By Megan Lane BBC News Online Magazine

When Tony Blair was confronted by a medical student over tuition fees on Monday's Newsnight, one of her most pointed questions could equally apply to any young Briton, student or not.

"How am I supposed to have a mortgage? When am I supposed to feed myself, when am I - heaven forbid - to have a social life?" asked Julia Prague. She calculated that under the new system, she'd graduate with a �40,000 debt - repaying this loan and a mortgage would account for more than 50% of her salary.

It is not only student loans and mortgages that 20- and 30-somethings face.

Hot seat: The PM and Julia Prague

There are credit card debts and overdrafts. National Insurance has gone up, and council tax is rising. And as the population ages, there will be fewer workers supporting more pensioners.

Generous state pensions in 30 or 40 years' time seem a slim prospect, and early retirement may be a dream for all but a few. Then there is cost of raising any future children - plus the prospect of tuition fees should the little tykes go on to university.

Anyone paying full attention to all this doom and gloom would never spend a penny, reasoning that they need to save everything they've got. Little wonder then that many take a head-in-the-sand approach to financial planning.

The bright side

But there is a silver lining, says financial pundit Jasmine Birtles, co-author of A Girl's Best Friend is Her Money.

Get smart now, says Jasmine Birtles

"The great thing that people in their 20s and 30s have on their side is time. Yes, we've come out of the golden age of pensions and student grants.

"But if you get your head together, and get real about the financial situation - and that of the country - you can look forward to your own gold age. It's just that now you have to pay for it."

The first step is to pay off any outstanding debts as fast as possible to get interest payments down as these simply add to what you owe (unless it's a 0% balance transfer or a student loan, which has a low rate).

"And you must stop spending on credit cards, no matter how much you think it will hurt. You will get used to it," she says.

Then start saving whatever you can spare, even if it seems a paltry sum - it will soon add up.

Money for nothing

"Even as little as �25 a month in a tracker fund - which tracks shares in the FTSE 100 and pays compound interest - is a good investment over time. It will earn many thousands by the time you retire. These do better than managed funds, and without lining the pockets of braces-wearing City fund managers who get Porsches for Christmas."

MANAGING YOUR MONEY Use standing orders and direct debits for regular bills Set up a standing order to a savings account Save for unplanned events as well as holidays, Christmas etc If you can pay for goods outright, don't take out credit unless it works out cheaper Pay at least 10% of credit card bill each month Citizens Advice Bureau

Yet public confidence in such long-term savings products is not high, thanks in part to three years of tumbling stock market returns. According to a National Consumer Council report released on Wednesday, it will take more than a buoyant stock market and low-cost products to encourage people to save for their retirement. It wants the government to boost access to basic financial advice and ensure savers have a right to compensation if they're mis-sold a product.

There is also a lot of "free money" out there for those who know where to look, says Ms Birtles - bursaries for young writers, travel discounts, tax credits for young families, and grants for those wanting to train for in-demand professions such as teaching.

"And make use of your parents. You've heard of the boomerang generation - people who go back to live with their parents for a year or so to save money.

"If you can't get on the property ladder on your own, go shares with them, or ask them to be guarantors on your mortgage. If they can afford it, get them to contribute to the deposit, or to buy a place for you - although there's not many parents with that sort of money."

Funds for future

If you're among the 60% of adults not already saving for a comfortable old age, conventional wisdom holds that you should halve your age to get the percentage of your salary to be set aside.

Thus a 24-year-old new to a pension plan should save 12% of their earnings - minus any contribution their employer makes - and a 40-year-old new to retirement savings should pay 20%.

To save for big ticket items in the future - a deposit on a flat, a baby, a dream world trip - add another 10%.

"Look hard at your outgoings. Keep a spending diary for a month, and cut back on things that don't make you happy. Smoking, for instance, doesn't make you happy - if you are on 20 a day, that's �2,000 a year. Save that money for five years, and you've got �10,000 - more than enough to start a family," Ms Birtles says.

"Or have one less takeaway a week, a saving of �250 a year. Ditch that gym membership and Tube pass, and cycle to work instead. Switch utilities for a better deal. Not only will you start building up a nest egg, you'll have more money for things that do make you happy, like handbags or trips to Spain."

Which just goes to show that saving doesn't have to make your life miserable.

Do you have any smart savings advice? Let us know using the form below:

Any time you get a pay rise, set up a standing order to a savings account for half that amount. Start saving it before you get the chance to miss it.
Fiona, Scotland

At home, put on a jumper and turn the heating down a bit - save 5% on heating costs. It's cheaper shopping late at night - some perishable goods are reduced by up to 60%. Use your local library - videos loaned at �1 a week, magazines/books free, CDs from 50p.
Tim, England

Here's a dead simple rule that puts spending in perspective: "If you are in debt, any money that you earn/acquire does not belong to you until the debt is repaid." It becomes far harder to squander money on music, clothes etc, and helps me realise the value of what I do get.
Mat Sumner, UK

I did a quick calculation of what % of my salary should go into savings: I'm a graduate earning �13,000 a year. After tax, that's �725/month. Take off �250 pcm for rent, and �55 for council tax; I have �400 to live off. If 12% goes into a pension (I'm 24) - �130 - and another 10% for 'big ticket' items - �110 - I'm left with the princely sum of �160/month (�40/week) for food, bills, travel, clothes, and socialising.
Alison, UK

Alison, I earn just under �13,000 and after tax, NI and student loan repayments, I'm still left with �850 a month. After the deductions you have mentioned, that would actually give about �80 a week - not �40. Perhaps your calculation was a bit too quick? :)
Kat Flynn, UK

Get yourself a cash ISA, no risk from loss and interest paid free of tax. Use the breaks the goverment gives you.
Tom Bridle, UK

We use a computer program to keep track of our money. We do use a credit card for everyday shopping and holidays. We use one that gives us 1% back on every thing we spend and we pay it off every month.
Lara , UK

Pay extra into your mortgage - you don't pay compound interest on that amount, so you save in the longer term and you don't get taxed on the saving either. Some lenders even let you withdraw the overpayment, so you aren't stuck on a rainy day.
Tony Brooks, UK

Take a packed lunch to work everyday. The average sandwich costs about �2.50. If you pack your own, you save �12.50 a week, and �50 every month.
Bel Andrew, England

Dump cable/satellite TV and get freeview; do cleaning yourself and not pay cleaner �1K a year; do without a car - taxis and tube costs much less; run in parks and swim in public pools rather than the gym (�1k for first year).
John, UK

Share lifts to work. I save �60 a month.
Andrew Davies, UK

Cut up your cards and use cash for everything. This really gives a feel of what you're spending.
Thomas Smith, England

Don't buy any savings or investment product unless you fully understand its potential downside. If the salesman can't explain it in simple terms, buy something else. If I'd known the scandal of "guaranteed annuity rates", I'd never have invested in Equitable Life.
Keith F, UK

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