Top tips for saving

Money that is left to spend after all other expenditures have been paid is commonly known as disposable income. It’s easy to get carried away and spend this, but it’s important to think about saving this money for something in the future, such as a new phone or a car.

This activity helps you and your child discuss how easy they find it to manage their disposable income and if they would be able to identify everything they have spent money on at the end of each week.

Start by reading through this blog with your child about two young people’s challenges and tips on managing money.

For your child to work within a budget, it’s useful for them to know their own spending habits and where their money goes – particularly the small amounts. Get them to think about what they spend their money on in an average week. This may include snacks, a mobile phone contract, bus tickets, music streaming services or clothes – they can add this into the weekly spending diary on worksheet three.

Explain to your child that it’s a good idea to use a spending diary for a few weeks, especially when circumstances like starting a new job or going to university have changed. It will help them identify their spending habits and areas they could save money.

To help them live within their income and keep to the budgets they have set themselves, they need to consider where they can save money in case something unexpected comes up that they need money for. This takes practice and discipline, especially when living independently for the first time.

Work through the 34 Ways to Save interactive tool with your child. This will give them ideas for how to save money across all areas of their life so they can become a savings master.

You may have other tips you can share with each other. Our tops tips include:

·      Save regularly, even if it’s only a small amount

·       Put loose change into a jar and bank it every three months

·       Shop around for best deals – comparison websites are useful for this

·       Look into season tickets or railcard discounts to get the best deal on travel

·       Transfer a regular amount into savings as soon as they get paid

·       Bring a packed lunch instead of buying it

·       Make sure they know the monthly allowances of their phone contract so they don’t go over them

Finally, why not set a saving target with your child and work together to plan how it can be achieved? This could be saving up for a new games console, tickets to a music gig or a trip away with friends. Making it fun and achievable will be more of an incentive to save.