Picture this: It's your fourteenth birthday and the postie has just dropped off several cards from distant relatives. You quickly tear them open and find that they are stuffed full of cold hard cash… well, okay maybe a few fivers. The money is burning a hole in your pocket, but is it better to save or spend it?
Whether you earn some money from a part time job, receive a weekly allowance, or have a side-hustle on the go, choosing whether to spend or save is never an easy decision. We've asked some sixth form students what their experiences are with how to save money. Watch the video below to find out.
I'd say I'm good at saving money, but from others they might say I'm not.
I hope I am.
When I was younger, I was a lot better at saving money. But as I've got older, I've been going out with my friends a lot.
No, I am not.
Some impulse buys sometimes, but overall I'd say I'm quite good at spending saving money.
I watched a lot of videos on TikTok which helped me to save my money. There's a lot of interesting videos on how to open different bank accounts, and where I can put my money, and where the best interest rates are.
I cash it out and then I keep filling like an envelope in my room somewhere. I kind of forget about it, and then when I find it again, it's like, oh, I've made money.
Sometimes it's just nice to write it down. How much money you have, even if it's in your notes, a piece of paper on an app that you have.
The saving rule. So it's 50, 30, 20. So 50% goes to your needs, 30% goes to your wants, and 20% goes to your savings.
I'll say one thing I've saved up for is.
My computer.
Buying gifts for my boyfriend or my parents.
I've been playing music since I was really, really young, and there was a guitar that I really wanted.
And it was just putting money to the side any time I could.
About a year ago, I saved up all my chore money and stuff and I thought, why not surprise my parents and buy them a meal?
I kept saving, saving, saving, and in the end I got the money to buy it.
Going to the sweet shop and buying my siblings some sweets. I just love doing that. It's the excitement of my siblings faces makes my day.
I was really happy with it because it's probably the most expensive thing that I've got. And when you actually get it, you feel like really accomplished.
And that gives you a lot of happiness because everyone's happy having a nice meal and you cover it for them.
That sense that you've saved up and you've got it is brilliant because you know that you've achieved it yourself.
Short term pain for long term gain. So if I save my money and keep motivated, I know that I'll get a big prize at the end.
You need to keep a goal in mind when you have that money you need to plan. Where do you want this money to go? How do you want to spend it.
I would tell myself to not be so focused on what everyone else is getting around you. So maybe there's a trend. You don't have to get that product that everyone's wearing. Like, stick to saving for what you know that you actually want and not what other people are telling you that you want.
How to save money?
Olivia says that she uses a 50:30:20 split when it comes to saving money. So 50% goes to your needs, 30% goes to your wants, and 20% goes to your savings.
George says that he watches a lot of videos on TikTok, which helped him to save money. "There's a lot of interesting videos on how to open different bank accounts, where I can put my money, and where the best interest rates are."
While George finds TikTok videos useful, there can be lots of money advice on social media that isn't legit, so you need to be careful who's advice you take. At the end of the day there are lots of risky investments online and you wouldn't want to put your hard-earned cash at risk. It's always best to talk to a trusted adult before moving your money about.
Why not try and set yourself a challenge to save money? If you start by putting 1p away on the first day, 2p on the second day, 3p on the third day and so on, by the end of the year you will have saved over £650! You don't have to do this challenge for the whole year, but you can see that saving a little can go a long way, and you can always stop when you've reached your savings goal.
You need to keep a goal in mind when you have that money you need to plan. Where do you want this money to go? How do you want to spend it – Arifah
What is interest?
You might have learned about interest in your maths lessons at school. Interest applies on both savings in a bank or building society account and also on loans you might take out when you are aged 18. For savings, interest is earned on the amount invested. For loans, interest has to be paid on the amount borrowed. An interest rate is usually specified as a percentage, and this is applied at specified periods, for example annually. The amount of interest to be paid on a loan or received in savings is calculated using the interest rate. You can learn more about interest on our Bitesize Maths pages.
What is compound interest?
Compound interest is calculated on a changing amount. As interest is added the amount grows and so the interest also increases. This is really good when you have a savings account, as the amount of money will get bigger and bigger… but it is less good on a loan, as the amount you owe will also increase! You can find out how to calculate compound interest on our Bitesize Maths pages.
If you need support
You should always tell someone about the things you’re worried about. You can tell a friend, parent, guardian, teacher, or another trusted adult. If you're struggling with your mental health, going to your GP can be a good place to start to find help. Your GP can let you know what support is available to you, suggest different types of treatment and offer regular check-ups to see how you’re doing.
If you’re in need of in-the-moment support you can contact Childline, where you can speak to a counsellor. Their lines are open 24 hours a day, 7 days a week.
There are more links to helpful organisations on the BBC Bitesize Action Line page for young people.
Missing out due to money
We have some tips from sixth form students about what you can do if you have to miss out due to money.
How to earn money for 16s and under
Financial journalist Iona Bain gives her tips to earn money if you are 16 years old or younger.
How to handle peer pressure
Some sixth form students give us their tips about how to handle peer pressure situations.
