Money Tips for Teens - Saving for now

Saving for now

• How to start saving

  If you are saving for a big purchase like an iPad, tablet or new mobile phone it’s important to know what your goal is, how you are going to reach it and how long you think it will take.

  How you save and where will depend on your individual circumstances, such as how much you are looking to save and whether you need to access your money at any time.

  There are different ways you can start saving money. You could simply put loose change in a jar, or you could ask an adult to help you open a suitable bank account which are offered by most banks and building societies.

  If your savings are more long term you could ask your parent/guardian to look at opening a Junior Individual Savings Account (‘JISA’) on your behalf. See our jargon buster for more info on Junior ISAs.

  In most cases an adult will need to help you open a bank or savings account on your behalf. Once you have explored your options, and even if you find an account you can open for yourself, it’s a good idea to discuss this with your parent/guardian first.

• Short term goals
  Your short-term goals are the savings goals that you want to reach fairly soon or within a year or so. For example, this could mean saving money to spend on holiday or for Christmas which can both be expensive. When saving for your short-term goals make sure you are saving enough each month to reach your target. If you are saving up to buy a specific item then set yourself a deadline to reach the target amount and review this on a regular basis to ensure your savings are on track.
• Current accounts and savings accounts – what’s the difference?

  The main difference between a current account and a savings account is that a current account offers an instant way to access your money whereas savings accounts are designed to help you save and your money may not always be immediately accessible.

  Current accounts are bank accounts designed for everyday use. When you start working your salary will normally be paid into a current account. A current account can also be used to make regular payments, such as monthly payments for mobile phone contracts, or to transfer your money to other account holders.

  Savings accounts are where you can save money on a regular basis and will usually pay interest. See our Jargon Buster for more information about interest. It’s a good way to make your cash work harder than it might do in a current account. Savings accounts may only allow a limited number of withdrawals and you won’t be able to pay direct debits or money to other account holders directly from a savings account. The interest rates on savings accounts will vary according to the type of account you choose.

  Before you decide which current or saving accounts suits your needs it’s best to do your research and discuss with an adult to ensure you’re making the right decision.

• Save change now - bank later
  Putting your loose change into a jar can be a great way to save money and it’s something that once you start will become second nature. Once you have saved a reasonable amount of money you can then take it to the bank or building society to deposit it into your account where it may earn interest.
• Consider opening an account which offers a reward scheme
  Some savings accounts offer cashback or other rewards for opening them to help you grow your savings. Different banks and building societies offer many different reward schemes, shop around to make sure you get a deal and one that fits in with your savings goals.
• Cutting back

  If you’re trying to save for a big purchase like a laptop or mobile phone then you may want to look at the ways you can reduce spending, so you can put more into your savings account.

  But that doesn’t mean life has to be boring! Think of ways you can still enjoy spending time with your friends that doesn’t cost a lot of money, such as finding free things to do in your local area or staying in to watch a film.

• Savvy shopper
  The internet has made it easier than ever to be a savvy shopper, you can compare the price of most things from Ipads, computer games, mobile phones, clothes and more. Spending a bit of time shopping around can help you get the best deal and help you save more money.
• Become a critical consumer
  Think about what you are buying and decide whether or not you really need it. Impulse shopping can be an easy trap to fall into, but it’s also one you can easily break. Next time you want something ask yourself if you really need it? If not, put the money you would have spent into your savings account to give it a boost.