Research from Ford Money, the UK savings bank from Ford Motor Company’s financial services business, shows it would cost £59,305 on average for people to realise their most important life ambitions. The cost is highest for people in their 40s, at an average of £68,820.
Ford Money launched in April to help consumers reach their goals. The new research, Aspirations Across the Ages, asks 3,000 Britons about their savings priorities to map out the UK’s financial habits.
The top three reasons for people to save are:
- To live life to the fullest (29 percent)
- To stay motivated (29 percent)
- Because they have reached a certain age (21 percent)
Looking at different age groups, the desire to live life to the fullest was most prevalent for those in their 20s (40 percent vs 29 percent average). Those in their 40s are most likely to save so they don’t miss out on key life experiences (19 percent vs 12 percent average).
Small changes reap big rewards
People are saving an average of £194 per month towards their goal, meaning it would take them around 25 years to achieve it.
By taking a ‘little and often’ approach, savers could cut in half the time it takes them to achieve their goals. Respondents stated they could save up to £187 more each month, which means they could reach their savings up to 12 years sooner.
“Managing money is like achieving any goal in life. Small changes can bring significant benefits later on. This is especially the case when it comes to saving money. We need to spend in order to maintain our lifestyle, and occasionally treating ourselves to luxuries helps us remain motivated, but putting aside some extra cash each month can help later on,” said Honey Langcaster-James, Life & Career Coach.
“Finding ways to boost your savings can seem quite a daunting task at first, but breaking your goal up into smaller sub-goals can make it much more manageable. Saving is all about getting into the right mindset and making a habit out of it. Being more aware of where your money is going can help you to achieve your goals quicker.”
Generational savings habits
The phrase ‘an Englishman’s home is his castle’ rings true, with Ford Money’s research showing that the top priorities across all age groups are either to own a home or make home improvements.
Buying a home is the most common goal for people in their 20s (50 percent) and 30s (27 percent). Once people reach their 40s, redecorating takes priority, favoured by 25 percent of savers in this age bracket.
Family outings and travel are also high on the list of savings priorities. Family outings are favoured by 21 percent of savers in their 30s, but decline in popularity as people grow older, with 11 percent of over 70s saving towards the same goal.
“Making a house a home is clearly a priority, but it’s no small task. Saving can be more difficult in some months compared to others, but getting yourself into the habit of putting money aside can pay dividends later on,” said Julian Hynd, Chief Deposits Officer, Ford Credit Europe, the parent company of Ford Money.
Honey Langcaster-James, Life & Career Coach, offers her top tips on how people can achieve their life and money management aspirations:
- Create a savings plan.
Create a realistic monthly savings plan by factoring in little treats every so often. You should never completely starve yourself of life’s indulgences as it can make it more difficult to stick to your plan. Find accounts where you can name your savings goal. This gives you something to look forward to and enables you to stay on track as you watch your savings grow.
- Start early.
It’s always easier to maintain a good savings habits if you begin when you’re younger. However, it’s never too late. The earlier you start saving, the more you will benefit from compound interest which will feel particularly rewarding. This means you’ll earn interest on the interest you receive each year. This kind of bonus can help you to stay motivated. It also builds up and boosts your savings without you having to deposit as much to reach your goal.
- Have a ‘no spend week’.
Consider having a ‘no spend week’ each month. Prepare for it by buying the things you need the week before and try to refrain from buying anything you haven’t planned for during this ‘no spend week’. An exercise in self-discipline can boost your confidence in your ability to manage your savings effectively. Proving to yourself that you can live without spending excessively is a great way to change your mindset around money.