# savings



## EAN8 (Apr 15, 2011)

I am 18 and am a apprentice mechanic and want to start to put money away into my savings but I want to know what is a good amount to have in my savings account?


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## thefettler (Feb 23, 2013)

As much as you can, as soon as you can! Seriously though save what you can afford to, with interest rates so low might be worth clearing debts first, I bet Mr barclaycard still charges 15%

Then check out a pension


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## Will_G (Jan 23, 2012)

I think as a rule of thumb they say roughly six months wages saved as a minimum for any unforeseen circumstances. Problem just now making any money on your savings with interest rates being low is going to be difficult.


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## nbray67 (Mar 22, 2012)

Speculate and bang some £££'s into shares. Carries a risk but can net you decent gains if you are looking at mid-long term savings.
You'll not make any money by putting into a savings a/c or ISA at the mo as the interest are too low, great if you have a mortgage, ****e if you have savings.
At 18 tho, look at a pension, the earlier you can start a pension the better it will be, don't leave it too long in sorting out a pension. By the time you retire, they'll be no such thing as a State Pension to support you.


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## adlem (Jul 6, 2008)

I can only echo the above - at almost 24 and looking at houses the more you have saved the better! I dread to think how much I've wasted.

As said, ISA's and normal savings accounts give poor interest. You can do fixed term savings schemes where you pay in x amount a month over 1 or 2 years and get a better return on it Han a savings account. Don't forget you usually have to pay tax on the interest so an ISA being tax free may work out better depending how much you can save. The money saving expert website is very useful with the best deals and has a calculator which helps you work out how to make the most from your money.

Shares will give you the highest return but also carry the biggest risk...


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## majcas84 (Aug 24, 2012)

Sounds like you're just starting out with saving, so my advice would be to try and make regular payments from your wages/salary into an account (preferably an ISA).

If you can get into the habit of regular saving it really will make all the difference in the long-run. Determine a realistic amount that you can pay into savings each time you get paid and do it as soon after so that the money isn't tempting you to spend it. If the weekly/monthly amount is too high you might have to skip the odd payment now and again and this will break the habit that you want to try and get into, so be realistic.

As has already been said there's not much of a return on cash at the moment but I don't get the impression that other 'investments' are what you're looking for just now. There's a lot to be said for safe, steady saving when you're just starting out. It will build up if you keep at it. Come back to the riskier stuff when you've got a bit of a cushion to fall back on. That would be my advice.


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## Ross (Apr 25, 2007)

adlem said:


> I can only echo the above - at almost 24 and looking at houses the more you have saved the better! I dread to think how much I've wasted.
> 
> As said, ISA's and normal savings accounts give poor interest. You can do fixed term savings schemes where you pay in x amount a month over 1 or 2 years and get a better return on it Han a savings account. Don't forget you usually have to pay tax on the interest so an ISA being tax free may work out better depending how much you can save. The money saving expert website is very useful with the best deals and has a calculator which helps you work out how to make the most from your money.
> 
> Shares will give you the highest return but also carry the biggest risk...


Am in the same boat,trying to save as much as possiable but its ruddy hard.


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## MEH4N (Mar 15, 2012)

Theres no set amount, but id say save as much as you can now whilst you dont have many expenses. Look at ISA's, savings accounts and even NSI bonds.


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## Ravinder (Jul 24, 2009)

The guys just asking about how much to put away as he wants to start saving some money. Thread is kind of going off topic with talks of investing in shares etc. As said though, just put across what you can. Be realistic about the amount that you can save. Do you get paid weekly or monthly? Set up a weekly/monthly standing order from your current account to a savings account so it comes out automatically. That is what I do and I just treat it like a normal bill. Are you good at keeping control of your money or are you a spender? A regular savings account is a good option as these accounts are generally designed for you to fund the account on a monthly basis without regular access. Generally, the term lasts for 12 months so after 12 months of savings you would then get access to the funds along with a little bit of interest. I can't afford to save much but save what I can. If you are just starting off saving money and that is your priority then don't worry too much about interest rates. The way I look at it, interest is just a little bonus for me at the end of it. I want to save because I want to, not because of the interest rate. Don't get me wrong, interest is nice to have on top but personally that is more beneficial if you have a lot of money in the first place because then you want to get the most out of it.
What works for me is having 2 savings account. A regular saver so I can put a set amount away each month and not get access to it otherwise I'll spend it! And a small amount that I put into an everyday access saver so if I ever need funds for emergencies or last minute purchases etc I can just dip into my normal access account and leave my regular saver well alone. There is different ways of doing it. Something like that may work for you.


