Put money aside for your future
It’s really important to get into the habit of putting money aside for your future, as soon as possible.
The longer you save for, the more you can take advantage of something called compound interest. In very simple terms, compound interest works as follows:
You start off with £1,000. You potentially earn £10 interest on this.
In the next period, you will be earning interest on £1,010 so you might make £11 in interest.
Then, your starting point in the next period is £1,021 and so on…
Now, once you’ve decided how much money you are able to save, you should have a think about whether you want to save it or invest it.
The current interest rates on cash savings are very low (correct as at 15/01/2021) – it’s really difficult to get a savings account that pays you interest higher than inflation, which means your money can potentially lose value by staying in a low interest account. If you can take the risk that shares will go down as well as up, then investing might be a better option for some/all of your savings.