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Why “Save Money” is the Most Important Advice of your 20s

I recently came to an important realisation that I want to pass on. It’s linked to the old adage that you’ve probably heard before:

“When you’re young, you have time and energy, but no money. When you’re middle-aged, you have money and energy, but no time. And when you’re elderly and finally have time and money, you no longer have any energy.”

         Despite how long ago I may have started this blog, I still consider myself firmly in the first category of ‘young’ (!) and I definitely agree that money is the main barrier to most things that my friends and I desire to do in our youth. We’re still commitment-free and conscious of how much freedom and flexibility we have at this (pre-children) stage of our lives. But we’re also an impatient generation, who aren’t convinced that waiting decades is the best recipe to the long-awaited treasure troves promised in the proverb above.

         ln light of all this, my key realisation was this: I owe so much to my younger self for starting to save money early! My ability to take a 6-month unpaid sabbatical from work in 2016 and to now spend 2 years studying for a Master’s degree is the direct result of lots of little actions I took over the last 4 years, saving up little pots of my salary and not frittering it all away on pay day sprees. I can only praise my younger self for her infinite wisdom of managing to save all that money!

        Back when I first graduated in 2012, lots of grown-ups around me (read: my parents and aunt) warned me about the importance of saving early for retirement and opening a pension pot, etc. But now I realise that the real wisdom was not in saving for my retirement (in a zillion years’ time), but in saving money to give me freedom of choice now, while I’m still in my youth.

         During the 4 years I worked in between my two degrees, I managed to save the equivalent of 30% of my salary (aside from the pension contributions that I can’t touch for a zillion years). That 30% came mainly from: (1) religiously putting aside some of my salary every month, (2) transferring my annual company bonuses straight into savings accounts without spending a penny, (3) payments for blog-related work and competitions outside of my main job, (4) living in a free company flat in Madrid for 6 months and transferring the equivalent of my London rent into savings rather than spending the extra cash, (5) spending very little on my main hobby (travel) thanks to seizing opportunities to travel for free through my blog.

(For more details, see my 2015 blog post: How To Find Money for Travel (& the Secret Behind How I Afford to Travel So Much))

        Little did I know at the time what exactly I was saving money for. The typical thing to save for in your 20s is a house deposit, and I did spend about half of my savings on buying a flat with my sister in 2015. But I wouldn’t advise spending all your savings on property, as you’re then left obligated to work eternally to pay off the mortgage for said property and you can never afford to be salary-less. A financial advisor once gave me a golden nugget of advice: he told me never to put all my assets in one place, and to instead diversify the risk. I.e. to spend half my savings on an investment like property, and keep the other half for a rainy day or another future opportunity. And based on the path my life has taken since 2016, I would seriously recommend that approach to everyone else!

          If I hadn’t been saving up over several years for a rainy day, then I would still now be sitting at my desk in London, working in an unfulfilling job, complaining at the lack of travel involved, lamenting my annual leave restrictions and always dreaming of the greener grass on the other side. But I actually don’t regret any part of the 4 years I spent working at that company, as it’s that very job that allowed me to save up money and therefore afford to pursue two of the very best decisions of my 20s: to take a sabbatical and to do a Master’s degree. I was recently asked by a few readers about how to fund a Master’s degree and it reminded me of how ridiculously grateful I am to my younger self for saving up so diligently, as I know that not everyone is lucky enough to have received the same advice about saving that I received from my parents and that financial advisor.

         Financial advice is definitely a topic that isn’t discussed enough in the context of millennials. One brilliant UK-based blog I’ve followed for a number of years is Iona Bain’s Young Money Blog and basically everything I know about money has come straight from her!

          It’s also been a long time since I blogged about money – which is obviously a pretty essential requirement for most travel! As I’m currently a student, I spend even more time and effort than before on seeking out the cheapest flights, calculating airmiles and not getting ripped off when I travel (and I’ve recently been to Norway for goodness sake, so I know a thing or two about needing to budget!). So I have a few other money-orientated posts coming up in the near future: one full of tips to save money on travel, and one on how to finance a Master’s degree. Is there anything else money-related you’d like to read blog posts on?

What’s your opinion on that quote about time, energy and money at the different stages of our lives? Do you agree with it, or do you think it’s outdated in the current financial climate? What would be your golden nugget of advice for your 20s?

10 Comments »

  1. Good advice as ever VST 🙂 Good fortune and circumstance can play a big part too of course. Many people currently don’t receive number (2), a bonus, almost all don’t have number (3), an income driving blog, and very few receive number (4), free lodging. But that’s what you had the opportunity to do so is a great way of demonstrating the range of options that can lead to savings. My housemate doesn’t even have option (1), save some of your salary, as it almost completely goes out on paying off his debts and he never has any money for number (5) anyway, travel 😦 So his circumstance means he’s unlikely to have any savings anytime soon and certainly never any to raise a deposit to buy his own house or to invest sadly

    Liked by 1 person

    • Yes I completely agree, good fortune are very much a part of it, and I’ve had quite a few lucky strokes along the way to allow me to save. I still thing that something can be done to put away some savings, even if very little, and I hope for your housemate that he manages to get together a deposit some how, and receives a few strokes of luck himself too!

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  2. Completely agree, saving for now is as important as saving for the future. I saved to go freelance as well as buying a house, which enabled me to buy a house my first year freelance when I was earning less than I’d earned in years. Money isn’t everything but it certainly gives you more choices in life and weighing up spending now, saving for soon and saving for when we’re old is hard but makes such a difference if you get it right. x

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    • I’m glad you agree Jen, and I have to admit that I’m so impressed that you’ve managed to buy property just after going freelance – which must have been even more challenging than for the rest of the salaried majority! Congratulations on managing to save up and I’m glad it’s going well for you!

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  3. The best thing I ever did in my twenties and thirties was save at least 20% of my salary. I have never had a huge salary but now that I’m in my early 50s I can do whatever I want including stopping working completely. Virginia, your advice is great. Always save your bonuses and raises, and reinvest dividends and interest received.

    The only debt we’ve ever taken on was for the property we live in. In hindsight, I should have bought some rental properties. Property values nearly always increase over the long term. Having renters pay your mortgage is awesome.

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  4. That quote definitely rings true, though as you say if you make a concentrated effort to squirrel some money away into your savings regularly, you can have the trio. As I’m currently living in France and my expenditure is lower, I’m able to put more money away at the moment than I think I would be able to in the UK; once I’m back in the UK, those savings will be put aside. I agree to some extent with living in the present and seizing opportunities (be that travel or otherwise), but equally see the importance of putting some money aside, as you never know what the future holds. Out of interest, do you think your post on funding a Masters will be location-specific (i.e. completing one in Europe, not the UK) or not?

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    • Hi Rosie, thank you and I’m glad you agree and are finding it easy to save at the moment while your French living costs are lower – it’s definitely a good decision. And the blog post on funding a Master’s (which is late but just around the corner!) will cover both Master’s in the UK and elsewhere in Europe. I hope it’s of use, so keep an eye out!

      Liked by 1 person

      • I think paying less for rent here really helps on the saving front. If I end up moving to London after this stint in France I imagine a large chunk of my salary will be obliterated by the exorbitant cost of rent! Thanks for that, I’ll be sure to keep an eye out 🙂

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