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## Natalie (Jan 19, 2011)

I'd recommend doing a budget first so you have a realistic idea of how much of your wages you'll have left at the end of the month, then you can decide how much of that you can put into savings.

http://budgetbrain.moneysavingexpert.com/budgetplanner/edit/1627094

An ISA is a good idea as you can save so much a year without having to pay tax on it, although some current accounts may pay better interest rates, it depends whether you'd trust yourself to use it as a savings account instead.

http://www.moneysavingexpert.com/savings/?tab=sect7


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## kh904 (Dec 18, 2006)

Ravinder said:


> The guys just asking about how much to put away as he wants to start saving some money. Thread is kind of going off topic with talks of investing in shares etc. As said though, just put across what you can. Be realistic about the amount that you can save. Do you get paid weekly or monthly? Set up a weekly/monthly standing order from your current account to a savings account so it comes out automatically. That is what I do and I just treat it like a normal bill. Are you good at keeping control of your money or are you a spender? A regular savings account is a good option as these accounts are generally designed for you to fund the account on a monthly basis without regular access. Generally, the term lasts for 12 months so after 12 months of savings you would then get access to the funds along with a little bit of interest. I can't afford to save much but save what I can. If you are just starting off saving money and that is your priority then don't worry too much about interest rates. The way I look at it, interest is just a little bonus for me at the end of it. I want to save because I want to, not because of the interest rate. Don't get me wrong, interest is nice to have on top but personally that is more beneficial if you have a lot of money in the first place because then you want to get the most out of it.
> What works for me is having 2 savings account. A regular saver so I can put a set amount away each month and not get access to it otherwise I'll spend it! And a small amount that I put into an everyday access saver so if I ever need funds for emergencies or last minute purchases etc I can just dip into my normal access account and leave my regular saver well alone. There is different ways of doing it. Something like that may work for you.


lol, typical indian way of thinking!  I'm the same, i have 3 accounts, 1 current (keep a minimum float), 1 savings account (i can use in emergencies) and 1 ISA account that i don't take any money out of! :thumb:

The problem we savers have, it that the interest rates are so low, but due to inflation, real interest rates are likely negative, so you are still very likely to lose value (purchasing power) of your savings due to QE!


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## m1pui (Jul 24, 2009)

Interest rates might not be the best on ISA's at the minute but, given your age and the market, it's a prime time to start investing into one.

The obvious one, tax free, which means the more years you can shove your allowance in their, the more efficient it is.

Secondly, with a stocks and shares ISA, markets are relatively low. So you (for example) £500 per month can buy more units than they could in a more buoyant market which puts you (your ISA) in a great position as the markets pick up pace and you'll see bigger jumps on your investment when this happens.

Again, with your age, you're in a great position to invest for a medium-long term where you can ride out what might be a bit of a lull/dip and see some great returns on your money.

As has been said by others, a pension should be a priority when you can afford it too. Earlier you start the more you can build up. When you speak to an advisor and they show you the projections for them you'll be shocked at the difference a few years more saving could make on your pension figures. I know they're just illustrations and not guaranteed, but still.

EDIT:



kh904 said:


> The problem we savers have, it that the interest rates are so low, but due to inflation, real interest rates are likely negative, so you are still very likely to lose value (purchasing power) of your savings due to QE!


Exactly. Inflation is about 2.9%, so anything you're saving at an interest rate less than that is losing value.


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## kh904 (Dec 18, 2006)

m1pui said:


> Exactly. Inflation is about 2.9%, so anything you're saving at an interest rate less than that is losing value.


Yep, so being a typical asian, i buy gold  
I don't trust the official inflation figures. Independent figures show it higher! They conveniently don't include some things!

I personally don't own any shares as i think the stock market is being propped up by the central banks (same goes for housing).

It's difficult for the OP, but a cash isa is his best bet and move it after a year to get a better deal.


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## Exotica (Feb 27, 2006)

Forget premium bonds, ok you might get lucky but am seeing poor returns after I gave them a go. I've the full 30k allowance and for the last six months been receiving 2x £25 a month.


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## robertdon777 (Nov 3, 2005)

Right - Ask yourself want you want to purchase in the near future - Maybe 5-10 years.

