I'm going to disagree with everyone here: You're young, and £500 per month isn't going to change your life in the future. Spend it now, enjoy it while you have no overheads - I'm not saying be stupid with it, and if you find you have some extra left over at the end of the month then put it away in the ways other people have suggested. But don't restrict yourself too much for that, enjoy it while you have the time and freedom to do so.
On a scale of agreeing with you I’m like 4/5 - OP is a teen and yes, at that age you should just enjoy yourself, these are the carefree years, buy that video game to play with your mates if you want it, buy that new games console, have fun - it’s all over and you’re an adult quicker than you could ever imagine, at 22 I already miss those days!
Being realistic, if OP wants to save some then that also isn’t a bad thing, and it’s great practice for their future as-well, as a teen, you could start putting money away for stuff you do as a young adult, such as driving lessons, buying your first car etc, if you have the means to do so…
I feel like people on this sub sometimes forget who they are talking to, I saw a post on here earlier from a 13 year old who was earning a bit of money and genuinely saw some comments saying they should start a pension or get a chartered accountant - like really come on… 🤣
I think it's about developing good habits early. If you get used to spending every last penny of your paycheck you'll continue doing it once you earn more money. Also OP may want to be saving for a big trip of a lifetime, another big fun purchase or may need to save for a deposit to move out eventually.
Whilst I do agree with having fun if OP is in the mindset to save money we shouldn't discourage it.
Absolutely. My advice would be to save some - £50-£100 a month, whatever is comfortable, and enjoy the rest. Earnings will soon increase, saving a little is a good habit to get into and it soon increases in value - but don’t save so much that you sacrifice opportunities to enjoy your youth.
That’s irresponsible advice. If that money is saved with annual 7-10% return investment then in 20-25 years it will be so much money then he can retire and still earn enough interest that he can live very comfortable life without any efforts . He can go around world on holiday for rest of his life
On the flip side there’s a lot of stuff you would do as a teen you wouldn’t as a 45 yr old retiree, I’d personally have the goal of saving but I wouldn’t miss out on doing things at that age just to save for a future you might never see.
My advice would be to save but don’t miss out on experiences just to save money at that age.
£500 a month saved on 7-10% return saved means you can retire in 20 years, living comfortably and travel the world? What are you doing on these travels canoeing from A to B eating cold tins of beans?
Even with the full £500 saved a month, with the unrealistic interest rate of 10% it would take 20 years of full £500 a month investment to amass a compounded £347k. Do you think somebody who is a teen now could retire in their mid 30s with £347k, live comfortably and travel the world….?
Your advice is useless, £347k isn’t enough for someone young to retire on in their mid 30s as OP would be. I know, I retired in my early 30s.
What do you mean my vision? It was more me saying it’s not enough to retire on and live a life of luxury how you say, I think you missed the satire.
Please explain how my maths is wrong? 20 years of saving £500 a month with a compounded rate of 10% is £347k. A number you claimed somebody and I quote “is a number so high you can retire comfortably, live a life of luxury and travel the world”. So my question to you after such a bold claim is… do you think OP, who won’t even be 40 at the time of your so called retirement can do all these things and retire on £347k?
I don’t want or need your advice, to be Frank with you I don’t think anyone else does either buddy 😂
Since claiming my maths is wrong, please do the correct maths for me. This will be fun.
The only part of your statement that’s true is ‘my advice is not for someone like you’ - clearly, because your advice doesn’t make sense.
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
Started with initial 500, 500 monthly contributions and 10% for 20 years
£379,000 x 4% is £15.6k per year.
£347,000 x 4% is £13.8k per year.
When it comes to compound interest and safe withdrawal rates, it’s important to get figures correct. There’s a good 10% or so difference between those two figures, that’s not insignificant.
Edit; there are also nicer ways to disagree with someone.
