17 April 2015

What money advice would you give your younger self?

Living and learning is what life is all about and when it comes to managing money there's plenty to learn. When we handed you a hypothetical time machine and asked you about the advice you'd race back to drum into your younger self, your answers were full of both wisdom and wit.

Many of you advised those earlier versions of yourself to save, save, save. Others counselled climbing on to the property ladder as soon as possible. Some of you spoke of the sense in investing in a pension from an earlier age. And many others suggested that restraint and a thrifty state of mind would have been very helpful when you were younger. But many of you also argued that although money is important, it's just as important to enjoy life and value the experiences that spending your money can give you.

Look after the pennies and the pounds will look after themselves

"Auntie Lilly was brought up in the war years and always said before you buy it: 'Do you need it, can you live without it?' You won't be surprised to hear that I never spent the inheritance she had to bestow on me," said Graham.

This sensible attitude to living within your means, and saving for a rainy day, was perhaps the most popular advice you had for your young self. As Caroline explained: "You don't have to stay in and be boring, just save some money as you go… a little will end up a lot. ISA's are great and a brilliant way to save tax free."

Get on the property ladder as soon as you can

Almost as popular as advice about thrift and saving was the recommendation to get on the property ladder sooner. "My husband and I left it late to buy a house in which time the prices doubled. If we had invested in a mortgage earlier we would have had a better and more valuable house now, and we could have downsized with money to spare," explained Janette.

There were some words of warning about the importance of paying off your mortgage though. "A roof over your head is the most important thing that you can invest in but do it wisely," said Janet. "My husband died young and I have been left with an interest only mortgage… it will never be paid as the endowment is at a loss. So at the end of the mortgage I will have to sell my home."

Proper pension planning prevents poor pensioners

Hot on the heels of savings and property came pensions. As Richard put it: "Start a pension as early as you possibly can. It might seem incredibly boring and irrelevant - after all, you're never going to grow old, are you? But you'll realise, in your fifties, what a good idea it was."

There were some leftfield suggestions for ways to provide for your retirement, though. Ian advised developing a taste for art: "Every year buy one original piece of art that you really like. You never know when a new artist will suddenly become the new star and the value of your piece will rocket."

Invest wisely in your long-term future

You had thoughtful advice when it came to investments. Alan urged investing with boldness: "There is merit in boldness. Explore your options fully and accept some short-term pain for the longer-term gain." Jill, on the other hand, was keen to advise caution, "Think carefully about investments," she said. "Never invest more than you can afford to lose."

Ann was of the opinion that staying focused on performance and teaching yourself about the best options was a sensible approach. "It's down to you to watch the progress and ask searching questions as to whether they remain good choices," she said. "Really good information is available free by consistently reading the financial sections of good weekend newspapers."

Money isn't everything

Many of you pointed out that although being wise with money would make for a more secure later life, it was just as important to enjoy your time along the way. Judy put it perfectly: "Make sure you use your income to ensure an invaluable store of memories to save as well as money. Remember that investment in the happiness and helping of friends and family can reap dividends for you." We couldn’t agree more.

Thank you for sharing all your words of wisdom with us, we really enjoyed reading them.

The views expressed are those of customers in response to a prize draw in a previous issue of our Investments newsletter and they are not the views of Nationwide.

The value of investments can go down as well as up and you may not get back the money originally invested.

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