Likely to be a house, so to get a decent mortgage you will need 20% deposit.

Look at the house prices you fancy buying and start to save 20% of that. (house will go up in value most probably)

But that is a big ask to save for a young person (usually with an active social life etc.) Doing the maths on averages.

Average house price 170K, 20% = 34K divided by 5 years saving = 6.8K per year to save = 566 per month. (will build interest over 5 years but probably wiped out by house price increase)

Above is a simple average example and figures would change drastically sepending on prices/years saved etc.

Just work out what you're saving for first, no point saving if you don't spend it on something.


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## Bill58 (Jul 5, 2010)

LloydsTSB have a Current account which pays 3.00% AER on your balance up to £5000. To get interest paid each month, all you need to do is:
pay at least £1,000 into your account during the calendar month, and
keep your account in credit during the monthly billing period.


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## alan hanson (May 21, 2008)

i'd say save what you can but also at 18 enjoy it also, as when mortgage/kids time comes if that's what you want the time will most likely have passed.

Your 18 and fair play for even thinking about it but dont skip the next 3-4 years sitting on all your money get out there and experience the world you never know how much of a difference that can make in future financial calls for you


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## robertdon777 (Nov 3, 2005)

Good advice above, save a bit, enjoy your life first - don't break your back trying to save every last penny only to miss out on living.

Who knows you may meet a rich partner when you're out partying!


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## furby-123 (Dec 3, 2011)

what i do is basically put away 1 days wage per week, then when the next pay check clears what ever if any is left over from the week before i throw it into savings aswel.


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## ChuckH (Nov 23, 2006)

Whilst I would still encourge young ones to save it should be noted that interest rates are so low that money saved will at this time actually loose money... Inflation is eating away at our savings faster than interest will top it up...

Save for your future yes but be aware your money will in a year have less buying power and actually be worth less than it is today... Sobering thought eh ....

Those of us who have saved all our lives are loosing our savings a bit at a time ...

The risk factor of shares is IMHO only worth taking IF you can afford to loose your precious money...........


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## m1pui (Jul 24, 2009)

ChuckH said:


> Whilst I would still encourge young ones to save it should be noted that interest rates are so low that money saved will at this time actually loose money... Inflation is eating away at our savings faster than interest will top it up...
> 
> Save for your future yes but be aware your money will in a year have less buying power and actually be worth less than it is today... Sobering thought eh ....
> 
> ...


But by keeping it "under the bed" it accrues absolutely zero interest and spending it, unless you're fortunate enough to buy something that appreciates in value, will lose you even more money again.


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## Andyg_TSi (Sep 6, 2013)

EAN8 said:


> I am 18 and am a apprentice mechanic and want to start to put money away into my savings but I want to know what is a good amount to have in my savings account?


How much can you afford to put away, and are you thinking long term savings (for a house deposit) or another big purchase?

If you are, I'm going to suggest taking out an Endowment Policy, with 'say' the CIS

Endowment policies as a rule of thumb, usually double in value over the term they are taken out. People took out Endowment mortgages in the past, the idea was you paid into the endowment policy to bring you enough profit to pay off the capital you borrowed, while paying the interest only on the loan. When the endowment matured, the figure paid out would pay off the capital borrowed.

In my case, I took out a small endowment policy 20 years ago, aged 20. I've been paying £22.22 per month for 20 years. I have paid £5,300 in over 20 years.

The policy is maturing on 1st October 2013, and I'm due a pay out of £9,800, so I've earned £4,500 interest in 20 years on a £5,300 principle investment.

as you are 18, you could take out a 10 year endowment policy at a level you can afford and virtually double your money. Plus this is a commitment for the term and you cannot take out of it.

IF you could afford to pay in £83.33 a month (£1K per year) that's a £10K endowment policy, which could be paying you out nearly £20K when you are 28.

£20K is a healthy deposit for a house!


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## ChuckH (Nov 23, 2006)

m1pui said:


> But by keeping it "under the bed" it accrues absolutely zero interest and spending it, unless you're fortunate enough to buy something that appreciates in value, will lose you even more money again.


No.... Really ?.................

What I meant was dont expect your money to gain anything ! At current rates it WILL loose !

This does not mean saving for something like a car or a deposit on a house is not a good idea cos of course it is !!

But for the first time in modern times saving money is actually costing the saver....

