One thing I haven’t found though is an up to date UK specific guide to ‘how much to save up, where to put it and what order to save in’. Have seen some that are US-focused but not too helpful.
I’d assume it’s best to pay off debts first, then put money into your pension (if you have one), then add to emergency fund (ISA?) then long term investments (bonds, ETFs?).
Can anyone point me in the direction of a resource on this or explain your approach? I am in my 20s and earn an average salary around £30k, so if you are stacked to the rafters with vintage porsches it might be a little bit different
On fuk’s recommendation have been doing a load of reading on Reddit and a few Facebook groups regarding saving and investing. Very interesting and starting to get my head around things.
All depends on the cost of your debt, saving objectives, employer pension contributions etc.
If you have expensive debt (over 4-5%) then clearing it isn't the worst idea in the world but you are in your 20's so get comfortable with debt, because you can use it to your advantage later on.
Investing in pension in your 20's and making sure you pension is invested in a high risk, high return portfolio is a great winner as compounding between now and 40-50 years from now will, even at an average return of 5%, mean every £ you put in now is worth a lot more. If you can achieve a 10% return annualised you double your money every 7 years with compounding so by the time you run that over 50 years your £100 saved now becomes nearly £12k just with returns. at a 5% return you double it every 15 years and it turns into £1100 or so at year 50. Squeeze out consistent returns and they will benefit you massively.
If you want to use you funds in future (house deposit etc) you may as well save as much as you can in an ISA or even out of an ISA (you only pay tax on gains over £3k realised in any financial year, you pay none in an ISA) and then look to get as best a return as you can. Aim to buy and hold shares or funds for 5 years minimum. Trading too frequently is a briliant way to reduce your returns. Have courage in your own conviction or put your money into somewhere where they have a track records of good (and consistent) returns.