Savvy teens realise importance of savings

Saving savvy teens and twenty somethings are putting their parents' generation to shame when it comes to financial management.

Nearly a fifth (18%) of 20 somethings and nearly a quarter of those aged 18 to 19 aim to save up to £3,000 annually. This is in contrast to just one in seven of those in their 50's who aim to save the same amount, according to research released today from Lloyds TSB Savings.

A third of all those surveyed said they realised the importance of savings as teenagers, but less than half (45% and 44% respectively) of those in their 40's and 50's started to save in their early teens. This compares to 64% of those in their 20s who started saving before they reached their 18th birthday. In contrast, 10% of those surveyed didn't think savings were important at all.

The research also highlights a determined attitude amongst young people when it comes to keeping finances on track. A fifth (17%) of teens and 20 somethings are regularly putting money into a savings account a few times a month compared to just one in ten of those in their forties.

Mo Shapiro, Life Coach observes ‘It is as if the saving gene has skipped the flower power generation and the baby boom generation want to, or have been frightened into, taking charge of their financial lives now.'

‘From a psychological perspective it is important to have a goal to work towards, whether this is in terms of your finances, your work or your relationships. We know that people achieve more when they have something to work towards and even more so when they write their goals down and tell others about them. The teens and twenties in this survey are demonstrating success behaviour by having a defined sum that they want to save each year and going for it.'

‘It's also good news because a regular savings habit developed early in life becomes part of an ongoing budgeting regime and is therefore not considered an imposed chore or burden'

The notion of savings and what to do with your money were not popular discussion topics between parents and children when the 50's age group were growing up. There was far more distinction between what was and what was not discussed in front of children. This has clearly changed over the years with parents being more open about their financial circumstances and encouraging their children, including those now in their 20's, to understand more about savings. Over two thirds (71%) of those in their 20's said they learnt their savings habits from their parents, in contrast to 61% of those in their 50's.

Greg Coughlan from Lloyds TSB Savings commented ‘Often the biggest barrier to savings is starting in the first place, so it's really encouraging to see that today's young people are taking the first steps in creating a nest egg for the future.

‘It's great that money matters are no longer the taboo they once were and parents want their children to learn about savings from an early age. The younger they start understanding and managing their finances, the better chance they have of a creating a healthy relationship with them. By getting into the savings habit at an early age and putting a fixed amount of money away on a regular basis, no matter how small, young people develop a structured savings habit that will last a lifetime.

‘This increased knowledge of the importance of saving and budgeting will help them to effectively manage their money and financial commitments now and in the future.'