Young people need to start saving for their future welfare
A new survey from the Office for National Statistics has declared that “Half of all 22 to 29-year-olds in the UK have no savings at all.”
Let that sink in for a while. Now, couple that with the fact that the country has not only seen a record number of jobs in recent years but also garnered the highest labour participation rate and the lowest level of unemployment since the 1970s.
It doesn’t take a genius to notice something is very broken with the process when a nation’s economy can be thriving fairly well and yet, the nation retains a generation of youth that’s this financially insecure.
It’s obvious albeit relevant to say that those without savings are at the mercy of the political climate for the next 30 or even 40 years. Sure, the current social welfare system may be a comfortable safety net but who’s to say that it won’t worsen?
The pattern persists throughout many parts of the world with one in six millennials saving more than $100,000 and about half having saved nothing at all. Overall savings, while rare in continental Europe, are generally higher than both the UK and the US.
There is light at the end of the tunnel though, as we bring our attention to a contrasting trend that exists concurrently; extreme saving. As saving half or more of their income becomes a growing form of behaviour, it seems that today’s youth, or at least a portion of them, are listening to the stern warnings being emitted by our fluctuating economies. Stories throughout the UK, US, Australia and other parts of the world imply that young people are saving a considerable proportion of their income even with modest earnings. The result? The ability to potentially retire in their 40s if they so choose.
Just how are these financially savvy youngsters getting ahead of their less-prepared peers? Here are just a few things that can be done to help improve your savings.
Acquire a refraining mindset
Back in 2010, Australians launched the “buy nothing new month” campaign, an initiative to spread awareness of money saving. Necessities like expenses for food, taxes and utility bills aside, the idea revolved around refraining from buying stuff you don’t need. If you are able to make a habit of not wasting money on compulsive purchases for a month, chances are you’ll be able to carry it on into other months. Ultimately, it’s all about mindset. It might be tough at first, but if you can truly identify the things you could do without, you may be cutting back on excessive spending in no time and this can, of course, lead to more money saved.
Savings account? Try a different bank
Another simple trick that many people will swear by is the old “out of sight, out of mind” tactic of storing your savings in not just a separate account but in a different bank for added measure. It reduces the temptation to keep pulling savings into your current account because you simply wouldn’t have as easy an access to it. Sometimes, you can be your own worst enemy.
Automate your savings
Ever tried automating a portion of your income as savings? People in their 20s are beginning to warm up to the idea, they don’t even have to remember to put money away once it’s instantly transferred from your spending account before they even have a chance to see it. You’re in for a pleasant surprise once you finally see the accumulation over time. Technology has added to this convenience with apps now able to analyse your spending habits and estimate how much you can afford to save, automatically moving money into your savings account.
It’s never too early or too late to begin thinking about your future financial wellbeing. No matter how gloomy a picture official statistics might paint, focus on finding a way around the obstacles that might spring up.