We currently live in a world where it’s becoming increasingly difficult to save money. Mortgages are becoming impossible to afford in some areas of the country. Millennials have been getting a hard time recently about spending and not saving for the future but is this really the case ? In a recent survey from Swift Money the people least likely to be in debt are over 54s (36%), followed by 18-24s (24%), not what you would expect is it?
We were thinking about this and wondered “What have we learnt from the older generation about money we could pass on ?” Here are some of our top tips that have been handed down through the generations.
Always have an Emergency £5 or £10 note ‘Just in Case’. When I was younger Mum explained that you should have an Emergency £1, just in case you got stuck and couldn’t get to a bank or cash machine or I lost my wallet. I remember my mum explaining that this money will help you out of a jam or tricky situation and she’s right it has on more than one occasion. Today £1 wouldn’t go very far but I still carry the emergency £10 note in my mobile phone case and my children carry their emergency £5 note in the back of their mobile phone cases.
Able to sleep cash
My Mother also passed on the idea of having a some cash put aside that will help you sleep at night. Her theory is that you always need some money in an easy to access savings fund that will help you out of a bad situation. The bad situations always happen whether there is a repair needed to the car or another unexpected bill the sleep at night cash can be accessed and help. As jobs have got less secure, I’ve upped my sleep at night cash to a level that will cover household expenses and mortgage payments for a few months. I put this cash into a savings account when I’ve had extra spare cash and it has definitely helped me sleep at night on a few occasions.
The benefit of the ability to sleep fund is that there never was any need to use expensive credit cards in times of need, which meant that costs didn’t rise. The greatest benefit I’ve always felt with the able to sleep fund is just that it cuts do on stress and anxiety levels.
Another savings tradition that Mum has passed is the Holiday Savings pot. I remember as a child that my parents would start saving for the Annual Summer Holiday in the Autumn of each year. I vividly remember sitting round with my brothers and parents in a September or October of each year and picking the holiday destination for next year. My parents would then put down the holiday deposit and each month they would put away money to cover the remaining cost of the holiday. As children we were always reminded to save a portion of our pocket money in order to give us enough for treats when we got to the Summer Holiday. I always remember we had a great summer holiday each year, with plenty of treats.
Contribute to a pension early
When I first entered the workforce at 18 I remember my Dad having a chat with me about the importance of contributing to a pension early. At that age, the thought of retiring seemed so far away, but it all made sense when my Dad explained the concept of compound interest. He explained that the earlier you start contributing to a pension the better, where your pension savings will earn you interest for a longer period of time. When he explained the concept in the simple terms of “money makes money” with interest from your regular savings and “free money” from Government contributions to your pension pot.
Do you feel that as a Millennial you are judged wrongly ? Are you more frugal than your parents ? Have a look at the infographic below and see where you fit in. Help spread the word, and don’t forget to use the hashtag #HowDoYouSpend and join the conversation with Swift Money at @SwiftMoneyUK