You have the best chance at financial freedom in your life time if you can establish good savings habits when you’re young. By starting young your money has the longest time to compound and accumulate which is the easiest way to save a fortune. Here are five saving tips to help you save more when you are young.
Save then spend
Automatically transfer a portion of your income to savings when it is deposited in to your account. Try increasing the amount by small increments each month. If you are saving a decent portion of your income and have allocated the rest to living costs, then there is no shame in spending it.
Separate your cash
Create a different account for your savings and keep it away from your spending money. Look for an account that pays the highest interest available. Once you have a bit saved up you should look at invest some of it. Small investments and ongoing contributions can grow to large amounts given enough time.
Delay your spending
It is easy to fall prey to impulse spending, especially when you first start earning your own money. Do enjoy the independence that comes from money, but don’t develop habits that will cost you dearly in the future. Use a ‘To buy’ list to delay your spending for two or three weeks to prevent unnecessary purchases.
Stay debt free
Live on what you earn not what you can borrow. By learning how to live within your income when you’re young, you will establish good habits to help you stay debt free for life. Don’t get sucked in by interest free periods or rewards points, the benefits rarely, if ever, cover the cost.
Superannuation co contribution
If you’re not earning too much then you may be eligible for the Government superannuation co-contribution. If you make an after tax contribution to your superannuation account, the government will chip in up to $500 each year. It may not seem like much but if it grows at 8%, it will be $26,000 by the time you can access it! If it is all you can save it’s still a great way to save when you’re not earning much.
You don’t have to live on bread and water but by making sensible spending decisions and investing early you can save more when you are just starting out. This gives you the best chance at financial security later in life.