The advice I never got from my parents which I have given to my 18 year old son who has just finished school.
My parents never spoke to me about money, my bank offered me an overdraft when I was 16 and I’ve had one ever since. I don’t want history to repeat itself.
The Advice I Never Got
- Live below your means
- Once you get your first job, aim to save 20% of your net pay. There is no need to save more – life is for enjoying.
- Automate your savings – take the money you want to save out of your account on the day you get paid – it will stop you from spending it.
- Save up 3 months of living expenses and keep this in a deposit account to use as an emergency fund
- Avoid debt – if you want something that you can’t afford – save up for it
- The only debt worth having is a mortgage on a property
- Don’t buy a car or take holidays which leave you broke.
- Auto Enrol in your company’s pension scheme – if you start early the effect of compound interest should ensure you have a sizeable retirement fund
- Once you have got 3 months expenses saved, then buy a book on investment – open an account with an Investment Company that allows you to invest in stocks, bonds or funds and then save as much as you can.
- Make sure your savings are held in a tax efficient account. Here in the UK we have an ISA limit of £15,000pa (your doing well if you can hit this)
- Invest small amounts every month – trying to time the markets and invest larger amounts is a fools game.
- Dont put all your eggs in one basket. Invest in a spread of accounts, funds or stocks – it reduces risk.
- Though you might think that all this saving is pointless as you want things now – an account full of money when your 30 will result in a happier family life, than a cupboard full of out dated gadgets.
Don’t ever forget that your Dad loves you more than anyone else in the whole world – You can always call on me for help no matter what the problem or situation – I will never judge you.
What do you think about the advice that I never got – would you add anything to the mix ? (keeping it financial of course).