When you consider the global pension crisis and the personal debt mountain that still plagues households in the UK, it is hard to imagine a time when the need to save money was so pressing. Despite this, however, a lack of long-term employment opportunities and dwindling levels of disposable income are making it extremely difficult for citizens to create long-term savings.
While the Great Recession and its impact may have made it more difficult for the current generation of young adults to save, however, there are wider issues that are of far greater concern. Take the lack of financial literacy, for example, which underpins the reckless attitude to spending and threatens to derail the British economies long-term future.
How to Change your Attitude to Money: 3 Practical Steps
For many young adults who have already accrued a certain level of debt, the need to save is even more pressing. With this in mind, what practical steps can you take to change your philosophy and prioritize financial savings? Consider the following: –
- Develop a Clear Understanding of your Financial Circumstances
For individuals who have a low income or are only able to work sporadically, there is a temptation to abandon any attempts to save money without fully appraising the situation. This may be a flawed outlook, however, as without a comprehensive understanding of your own financial circumstances it is impossible to make an informed decision. To gain this comprehension, it is wise to create an up to date budget that includes both monthly income and outgoings, before using this data to calculate an estimated amount of disposable income. The same thought process should be applied when considering whether or not to take out a secured or unsecured personal loan, as these short-term financial products are only purposeful when used responsibly and according to specific criteria.
- Become a Stickler for Detail
When it comes to making financial decisions, even the smallest details can have a considerable impact. It is therefore your duty to adopt a more considered approach to your personal finances, and ensure that each decision is taken with a broad scope of information in mind. In terms of savings, your first step should be to evaluate the best national banks, and compare the types of account and individual interest rates that they offer. There is a wide range of financial products available on the market, each of which carries a variable minimum deposit and different rules concerning withdrawals. While this choice can be overwhelming, it also enables you to choose an account option that perfectly suits your needs.
- Adopt a Long Term Savings Outlook
Technological advancement has ensured that everyday tasks and activities can be performed quicker than ever, and while this has been largely beneficial it has also created an element of impatience among young adults. Such a short term outlook is not suited to cultivating savings, however, as it is necessary for you to consider your future while establishing a genuine motivation to retain as much of your hard earned capital as possible. Once you begin to accrue savings and build towards a set goal, you can begin to visualize the rewards and make viable future plans. As you achieve success and see the fruits of your labour, then the philosophy of saving money is far more likely to become engrained in your psyche.