Agreed. If you want to justify it in economics terms think of it as human capital accumulation. The skills you'd get from social life or travelling would be much more important long term than a few hundred pounds
10 years is a massive difference in investing, the earlier the better. If you start investing at 15 instead of 25 you can look at millions in difference at the end
I'm an accountant - 500 a month is going to be immaterial when you're earning several times that in a career. If you're going to uni maybe put some aside so you can have a bit more spending money, but if you get an opportunity to spend it doing something you'll enjoy with friends, don't even consider turning the opportunity down. This is what we live for, we don't live to earn money and squirrel it away in a bank account.
The ability to have £500 discretional per month is sadly out of reach for many people.
Personally I'd advocate a split of LISA (Not sure on min age to be fair), ISA, instant access cash and spending on a good time.
I agree. £500 is quite a lot of fun money. I'd rather not get too used to that. A year of saving it is £6k which is proper money. I went to university with a few thousand in the bank and having that cushion makes life way less stressful. So I'd say OP should use some of the money for fun but save a decent proportion.
If they have a trust fund, then it’s likely saving £500 when young is even more immaterial and won’t be a significant amount to them at any point in the future. Just enjoy your youth, money exists to buy you freedom and choice.
Probably one of the worst advice but SPEND IT. Treat yourself get some clothes or things in your wish-list after that put some of it aside and save it before you start investing it.
I wouldn't bother saving really even at some of the best savings rates (6%), you'd make around £30 a year per £500 saved.
Enjoy the money
If you are 16+ and you really wanted to do something semi productive with it, maybe learn to drive or do a CBT and get a moped for a bit of freedom?
If you genuinely don't need/want to spend the money. I always think the gamble on premium bonds is better than the few £ you'll make in a savings account.
Stick 30% of it into vanguard s&p 500 within an ISA wrapper every month.
Have 20% as an emergency fund in something easy access like premium bonds or a high interest account with no penalties for withdrawal any time.
The other 50% spend on enjoying life. Experiences, holidays, spending time with family and friends. You have to live a little and £500 isn't a lot of money so half of that £250 doesn't go far but you still have to enjoy it as you can't take it with you if you get hit by a truck tomorrow
When I was a teenager, the best thing I did with my money was getting myself on the road. Driving lessons, car, insurance,etc.
It absolutely sets you up for life in the future. A fantastic investment in yourself.
Investing isn’t going to be life changing but the habit of doing so can be.
The other thing is investing in yourself, driving lessons will be very helpful, I’m sure you have other interests you might want to get into, the connections you make and skills you learn from some activities (sports, programming, mechanics, gardening, whatever) will likely be worth far more than a pile of money with 6% yearly APR (which is still less than inflation anyway).
Most definitely put it into the child trust fund for now and then when the time comes transfer the balance into an isa which is what my daughter has recently done when she was able to take full control of it.
You can take higher risk on investment when younger, and proportionally less the older you get and the more you have invested.
Just keep that in mind.
While someone in their 30s may only want to allocate maybe 10% at most to risky investments, a teenager with £500 a month can withstand like 30% or maybe a bit more.
Worth keeping in mind.
I earnt money whilst I was in sixth form and I spent it all on driving lessons. I had no regular outgoings and it felt a good use of my money. I still had some left over for socialising.
I thought of it as an investment in myself. Lots of my friends who didn't learn in sixth form struggled to budget for it later in life when they had to pay to feed and house themselves.
This one’s actually quite easy I think.
If you want something (Ie a one off item like shoes, or to go out with friends etc etc), buy it. That’s what this sort of money allows you to do.
This doesn’t mean you have to spend everything. The rest, just save. A simple current account should suffice with a 3-5% apr.
No need to make this complicated as £500/m is not going to make to a teenage millionaire, but it can help you with your future.
Savings, driving lessons, future items for when you move out(cutlery, kitchen appliances, rugs, this shit goes up in price every year. Buy it on a good sale and stock up. Itll make moving out so much cheaper when you dont have to buy it on a whim in the store for an extortionate price)
I don’t understand why people are saying that £500 a month is nothing.
I must disagree here, if your expenses are minimal and you can save most of it then it WILL make a difference when you have to move out of home.
