If you are among the young adult in your 20s or early 30s, it's natural to want to live in the moment and enjoy the present. However, it's also important to think about the future and start planning for your financial goals. Saving is a powerful habit that can especially be beneficial to master in your 20s, as it can set you up for a strong financial foundation as you get older.

However, it's also crucial not to neglect your wider money-making opportunities in the process. This is especially the time when you have the potential to explore and seize new financial opportunities, and it's important to consider all of your options and not limit yourself to just one source of income, regardless of your age.

How Much is Enough?

A good starting point  is to aim to save at least 20% of their income, which can be adjusted based on individual circumstances and financial goals. According to a recent survey, the average savings for a 18 to 24-year-olds in the UK is around £2,533 and for 25 to 34-year-olds, it's £4,775. However, it's important to remember that everyone's financial situation is different, and there's no one-size-fits-all approach to saving. In fact, another study says that 42% of young adults aged 16-24 in the UK have no savings at all, with 36% citing unexpected expenses as the main reason. If you're not in a position to save 20% of your income right now, that's okay. The most important thing is to start saving something, even if it's just a small amount each month. You can also look for ways to increase your income, such as by taking on a side hustle or negotiating a raise at work.

Here are some tips and strategies for young adults in their 20s who are looking to start saving:‍

1. Set specific, achievable goals:  According to a survey by the Money and Pensions Service, young adults aged 18-34 are more likely to save for a specific goal, such as a holiday or a new car, than for a rainy day fund or retirement. However, it's important to remember that saving for the future is just as important as saving for short-term goals. One of the most effective ways to stay motivated and on track with your savings is to set specific, achievable goals for both short and long-term objectives. For example, instead of just saying "I want to save more money", you could say "I want to save £500 for a weekend getaway in the next six months, and £5000 for my pension in the next five years". This will give you a clear target to work towards and help you stay focused on both your present and future financial needs

2. Start small and gradually increase: If you're new to saving, it can be helpful to start small and gradually increase your contributions over time. For example, you could start by saving £20 per week and then increase it to £30 or £40 as you become more comfortable. This will help you build momentum and make saving a part of your everyday life.‍

3. Automate your savings: Another way to make saving easier is to automate the process. You can set up a direct debit to transfer a certain amount of money into your savings account every month, or you could use an app or online tool to round up your purchases and transfer the difference into your savings. This will help you stick to your budget and make saving a habit.‍

4. Prioritize your expenses: One of the most important things you can do when it comes to saving is to prioritize your expenses. This means making sure you're spending your money on the things that are most important to you and cutting back on the things that aren't. For example, you could try cooking at home more often instead of eating out, or you could cancel subscriptions or memberships that you're not using. According to a survey by the Money Advice Service, the average 18 to 24-year-old in the UK spends £124 per month on takeaways and eating out, and £57 per month on subscriptions and memberships. By cutting back expenses like these, you could potentially save hundreds of pounds each year.

5. Financial Literacy for a Stronger Future: Investing in your financial education is one of the best ways to ensure that you make smart choices with your money. According to a survey by the Financial Conduct Authority, only 51% of adults aged 18-34 feel confident in their understanding of financial matters. This highlights the need for young adults to take the time to learn about personal finance and develop their financial literacy skills. There are many resources available to help you improve your financial knowledge, such as books, online courses, and financial podcasts. By educating yourself, you'll be better equipped to make informed decisions about saving, investing, and managing your money. This, in turn, will help you achieve your financial goals and build a strong financial foundation for the future.

6. Don't be afraid to experiment: Finally, it's important to remember that everyone's financial situation is different, and there's no one-size-fits-all approach to saving. What works for someone else might not work for you, and that's okay. The important thing is to find a system that works for you and your unique circumstances. So don't be afraid to experiment and try new things - you might be surprised at what you're capable of.

7. Make your money work for you: In addition to saving, it's also important to consider ways to make your money work for you. For example, you could look into investing in stocks, bonds, or property. Or, you could consider opening a high-interest current account, which can be a great way to grow your savings and make the most of your money. As a fintech firm that is soon to launch, we are excited to offer high-interest rates on current accounts in the UK. This can be a great option for young adults who are looking to make their money work for them.

In conclusion, saving is an important part of financial planning, and it's never too early to start. Whether you're saving for a specific goal or just want to have a safety net in case of unexpected expenses, the key is to find a system that works for you and your unique circumstances. And remember, everyone has their own timeline - if you're not in a position to save right now, that's okay. There's always tomorrow!

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