Who said anything about putting it under the bed


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## ChuckH (Nov 23, 2006)

Andyg_TSi said:


> How much can you afford to put away, and are you thinking long term savings (for a house deposit) or another big purchase?
> 
> If you are, I'm going to suggest taking out an Endowment Policy, with 'say' the CIS
> 
> ...


Endowment ?? You are joking ? Do you realise how many have got to the end of an endowment mortgage to be left with a shortfall ?

These policys are complex and money is usually tied up and is at huge risk ...


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## spursfan (Aug 4, 2009)

Being well old and all that, only bit of advice I can give is to save as much as you can afford without spoiling your youth so to speak, enjoy life but remember, you will get older and as time goes by you will thank yourself that you have started saving early. wish I had started when I was your age, I may have been in a better position than I am in now.

Kev, a very young at heart 50 ish:thumb:


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## ColinEhm1 (Sep 5, 2013)

I'm 19 and a apprentice mechanic also mate on £5.30 a hour but its ment to go to £6.30 this week I put £20 in my own saving but then my mum takes £55 out a week £30 to the car and £25 towards insurance but my insurance is only going to be £300-£400 in November and having been saving for it since last November so will have money left over which ill leave in and then move it to £70 a week, also trying to stop smoking just now so will be moving it for £20 to £50 into my savings, set up a standing order to a saving account so money goes straight into it when you get paid and make sure its a non accessible one till a certain time so you don't dip into it mate


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## m1pui (Jul 24, 2009)

ChuckH said:


> No.... Really ?.................
> 
> What I meant was dont expect your money to gain anything ! At current rates it WILL loose !
> 
> ...


But current interest rate, as low as it is, is not lower than zero rate..

Surely you understood my using the metaphorical term of "under the bed" savings?

You're pointing out that saving it at the low interest rates of the bank are losing money, but still encouraging them to save, then, assuming you're not classing investment policies such as ISA type funds as saving in banks, saving at home is going to be the other option.


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## Andyg_TSi (Sep 6, 2013)

ChuckH said:


> Endowment ?? You are joking ? Do you realise how many have got to the end of an endowment mortgage to be left with a shortfall ?
> 
> These policys are complex and money is usually tied up and is at huge risk ...


No, I am not joking. please re-read what I wrote. I am fully aware of the pitfalls of endowment mortgages

I am talking about using an Endowment principally as a savings policy.

The policy I have been paying into for the past 20 years was a £5000 'sum assured' with profits policy.

when marketed, similar policies maturing 20 years ago were returning £30 - £40K profits.
However as I said and I shall put it in bold so you can get the bit I was highlighting

*as a general 'rule of thumb' endowment policies usually double in value over the term - EG return double the 'sum assured' *

put £100 a month away into an savings account for 10 years and earn 0.3% interest
or
buy an endowment *as a savings policy* and as a minimum double your investment

as said, I've just been informed I'm getting back more or less double what I've put in mine on maturity in 3 weeks time. That's hardly a poor performance for *a savings policy*

the problem with endowment mortgages was people were sold them on the basis they would get 300% - 500% returns, which was diabolical as those type of returns required year on year growth from the stockmarket the money is invested in.
If the bottom falls out of the stocks & shares then you don't get the return forcasted, which is why people were left with shortfalls and unable to pay off the capitol element of their mortgage.


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## ChuckH (Nov 23, 2006)

m1pui said:


> But current interest rate, as low as it is, is not lower than zero rate..
> 
> Surely you understood my using the metaphorical term of "under the bed" savings?
> 
> You're pointing out that saving it at the low interest rates of the bank are losing money, but still encouraging them to save, then, assuming you're not classing investment policies such as ISA type funds as saving in banks, saving at home is going to be the other option.


Lets start again..

I woul;d encourage a young person to save.. Otherwise how can they have a fund to fall back on or a sum to put towards say a house deposit in the future..

My point on rates is simple... Current rates are not even keeping funds safe in so much as approximately each 100 pouds saved will be worth roughly 97 quid in a years time..

Saving at home means no interest at all. Obviously this is a daft option.. Little as rates are there is just that tint tiny amount to offset inflation

Current rates are not encouraging folk to save....

Endowment policy's once seen as a huge gain have landed many people in the mire.. Just google and read...

To the OP... Save what you can.. No little is to little and no large amount is to great.. Just be aware you will loose some of that amount unless interest rates go up....


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