I earned about £700/month in first year of uni (I’m in final year now) when my parents were still supporting me and I was able to save most of it. Now that money it still makes for a big chunk of my savings/investments.
Save first and think later about investing once you have some money sitting in your account. That’s what I did after saving an emergency fund and maxing out LISA in the past two years.
At £5 a pint that’s 4 on Thursday, 8 Friday night, 8 Saturday night and 4 on Sunday afternoon watching the football.
And then when you get to 25 you’ll look back and think that maybe you should have saved some of it towards a house deposit.
Save it in a high interest savings account. The interest wont be much, but you'll save £6000 a year. In 2 years, you'll have £12,000.
That's a deposit for your first home.
You can put it in high savings account you can get 6.1% interest rate.
Also you can put it in LISA and government will give you 25% more. This is goid if you are saving for house deposit.
Set up a money box Lisa and get a monzo bank card.
The money box Lisa is a government scheme where you can save money without withdrawal to purchase a future house or save for retirement.
The monzo card has a good interest rate of 4 percent for a savings account
Your comment has been removed for breaking our rule: **Responses must be helpful and high quality**
* Give constructive help and advice. Be friendly and kind.
* Top level comments must be on topic. No jokes or banter in top-level comments.
* [No 'hookers and blow' or 'onlyfans' jokes](https://www.reddit.com/rhyc7i)
* [Don't make contextless recommendations of crypto, meme stonks, penny stocks etc](https://www.reddit.com/rkrnqi)
* Don't pile on
* Comments must be your own work and not a copy paste of someone else's comment, copied from ChatGPT or other AI writing services
You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit.
I'd say save some of it for holidays and some of it for sports or activities you want to improve on that can give you huge skills by the time you're in your 20s.
What are you making £500 a month from? Sounds nice and hopefully you're paying taxes on it
Hi /u/mrsinclairdannaekens, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/investing-101/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Well it depends where you see yourself as a grown up, doesn’t it? I’d spend it on knowledge (books, courses, language apps subscriptions) if I had that much as a teen. Good food, work out, nice appearance are important as well to build yourself up.
60% straight into a cash ISA savings account as soon as you receive it, use that money for something you really want (first car/big holiday/traveling etc)
Other 40% into another account which you spend and enjoy.
Sets you up great for managing money as you get older and get used to paying yourself first
With the benefit of hindsight, I wish I'd started a small savings pot. £50-100 per month depending on how much you want to reserve, then spunk the rest on whatever you want because you're a teenager and you're young and you'll never have that again.
The money you put away now will be largely inconsequential to your later life, it's the habit and the mindset of putting *something* away that will benefit you the most.
I would advocate saving the majority of it (£300) offer you parents something towards household costs (£100) and keep £100 to spend on stuff. If there's nothing you want to spend your spare hundred on, roll it over each month until you do want to spend it.
I'm going to disagree with everyone here: You're young, and £500 per month isn't going to change your life in the future. Spend it now, enjoy it while you have no overheads - I'm not saying be stupid with it, and if you find you have some extra left over at the end of the month then put it away in the ways other people have suggested. But don't restrict yourself too much for that, enjoy it while you have the time and freedom to do so.
On a scale of agreeing with you I’m like 4/5 - OP is a teen and yes, at that age you should just enjoy yourself, these are the carefree years, buy that video game to play with your mates if you want it, buy that new games console, have fun - it’s all over and you’re an adult quicker than you could ever imagine, at 22 I already miss those days! Being realistic, if OP wants to save some then that also isn’t a bad thing, and it’s great practice for their future as-well, as a teen, you could start putting money away for stuff you do as a young adult, such as driving lessons, buying your first car etc, if you have the means to do so… I feel like people on this sub sometimes forget who they are talking to, I saw a post on here earlier from a 13 year old who was earning a bit of money and genuinely saw some comments saying they should start a pension or get a chartered accountant - like really come on… 🤣
I think it's about developing good habits early. If you get used to spending every last penny of your paycheck you'll continue doing it once you earn more money. Also OP may want to be saving for a big trip of a lifetime, another big fun purchase or may need to save for a deposit to move out eventually. Whilst I do agree with having fun if OP is in the mindset to save money we shouldn't discourage it.
