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Our 7-point plan can help put you on the road to financial freedom, so you could live the life you want in years to come without compromising too much on your lifestyle today.
The first step towards finding extra money to put away for the future is to track your spending. Look at what you spend on bills and household expenses, food and fun to see if you can spot ways to save.
Whether it’s finding a better deal on your rent, mortgage or utilities, cutting your weekly shop or cancelling unwanted subscriptions, there are simple ways to reduce your essential costs.
If working from home is an option, doing so more often could save you money – as many people have already discovered. And if you do commute, swapping trains and buses for walking or cycling, where possible, can make a big difference.
Whatever ways you find to save, remember even small amounts add up. For example:
Our tools and budget calculators can help you get started:
You don’t need to be told that making coffee or lunch at home is cheaper than buying it out. But there’s no need to sacrifice all the things you enjoy to achieve the future you want. Far from it.
Spending more mindfully could make a real difference to your future lifestyle. So, beyond the essentials, aim to put your money towards things and experiences that really mean something to you.
And, remember, cheaper isn’t always best. If you spend a little more on things like clothes, furniture and household items that stand the test of time, it could end up costing you less in the end. Plus, it’s better for the environment.
Setting aside any money you save – either in a savings or investment account, or a pension – could also mean you can enjoy more of the things you love in the future.
Explore: Mindful spending
Remember the flight attendant line about putting on your own oxygen mask first? Well, it’s the same with savings. Setting up Direct Debits or standing orders to pay bills is the norm. So, why not make paying yourself a priority too?
By setting up a standing order for your savings to go out on the day you get paid, you’ll be doing yourself a big favour in the future. And you shouldn’t notice a big change day to day.
You can open a savings account from as little as £1 (eligibility criteria apply). Depending on how much you set aside, you’ll soon get used to having a bit less to spend every month. And you’ll be surprised how quickly your savings start to build up.
You may have short term or long term goals you’re wanting to achieve, such as paying off your mortgage, or doing some home improvements to future proof your current home.
Deciding what you want to save for, how much you need to save, and a date for when you want to have the money by can help you create a plan of action. Using our savings goal calculator for help creating a timeline.
Paying into a pension may feel like the last thing on your mind if you’re struggling to pay the bills. But you’re never too young to start saving for life after work. And it’s important to remember that the money you put away now could be worth so much more in the future.
Pensions offer tax advantages over other forms of savings. If you’re lucky enough to be auto-enrolled into a workplace pension or have chosen to take advantage of your employer’s scheme, you’ll already be benefitting. That’s because both you and your employer will be paying into your pension.
Your employer may encourage you to pay more than the minimum by matching your contributions. If so, whatever extra you put in, they’ll contribute the same, up to a certain amount. This is effectively ‘free’ money. So, if this benefit is available to you, consider contributing as much as you can.
If you’re self-employed or don’t want to solely rely on your workplace pension, you can set one up yourself. There are a wide range of pension providers and options to choose from.
Investing offers your money more potential to grow and could be a way to make it work harder. To get an idea of what your money might be worth in years to come, try our investment calculator. Just remember that investments can go down and up, so you could get back less than you invest.
Your money’s not locked away – you can access your investment if you need to. However, you should see investing as a longer-term option for your money and plan to leave it invested for at least 5 years. This gives it the chance to recover from any dips in the market.
It’s a good idea to have an emergency fund of around 6 months’ living costs in place before you begin. That way if you lose your job or get an unexpected bill, you shouldn’t have to dip into your investment.
If you’re new to investing, we can show you where to begin. And it doesn’t cost much to get started. With HSBC, you can invest with £50 per month. Eligibility criteria and fees apply.
The future can always feel uncertain. Most of us don’t know what we'll want to be doing in 10, 20 or 30 years’ time.
By starting as early as you can, finding ways to put money aside and contributing regularly, you can give yourself more options for a financially-secure future.
Whatever you dream of doing some day – be it cutting back on paid work, becoming your own boss or seeing the world – the sooner you act, the more freedom you could have.
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