Have you left it too late to start saving?

You’ve spent your twenties (and maybe your thirties) going travelling, eating out and going out whenever you feel like it. And although you should have more than enough to get by, you never have money left over at the end of the month. Saving’s never been a priority, and you’ve always put it off until you start being ‘sensible.’

Or maybe you’ve struggled to make ends meet on your salary, and there’s never been any room in your budget for savings. You’ve told yourself you’ll start saving when you make more money. But even if your salary’s grown, it still hasn’t felt like enough.

Either way, the longer you put it off, the harder and more hopeless it feels to start saving from scratch.

If this sounds familiar, rest assured you’re not alone! More than half of 22 to 29 year-olds say they have no savings at all.

But what happens when you want to start thinking about the future? Maybe you want to buy a house. Maybe you’re worried about what you’ll live on when you retire. Or maybe you just want the security of having some money tucked away if you need it. Have you really left it too late to save?

We think it’s never too late. So we’ve put together some tips to help you get started.

Before you start setting goals, you need to know how much money you have to play with. That means you need to create a household budget. This sets out how much you earn and spend on a regular basis. You can free up money for your savings by adjusting what you plan to spend.

If you’ve never touched a budget before, chances are you’re spending money on stuff you don’t need. That’s kind of a good thing, because these are the easiest costs to cut! If you use Monzo, try setting a monthly budget to track your spending and stick to your goals.

Need help controlling your spending and sticking to your savings goals?

You may have to cut down on luxuries and make big changes, like moving somewhere that’s cheaper to live. Remember, you might have been able to live the way you have been because you’ve not been saving. If you want to change that, you might need to make some compromises.

Next, work out if you’re saving enough to reach your goal. Not sure how much you need? Here’s a guideline for two common savings goals:

Retirement – a rough rule of thumb is to take the age you start saving for retirement and divide that number by two. This is the percentage of your salary before tax that you should save each year until you stop working. Read our guide on pensions to learn more about how much to save for retirement.

House deposit – you normally need a deposit of at least 5% of the property price to get a mortgage. And you might need more if lenders think you’re a high risk customer – for example, if you have an irregular income or you want a buy-to-let mortgage. You also need a larger deposit if you want a lower interest rate on your monthly mortgage payments.

Is your goal still out of reach? See if there are any more costs you’re willing to cut.

If things still aren’t adding up, you could also try moving the goalposts. It sounds like cheating, but it’s simply changing your expectations to make them more realistic.

For example, you might need to think twice if you’re aiming to buy a four-bed property in London. You could reduce the amount you need for a deposit by:

You should also rethink your expectations for retirement. We might all want to be sipping martinis on a cruise by the time we’re 50 – but you may need to work for longer and lead a more affordable lifestyle.

Does your goal still feel like it’s ages away? Here are five ways you can try to catch up:

Why not ask for a pay rise, look for a better paying job, or get a second job on the side? You can even add to your earnings by selling stuff online.

Most employees are entitled to a workplace pension, which your employer must pay into when you do. From April 2019, employers need to contribute a minimum of 3% of your pre-tax earnings between £5,876 and £45,000.

You can often choose how you want to invest your pension money. Shares are normally more risky than bonds and cash, but they can also increase more in value. It’s common for people to take bigger risks with their pension when they’re still a long way from retirement, as this gives you more time to ride out the ups and downs of the stock market.

It’s often worth saving into a pension for your retirement as you can get income tax back on money you pay into it. The government will also boost savings in a Lifetime ISA by 25%, which you can use to buy a house or fund your retirement. (Just remember there are limits to how and when you can withdraw money from a Lifetime ISA.)

It’s important to find the right type of savings account for your needs. The higher the interest rate, the faster your money should grow. Consider a fixed account, which typically offers a higher interest rate for locking your money away for a year or more.

Create a zero-sum budget. This is a good way to ensure you aren’t wasting money, as it forces you to give a purpose to every pound you earn.

Try piggybanking. This is a money management technique that can help control your spending. It involves setting up multiple piggy banks (like bank accounts or Monzo Pots), splitting your money between them, and using them for different purposes (like bills, groceries or having fun).

Separate your savings from spending money with Pots. You can schedule payments into and out of Pots, give them a savings goal, and even lock them to avoid temptation. Download Monzo to try it.

Find your saving style. If you want to keep saving, you need to make it a way of life. Work out what motivates you and how to include budgeting in your everyday routine.

Consider paying off expensive debt first. High interest rates drain money that you could put into savings instead. Think about reducing or consolidating your debt to help you save more efficiently.

Monzo makes it easy to set savings goals and track your spending 💪