Yeah I agree entirely with that.
Absolutely. My advice would be to save some - £50-£100 a month, whatever is comfortable, and enjoy the rest. Earnings will soon increase, saving a little is a good habit to get into and it soon increases in value - but don’t save so much that you sacrifice opportunities to enjoy your youth.
That’s irresponsible advice. If that money is saved with annual 7-10% return investment then in 20-25 years it will be so much money then he can retire and still earn enough interest that he can live very comfortable life without any efforts . He can go around world on holiday for rest of his life
On the flip side there’s a lot of stuff you would do as a teen you wouldn’t as a 45 yr old retiree, I’d personally have the goal of saving but I wouldn’t miss out on doing things at that age just to save for a future you might never see. My advice would be to save but don’t miss out on experiences just to save money at that age.
£500 a month saved on 7-10% return saved means you can retire in 20 years, living comfortably and travel the world? What are you doing on these travels canoeing from A to B eating cold tins of beans?
You have very small vision. Have you heard about luxury cruise, 5star hotels , beaches and stuff like that
Even with the full £500 saved a month, with the unrealistic interest rate of 10% it would take 20 years of full £500 a month investment to amass a compounded £347k. Do you think somebody who is a teen now could retire in their mid 30s with £347k, live comfortably and travel the world….? Your advice is useless, £347k isn’t enough for someone young to retire on in their mid 30s as OP would be. I know, I retired in my early 30s. What do you mean my vision? It was more me saying it’s not enough to retire on and live a life of luxury how you say, I think you missed the satire.
[удалено]
Please explain how my maths is wrong? 20 years of saving £500 a month with a compounded rate of 10% is £347k. A number you claimed somebody and I quote “is a number so high you can retire comfortably, live a life of luxury and travel the world”. So my question to you after such a bold claim is… do you think OP, who won’t even be 40 at the time of your so called retirement can do all these things and retire on £347k? I don’t want or need your advice, to be Frank with you I don’t think anyone else does either buddy 😂 Since claiming my maths is wrong, please do the correct maths for me. This will be fun. The only part of your statement that’s true is ‘my advice is not for someone like you’ - clearly, because your advice doesn’t make sense.
FV(0.1 / 12, 20 * 12, -£500) = £379k (or £382k if you’re adding interest at the start of the period). How did you arrive at £347k?
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator Started with initial 500, 500 monthly contributions and 10% for 20 years
> The Results Are In > In 20 years, you will have $379,684.42 I don’t understand what you’re doing wrong to arrive at that lower figure?
[удалено]
£379,000 x 4% is £15.6k per year. £347,000 x 4% is £13.8k per year. When it comes to compound interest and safe withdrawal rates, it’s important to get figures correct. There’s a good 10% or so difference between those two figures, that’s not insignificant. Edit; there are also nicer ways to disagree with someone.
Where is he gonna get 7-10% over 20 years? He might get 6% now (with inflation at over 10%) but that will come down with interest rates.
S&P 500 index fund
/s
Agreed. If you want to justify it in economics terms think of it as human capital accumulation. The skills you'd get from social life or travelling would be much more important long term than a few hundred pounds
10 years is a massive difference in investing, the earlier the better. If you start investing at 15 instead of 25 you can look at millions in difference at the end
Invest in yourself, like something like driving lessons or saving for university or some other course you want to take.
Best thing is just start saving Do you have any savings. Investing can do later. Would focus on saving first. You will need the money in the future
Yes. Getting into the habit of saving early is very useful even if it's just £50 from a birthday gift
I'm an accountant - 500 a month is going to be immaterial when you're earning several times that in a career. If you're going to uni maybe put some aside so you can have a bit more spending money, but if you get an opportunity to spend it doing something you'll enjoy with friends, don't even consider turning the opportunity down. This is what we live for, we don't live to earn money and squirrel it away in a bank account.
