access the money till you turn 18.
    • mjp101
    • By mjp101 5th Mar 18, 9:46 PM
    • 2 Posts
    • 0 Thanks
    mjp101
    • #5
    • 5th Mar 18, 9:46 PM
    • #5
    • 5th Mar 18, 9:46 PM
    It seems junior ISAs are normally pretty good.
    Regarding managing your money, it's great to save and spend together. Maybe create a direct debit to another account so you do not spend the money.
    • geeovana
    • By geeovana 5th Mar 18, 10:10 PM
    • 43 Posts
    • 41 Thanks
    geeovana
    • #6
    • 5th Mar 18, 10:10 PM
    • #6
    • 5th Mar 18, 10:10 PM
    Hi there

    The best thing to do is to open a savings account. As we are not talking about big sums of money, and given that interest rates are very low, it does not really matter what the interest rate is. Perhaps just open a separate savings account with your existing bank.

    As you won't be paying income tax there isn't much benefit to using an ISA.

    Not being able to immediately access that money for impulse purchases is the key thing for controlling your spending.

    A good way of managing this is to set up a standing order to move a certain sum of money from your current account into your savings account each month immediately after pay day. What goes into the savings account should only be available for planned purchases. Everything that is left in your current account is yours to deal with as you see fit.
    Originally posted by steampowered
    Is this not bad advice? Yes, the OP isn't paying tax right now, but even putting 5000 into a S&S ISA now will give relief from tax on the gains in later years! Giving the OP is starting so young, that 5K could be worth a fortune in a few decades.
    • xylophone
    • By xylophone 5th Mar 18, 10:31 PM
    • 25,599 Posts
    • 15,130 Thanks
    xylophone
    • #7
    • 5th Mar 18, 10:31 PM
    • #7
    • 5th Mar 18, 10:31 PM
    If you don't have a JISA you could open a Junior ISA with Coventry Building Society and earn 3.5% while you can.


    You can pay in up to 4128 per tax year.

    https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

    Pay in as much as possible in this tax year, then from 6 April set up a SO from your bank account to pay in 344 a month.

    You won't be able to access the cash until you are 18.

    Once you are 18 you may wish to consider a LISA to help you save for your first property.

    https://www.moneysavingexpert.com/savings/lifetime-ISAs
    • Bravepants
    • By Bravepants 6th Mar 18, 12:19 AM
    • 402 Posts
    • 436 Thanks
    Bravepants
    • #8
    • 6th Mar 18, 12:19 AM
    • #8
    • 6th Mar 18, 12:19 AM
    Hello, the amount of money you plan to save is 80% of your take home pay. A savings rate of 80% is a huge proportion, especially for one so young. You say your outgoings are 105 per month, does that include paying your parents "keep"? Who buys your clothes etc.? Do you go places with friends? In other words have you been realistic about your required spending?

    Perhaps stashing half (50%) might be more reasonable and a target you are more able to stick to? That way you will still be saving a huge proportion of your money, but still enjoying a carefree life.

    You will be in education/training until you are 18, so getting used to saving before you enter the world of work is a great thing, and you will be used to putting money away each month. But don't be too hard on yourself!

    You are right about not spending money on useless gadgets, and keeping up with the latest mobile phone tech is just silly. I believe you have stumbled across something called "hedonic adaptation" (Google it!)
    • Bravepants
    • By Bravepants 6th Mar 18, 12:46 AM
    • 402 Posts
    • 436 Thanks
    Bravepants
    • #9
    • 6th Mar 18, 12:46 AM
    • #9
    • 6th Mar 18, 12:46 AM
    I just thought of a few more bits of advice I have picked up over the last few years that you might like to carry with you now that you are starting out on your path through life:

    1. Don't get weighed down by "stuff"! Only own what you love or need.
    2. Don't buy a bigger house than you need.
    3. Don't buy a bigger car than you need.
    4. Avoid credit card debt...or if you have to have a credit card, pay the balance off every month.
    5. Maintain a "capsule wardrobe" (Google it!)
    6. Don't try to "keep up with the Jones's"
    7. ALWAYS join your work's pension scheme
    8. Always keep learning to develop your skills and knowledge. Self improvement will get you more income (and keep you busy and you mind off spending )
    9. Try to live close to where you work so you don't have to commute, saving fuel, rail ticket costs, and time you could be spending with friends or family!
    10. Plan ahead, but don't worry about the future (or the past, it's gone) concentrate on the here and now.
    • CommyTooper
    • By CommyTooper 6th Mar 18, 6:42 AM
    • 55 Posts
    • 71 Thanks
    CommyTooper
    Open a regular saver a/c. Set up a standing order.
    It is just growing, up that is all, nothing you cannot figure out.
    • steampowered
    • By steampowered 6th Mar 18, 10:50 AM
    • 2,598 Posts
    • 2,542 Thanks
    steampowered
    Is this not bad advice? Yes, the OP isn't paying tax right now, but even putting 5000 into a S&S ISA now will give relief from tax on the gains in later years! Giving the OP is starting so young, that 5K could be worth a fortune in a few decades.
    Originally posted by geeovana
    There is no benefit for the Op putting his money into a cash ISA at the moment, as he is not paying income tax.

    If the Op does start paying income tax, he can move his money into a cash ISA at that point. It is a good idea for people to move their savings around to get the best rate every now and then anyway.

    Stocks and shares investments, such as a S&S ISA, are not a good idea for the Op - we are only talking about a modest amount of money which he Op is going to need during the next few years.
    • AndyPK
    • By AndyPK 6th Mar 18, 12:29 PM
    • 2,907 Posts
    • 817 Thanks
    AndyPK
    I'm not against ISA's, especially if they are 3.5% !!


    But the money won't be in their forever. Will be withdrawn for car, house etc.. I would have thought. (and you get a big allowance these days). How much is it this year for 18+ ?
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