How Young Entrepreneurs are Saving for the Future

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In theory, saving money is easy. You get a pay cheque every month from which you pay your rent, bills and any other necessary-but-crippling monthly outgoings from your current account. You work out how much money you'll need to survive another month in whichever miserable village, town or city you live in, and then put the rest somewhere you can't touch it — you know, like an ISA or a bank account to which you've happily lost the physical card and forgotten the internet sign in for.

It's a failsafe plan — unless you don't know when your next payday is. Maybe you run your own business, maybe you're freelance, for whatever reason you are at the mercy of "circumstances outside your own control", circumstances which, from time to time, may find you eating tinned everything for months on end.

So why is saving money important? Well, in the words of stylist and writer Charlotte Roberts: "Because TAX! Sorry to sound like a boring old fart, but unless I'd lived at home for part of the year my first tax bill was due I would have been well and truly done. You basically have to think of part of every pay cheque or invoice as not belonging to you."

For freelance business consultant Alice Burks, saving money contributes to mental health". "I find knowing I have a buffer, no matter how small, is good for my mental health. It can be very anxiety-inducing if you feel you're living totally hand to mouth." If you're running a small business, financial security is even more important. Sam Fisher, co-owner of a London independent book shop who is currently saving to renovate the shop's basement into an event space, tells me: "If you don't keep something aside for the months where things aren't going so well you're going to be eating beans and rubbing sticks together to keep warm. You also need money to reinvest in order to grow your business. People get bored quickly and you always have to have something new to offer."

Depressingly, as Aviva's Saving and Retirement Manager Alistair McQueen points out, "socio political climates will come and go, but one trend that is relentless is our increasing life expectancy. A longer life will likely mean a longer retirement. In the 1950s, our retirement savings had to fund us for maybe 5 years. Today, funding for many will need to last twenty or thirty years." Still, on the plus side, "modern savings products, including pensions, recognise the world has changed. Many savings products allow you to stop or start, increase or decrease your savings from one month to the next. This flexibility should help those without a regular monthly income to save when they can."

To help you start saving, we've pooled together advice from people just like you: part-time workers, interns, freelancers and small business owners trying to live life, have fun, and put aside a couple of quid at the same time.

Research* has shown that one in five young people spend most of their disposable income on eating out, and nearly half feel pressure to spend more money on socialising with friends and family than they're comfortable with, and according to the United Nations, globally, a third of food produced is thrown away*, by supermarkets, by restaurants, and by you. A crusty pot of hummus here. A tired pack of rocket there. It all adds up.

"I'm about to start working for a company that works with restaurants to reduce their food waste," Eve Hemingway tells me. "It's interesting as there is a growing trend in companies looking at sustainability and in particular, food waste. For example, one app allows users to post leftovers or share surplus food, or there's another where users can buy discounted restaurant meals at the end of a night, depending on what's leftover. Shopping online can be cost efficient," Eve adds. "You can see the total cost of your basket as you shop so it's good to set yourself a budget and stick to it. I also think certain veg box providers are great value and they provide you with so much delicious, local, veg. I often batch cook, take packed lunches and keep my freezer well stocked with soups and old curry."

Whoever said "look after the pennies and the pounds will look after themselves" had the right idea. When you're trying to save money, it's the little things that add up. Out of everyone I spoke to, the two pieces of advice that kept coming up were to take fewer cabs and to waste less money on takeaway coffee.

"I don't spend on beauty products or treatments. I cut my own hair and do my nails, I even make my own body cream and toothpaste. I don't take public transport: I cycle instead," says teaching assistant Clara. Cycling isn't for everyone, but as business consultant Alice points out "if you're saving and you don't cycle, consider walking. It takes a while, but it can be a good time to think, listen to music, be mindful and slow the pace down a little. It's also exercise, for free!"

It may be trickier to cut corners when you run a small business, but bookseller Sam has one small-but-vital piece of wisdom. "Get energy saving lights. It sounds like a small thing but will actually save you loads of money on your bills."

Bookshop owner Sam said, "Ideally, you'll have a rainy day fund for burst pipes and exploding plug sockets. You also want to make sure you have a good line of credit that can cover any unexpected disasters. Fortunately for my business, there aren't many ways in which books can malfunction!"

Sometimes, potential ways to make money can be found right under your nose. "As a stylist I often accumulate rather a lot of freebies — I know, woe is me — so often I sell a few bits and bobs online and hope for the best," Charlotte says.

*Saving money contributes to mental health" source: Aviva research in consultation with Future Foundation and ICM. The findings are based on 5,000 online interviews among a nationally representative sample of UK adults aged 18 and above, carried out in February 2016 and analysed during February/ March 2016.

*"A third of food produced is thrown away" source: Food & Agriculture Organization of the United Nations 'Global Food Losses and Food Waste' report, 2011

How much do you think you should be saving for your retirement? Use Aviva's Shape My Future interactive online tool to build your future life and discover how much you might have to live on in retirement.