Everything they didn't teach you in school about how to save money

It’s year 10. You’ve just left a Geography class on how waterfalls are formed. Now you're on your way to Chemistry where you'll use a bunsen burner to look at alkali metal ions.

Clearly, you learn a lot of useful things at school. But what school sometimes doesn’t teach you are crucial life lessons on how to handle your finances. Like what an ISA even is, and how taxes actually work.

So we're here to break down some of life's most important money questions, the ones they didn't teach you in school.

Everyone knows saving is a sensible thing to do. It helps you prepare for your future and buy stuff you want. And means if something goes wrong, you're ready.

But it isn't always easy. In fact, 32% of people have less than £500 in savings and 41% have less than £1,000. More than half of 22 to 29 year-olds say they have no savings at all!

So, how do you actually save money? And where should you put your savings so you get the most out of them? Have you left it way too late to start saving from scratch?

If you haven’t started saving, don't panic! It's never too late to start.

You'll need to sit down and take a look at your spending, to work out how much you have to play with. It's usually helpful to create a budget, that sets out how much you earn and spend on a regular basis. Once you know that, you can work out what's left over and what you can cut out and put towards savings instead.

Then think about setting some (realistic!) goals for things you want to start saving for. It might be a holiday, a house deposit, or even getting ready for retirement.

We've put together a guide to saving from scratch here.

Interest is money you earn on your savings when you put them in the bank. We'll talk more about this later, but one of the most important things to keep in mind when thinking about your savings is the concept of compound interest.

It means that when you’re saving, any interest you earn can then earn interest itself. (And when you’re borrowing, any interest you owe can rack up interest too).

Compound interest means your savings will grow over time, so it's worth starting to save as soon as you can.

To have a chance at saving successfully, you need to use a method that suits you. Take account of your goals and your income, as well as what you're like. Then test out a few different options to find one that works.

Here are some ideas you might want to try:

Paying yourself first means as soon as you get paid, before you buy anything else, pay a portion of your salary into savings first.

You can remember to do this manually. Or if you use Monzo, set up a regular payment on the day you get paid to automatically move money into a Pot.

The 50-20-30 rule was coined by an American senator called Elizabeth Warren. The idea is to split your earnings so 50% goes on things you need, 30% on things you want and 20% on saving for the future (or repaying any debts).

It's a way to build saving into your budget and make it an integral part of how you use your income.

Little and often is one of the most realistic ways to save. If you build savings habits into your day-to-day, over time you should see the small amounts add up to something more significant.

You can use Monzo to save small amounts of money regularly by rounding up your purchases to the nearest pound and putting the spare change in a Pot.

Read our full guide to slow and steady saving with Monzo here.

If you need to get a handle on your spending, this is a good one for you. A 'zero-sum' budget means giving every pound you earn a purpose – whether that’s paying the bills, buying groceries or adding to your savings. The aim is to have no ‘extra’ money to fritter away on unnecessary stuff.

It can help you stop wasting money on unnecessary things, so you can put it towards savings instead. Find out exactly how it works here.

Turning saving into a challenge can help you stay motivated! And there are a few savings challenges that have gained cult followings.

From Kenya to America, people around the world are using the 52 Week Savings Challenge to build up their savings. Start by saving just £1 in the first week of the challenge. Then the next week, set aside £2. The week after, £3. And so on. By the end of the challenge, you’ll have saved £1,378!

The 1p Saving Challenge involves saving a little money every day, starting with 1p. The next day you save 2p, the day after 3p. After a year, you’ll be setting aside £3.65 on the final day and have a total of £667.95 in savings.

Not only is it an easy way to save, but if you manage to complete to whole 365 days' of saving, you'll have a tidy sum of £667.95 saved 😮

Using Monzo’s saving features are a great way to start saving.

Pots let you set money aside for different things. You can use them to work towards all your savings goals, big and small. And you can even lock them to avoid the temptation to dip in.

You can also earn interest on your savings through Monzo!

Read our full guide on all the ways you can use Monzo to save.

With the cost of household bills continuing to rise, there's never been a better time to try energy-saving! 

Turning down the heat in winter and putting on an extra layer can be a sure way to kick-start your energy-saving. It's also worth checking that your boiler is efficient and energy-saving.

According to Ofgem, the average household can save up to £300 on average on gas and electricity bills by switching energy tariff. And with more and more energy suppliers offering services, it's easier than ever to find a cheaper deal. 

Looking to switch energy providers? You can switch using Monzo. It’s hassle free, eco-friendly and could save you money on your bills. And you’ll get up to £75 credit when you switch. Open a Monzo bank account to get started or you can read more about it here. 

Find out more about how to switch energy suppliers. And read more about house to save on household bills.

Saving money on your weekly shop can make a big difference to how much money you can save overall.

Mysupermarket is a comparison website that can help you compare everything on your shopping list, to make sure you're getting the best deal. It includes big supermarkets like Tesco, Asda, Lidl, Waitrose, Morrisons and Sainsbury's, among others. 

Mysupermarket can also look at Superdrug, Amazon and Boots for things like toiletries. It even shows you alternatives that might be cheaper!

It can also be helpful to choose own brand products over branded or premium products, especially if you're doing a big shop for Christmas or a large event. 

Read our full guide on how to save money on food shopping here.

Managing your finances can help you save money, especially when it comes to transferring your debt.

If you're paying a large amount of interest on debt, you could consider transferring this onto a credit card with a 0% balance transfer deal. 

These typically offer a 0% interest rate for a fixed period. Keep in mind that there's usually a setup fee and you can end up with a higher interest rate if you're not debt-free before the 0% period ends.

Read more on how to get out of debt here.

Once you've started saving, you should find a good place to put your money. That's usually an account where your money will earn interest.

Interest is the cost of borrowing money. It makes lending worthwhile – after all, the lender can’t use their money while someone else is using it, and there may be a risk they won’t get it back.

When you put your money in a savings account, you’re effectively lending it to your bank. They’ll usually lend the money to other customers or invest it. That's why they pay you interest on your savings.

There are four main types of savings accounts: fixed rate bonds, regular savers, instant access savers and ISAs. Things like interest rates, how you can access your money, fees and risk can vary between the types. You can learn more about each type and how to pick between them here.

ISAs are particularly useful if you're saving towards a goal like buying a house or retirement. We've broken them down for you over here. And you can also open an ISA through Monzo!

When you're comparing different savings accounts, it's worth checking something called the AER (Annual Equivalent Rate). This reflects when interest is paid and how it’ll compound, as well as any compulsory fees. It’s shown as an annual percentage of the amount you’ll hold in the account, and makes it easier to see how different accounts stack up against each other.

For more tips and ideas on how to save money, join our Facebook community savers group Monzo Saving Squad!

Download Monzo to try these techniques for saving today.