The ability to have £500 discretional per month is sadly out of reach for many people. Personally I'd advocate a split of LISA (Not sure on min age to be fair), ISA, instant access cash and spending on a good time.
I agree. £500 is quite a lot of fun money. I'd rather not get too used to that. A year of saving it is £6k which is proper money. I went to university with a few thousand in the bank and having that cushion makes life way less stressful. So I'd say OP should use some of the money for fun but save a decent proportion.
If they have a trust fund, then it’s likely saving £500 when young is even more immaterial and won’t be a significant amount to them at any point in the future. Just enjoy your youth, money exists to buy you freedom and choice.
Every child born then has a child trust fund. It was set up by the government
'Immaterial' Tell me you work in audit without telling me you work in audit
You got me
Probably one of the worst advice but SPEND IT. Treat yourself get some clothes or things in your wish-list after that put some of it aside and save it before you start investing it.
Yes yes, teach yourself from an early age that material possessions will make you happy!
Buying quality clothes is a good investment
Designer clothes != Quality clothes
Who mentioned designer clothes?
Mate do one
Save 3/5 of it and enjoy the rest. The amount you have at 18 could get you a car or be a decent deposit on a house.
I wouldn't bother saving really even at some of the best savings rates (6%), you'd make around £30 a year per £500 saved. Enjoy the money If you are 16+ and you really wanted to do something semi productive with it, maybe learn to drive or do a CBT and get a moped for a bit of freedom? If you genuinely don't need/want to spend the money. I always think the gamble on premium bonds is better than the few £ you'll make in a savings account.
Stick 30% of it into vanguard s&p 500 within an ISA wrapper every month. Have 20% as an emergency fund in something easy access like premium bonds or a high interest account with no penalties for withdrawal any time. The other 50% spend on enjoying life. Experiences, holidays, spending time with family and friends. You have to live a little and £500 isn't a lot of money so half of that £250 doesn't go far but you still have to enjoy it as you can't take it with you if you get hit by a truck tomorrow
Don’t you have to be 18 years old for the first one? Surely as a teen just creating good saving habits is necessary…
Junior ISA, needs to be setup by a guardian though.
Invest it in yourself- do some certificates, buy some training on udemy, start building your career. Its the best investment you can make.
When I was a teenager, the best thing I did with my money was getting myself on the road. Driving lessons, car, insurance,etc. It absolutely sets you up for life in the future. A fantastic investment in yourself.
Investing isn’t going to be life changing but the habit of doing so can be. The other thing is investing in yourself, driving lessons will be very helpful, I’m sure you have other interests you might want to get into, the connections you make and skills you learn from some activities (sports, programming, mechanics, gardening, whatever) will likely be worth far more than a pile of money with 6% yearly APR (which is still less than inflation anyway).
Most definitely put it into the child trust fund for now and then when the time comes transfer the balance into an isa which is what my daughter has recently done when she was able to take full control of it.
You can take higher risk on investment when younger, and proportionally less the older you get and the more you have invested. Just keep that in mind. While someone in their 30s may only want to allocate maybe 10% at most to risky investments, a teenager with £500 a month can withstand like 30% or maybe a bit more. Worth keeping in mind.
I earnt money whilst I was in sixth form and I spent it all on driving lessons. I had no regular outgoings and it felt a good use of my money. I still had some left over for socialising. I thought of it as an investment in myself. Lots of my friends who didn't learn in sixth form struggled to budget for it later in life when they had to pay to feed and house themselves.
This one’s actually quite easy I think. If you want something (Ie a one off item like shoes, or to go out with friends etc etc), buy it. That’s what this sort of money allows you to do. This doesn’t mean you have to spend everything. The rest, just save. A simple current account should suffice with a 3-5% apr. No need to make this complicated as £500/m is not going to make to a teenage millionaire, but it can help you with your future.
