The responsibility of managing money might often seem challenging if you’re young. However, making the most of your own money is now simpler than ever thanks to current technology.

According to a recent NatWest survey, 75% of young people are concerned about how the cost-of-living problem will affect their finances. Of those 75%, 79% admitted they felt helpless since they had no idea how to effectively preserve their money.

Here’s our best advice for young people to achieve better money management: 

Lifetime ISAs (LISA)

Lifetime ISAs are intended to give under 40’s government-backed assistance in saving for retirement or a first house.

Every year, savings are topped up by 25% (up to a maximum of £4000). To open a lifetime ISA, you must be between the ages of 18 and 39. You get the bonus each year that you contribute. You can make contributions to your LISA up until the day before your 40^th birthday.

Therefore, you could receive a bonus of £33,000 if you open a LISA at the age of 18 and save the maximum amount each year until you’re 50 – if the current scheme stays the same.

Naturally, there are restrictions. You will incur a 25% penalty if you remove your funds prior to turning 60 or don’t use them to purchase your first house.

First time buyers

Once you start to realise how much you need to save for a deposit for your first home, you may be wondering how exactly you can save this amount of money. The prospect of saving for a house deposit can seem as intimidating as conquering Everest. It can be challenging to decide where to start when it comes to savings. There are many ways to save, whether you are beginning from scratch or are an experienced saver, even if you don't have any current money or relatives to support you.

• Save your change - When you make your initial purchase, it's simple to assume that your small change won't alter much. However, you'll be astounded by how much it accumulates once you start setting it aside. If you’re not using cash – as many of us aren’t these days – many banks now have the option to ‘round up’ your purchases, which means you can save without even realising.
  
  
• Watch your spending - We often spend money without giving it much thought, so having more awareness of your spending habits might assist you as a first-time buyer to better manage your money and start saving. Starting with a budget is the obvious first step, but it’s important to compare how much you’ve actually spent at the end of each month??? to really understand how you’re spending your money.
  
  
•  Make a switch - Look for alternatives you can make to save money. This might be as significant as moving somewhere with lower rent or returning to live with a parent or another member of your family to help you save. Or something as simple as switching from a latte purchased every day to one made at home or swapping your meal deal for a packed lunch.

Students – living at home or alone

It's critical to monitor your spending, which could help you see how much money you have to budget each month. A good way to do this is by making a spreadsheet of your finances. Include your income from part-time jobs, parental contributions, student loans, scholarships and bursaries as well as ordinary outgoings like rent and phone bills.

You'll need to shop for food wisely. At the beginning of each week, perform a cost-effective 'big shop' to cut down on the number of takeaway meals you order or ‘paying through the nose’ at convenience stores. Instead of well-known names, choose supermarket value items and shop late in the day when many items are reduced. Plan your daily meals in advance and divide the cooking among your roommates. Making your own drinks and lunches will slash your food bill.

Avoid overpaying for transport. Most institutions are either located in cities with great transport links or on campuses with everything right outside your door. It’s likely you won’t need a car during your studies. Instead, benefit from student travel discounts.

For personalised advice on managing your savings and investments, get in touch or call 0121 285 8528 to talk with our team.

The purpose of this blog is to provide technical and generic information and should not be interpreted as a personal recommendation or advice.

Disclaimer: The value of your investments can go down as well as up, so you could get back less than you invested.

Picture source:

https://www.pexels.com/photo/person-putting-coin-in-a-piggy-bank-1602726/