At eighteen years old, it’s tempting to throw away the restrictions of childhood and enjoy your newfound freedom with wild abandon. But when it comes to your finances, it’s to your advantage to be disciplined and start saving as soon as you can.
So, what do you have to gain?
In this article, we’ll share five reasons to start saving when you turn eighteen.
1. To give yourself a safety net
If you don’t have savings during an emergency, you might feel like it’s impossible to manage.
You might not have had experience of this yet but it’s something you may well face in the future. As many as 10% of adults feel hopeless about their finances, according to research published by the Mental Health Foundation.
Savings give you a cushion to fall back on during hard times. They let you enjoy peace of mind should unexpected costs appear, helping you continue to get by.
2. To stay out of debt
Many young people make the mistake of using credit often. The power of compound interest can lead to outstanding balances growing huge in a short space of time, so it’s best to only use credit as a last resort or to build your credit history.
You shouldn’t ever need to use credit if you build your savings well enough. By exercising patience and self-control, you can pay for everything you need and wait until you have enough money to buy the things you want.
3. To build your future
The sooner you start saving towards your future, the better. Buying your first home and retiring from work may seem like a lifetime away, but it takes a surprisingly long time to build up enough money for these milestones.
Just like compound interest can make your credit grow faster, it can help boost your savings when you use a cash ISA. If you start saving early, then you’ll face less financial pressure later. Even if you aren’t saving with a specific goal in mind, it’ll open doors for you when you’re older.
4. To help others
If your own finances are secure, then you’re able to help the people around you. Maybe your loved ones are struggling for money. Or perhaps there’s a charitable cause you’ve always been passionate about? Helping other people is one of the most rewarding ways to use money – and it’s made possible by saving.
5. To have more fun
Saving doesn’t have to mean complete frugality. You just need to decide which things are most important to you and which you can do without. You can have anything, but you can’t have everything. If you cut down in non-essential areas like food and entertainment subscriptions, it could help you save for the things you enjoy more like new clothes or a big holiday.
From creating financial security to opening up your options, there are so many reasons to save. And the earlier you start the better!