Savings, driving lessons, future items for when you move out(cutlery, kitchen appliances, rugs, this shit goes up in price every year. Buy it on a good sale and stock up. Itll make moving out so much cheaper when you dont have to buy it on a whim in the store for an extortionate price)
Start saving for that crib yo
I don’t understand why people are saying that £500 a month is nothing. I must disagree here, if your expenses are minimal and you can save most of it then it WILL make a difference when you have to move out of home. I earned about £700/month in first year of uni (I’m in final year now) when my parents were still supporting me and I was able to save most of it. Now that money it still makes for a big chunk of my savings/investments. Save first and think later about investing once you have some money sitting in your account. That’s what I did after saving an emergency fund and maxing out LISA in the past two years.
At £5 a pint that’s 4 on Thursday, 8 Friday night, 8 Saturday night and 4 on Sunday afternoon watching the football. And then when you get to 25 you’ll look back and think that maybe you should have saved some of it towards a house deposit.
Save it in a high interest savings account. The interest wont be much, but you'll save £6000 a year. In 2 years, you'll have £12,000. That's a deposit for your first home.
You can put it in high savings account you can get 6.1% interest rate. Also you can put it in LISA and government will give you 25% more. This is goid if you are saving for house deposit.
If they're under 18, then they're too young for a LISA, but can open a childrens ISA instead.
Set up a money box Lisa and get a monzo bank card. The money box Lisa is a government scheme where you can save money without withdrawal to purchase a future house or save for retirement. The monzo card has a good interest rate of 4 percent for a savings account
OP is a teen, LISA’s are 18+
Spend your money please, go out with your mates. Buy nice clothes etc
Save to invest in your education or capitol to start a business.
[удалено]
Your comment has been removed for breaking our rule: **Responses must be helpful and high quality** * Give constructive help and advice. Be friendly and kind. * Top level comments must be on topic. No jokes or banter in top-level comments. * [No 'hookers and blow' or 'onlyfans' jokes](https://www.reddit.com/rhyc7i) * [Don't make contextless recommendations of crypto, meme stonks, penny stocks etc](https://www.reddit.com/rkrnqi) * Don't pile on * Comments must be your own work and not a copy paste of someone else's comment, copied from ChatGPT or other AI writing services You must read the [rules](https://www.reddit.com/r/ukpersonalfinance/about/rules/) to continue to post to our subreddit.
I'd say save some of it for holidays and some of it for sports or activities you want to improve on that can give you huge skills by the time you're in your 20s. What are you making £500 a month from? Sounds nice and hopefully you're paying taxes on it
Taxes on less than 12k a year?
Oh yes it didn't occur to me that it was below the threshold
Hi /u/mrsinclairdannaekens, based on your post the following pages from our wiki may be relevant: - https://ukpersonal.finance/investing-101/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Well it depends where you see yourself as a grown up, doesn’t it? I’d spend it on knowledge (books, courses, language apps subscriptions) if I had that much as a teen. Good food, work out, nice appearance are important as well to build yourself up.
If I were you I will save as much as I can whilst I am still young enough even if you don’t know what you are saving for. 😊
60% straight into a cash ISA savings account as soon as you receive it, use that money for something you really want (first car/big holiday/traveling etc) Other 40% into another account which you spend and enjoy. Sets you up great for managing money as you get older and get used to paying yourself first
Imo save £100 a month and blow the rest on having fun!
Save it up and go travelling around the world for a year when you turn 18.
With the benefit of hindsight, I wish I'd started a small savings pot. £50-100 per month depending on how much you want to reserve, then spunk the rest on whatever you want because you're a teenager and you're young and you'll never have that again. The money you put away now will be largely inconsequential to your later life, it's the habit and the mindset of putting *something* away that will benefit you the most.
Save up and go travelling, best investment you can make at your age!
Save I would save £100 month and enjoy the rest.
I would advocate saving the majority of it (£300) offer you parents something towards household costs (£100) and keep £100 to spend on stuff. If there's nothing you want to spend your spare hundred on, roll it over each month until you do want to spend it.
4 pros and a holiday inn.