With two-thirds of millennials admitting they don’t save enough, and saying they’re finding it difficult to get the cash together for a deposit on a property, Barclays has suggested a few ways in which they could boost their savings without giving up on socialising or treats.
According to the findings of a survey carried out by the bank5, millennials spend on average £3,312.72 a year on things like takeaways, eating out, buying clothes and spending time with friends.
Barclays has concluded that the answer is not to sacrifice but to swap. As an example, they suggest that simply swapping out every fifth takeaway, shop-bought coffee and night out could add up to a saving of over £600 each a year.
Three-quarters of those surveyed said they would be willing to make a few compromises if it meant that they could meet longer-term goals, such as the purchase of a car or a home, more easily.
A mix and match approach
Other ideas include changing the route to work to avoid tempting coffee shops, mixing expensive gym classes with free or less-expensive activities such as local running clubs, and preparing and sharing food at home with friends.
Tips on managing money
Building up savings requires a disciplined process and takes time and patience. Many people find it helpful to set up a standing order that goes through on pay day to transfer money into a savings pot, removing the temptation to spend.
When it comes to purchases, it makes sense to take a step back and consider whether it’s something you really need or just something you’d like. If it’s the latter, then you have to think about the impact it would have on your future plans, such as buying a property.
When it comes to building up cash for the future, making the most of your £20,000 tax-free ISA allowance makes good sense. If your goal is buying your first home, then a Help to Buy or Lifetime ISA could be a good choice. And although retirement could seem a long way off, putting cash into your pension when you’re young will give your money time to grow. Don’t forget that contributions into a pension attract valuable tax relief too.
5Barclays, Feb 2019
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.