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“I can’t afford to save right now – but that isn’t necessarily a bad thing”

New research has found that a significant number of 18-35 year olds don’t see the point in saving right now. We spoke to three women about why their mindsets towards saving have changed in recent years.

If there’s one piece of financial advice many of us have been hearing our whole lives, it’s to continuously put money away into savings. Whether it’s for a house, a holiday or just a “rainy day”, saving part of your income each month is widely considered to be a good idea.

But even if it’s a smart idea in theory, maintaining savings isn’t always possible. Especially now as the cost of living crisis continues to worsen and more than 87% of adults in the UK reporting a cost of living increase in April 2022, according to the Office for National Statistics.

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At best, the cost of living crisis means cutting back on doing the things we enjoy; at worst, as is the reality for many people across the UK right now, it’s worrying about where your next meal is going to come from each day.

Understandably, saving money might take a backseat during this time, and data collected by the financial coaching company Claro Money found that one in two Brits say it’s been harder than ever to save since the start of 2022.

This is particularly the case for millennials and Gen-Z, whose attitude to savings is being completely transformed by the difficult times we’re living in. In fact, a survey of about 2,600 US adults found that 45% of 18-35-year-olds “don’t see a point in saving until things return to normal”.

But this just isn’t about the cost of living crisis. Our attitudes to money have been affected by both the pandemic, and for many, the after-effects of spending a significant part of their youth stuck at home. This is the case for 28-year-old Rebecca, who has recently stopped putting money into savings in order to “cope with the return of having a social life post-pandemic”.

“Saving at the moment feels more of a luxury than a necessity,” says London-based Rebecca. “Being able to say ‘yes’ to things like travel, festivals and gigs following a time where they weren’t possible has become such an important catalyst behind my happiness and sanity.

“I think people sometimes forget the long-term value of socialising,” Rebecca continues. “They’re not random short-term bursts of a good time, but memories that’ll often carry into the future. That future might not be in the big house your savings funded, but it’s possible it will be somewhere else just as great.”

Many people are making up for the time they spent at home by travelling and socialising more than they usually would right now, which means the money they once were saving during the pandemic now needs to be allocated elsewhere. “I believe that you can have your cake and eat it too,” says financial coach Esther Bangura on people’s decisions to spend rather than save. “As difficult and devastating as the pandemic was, it taught us that life is fleeting and that there is more to life than working to pay the bills. True financial wellness is about striking the right balance in your relationship with money.”

However, this isn’t necessarily a long-term solution to financial wellbeing and Bangura stresses the importance of having an “emergency fund” of at least one month’s expenses put aside if you’re able to.

But ultimately, for many young women, even if they wanted to save, it wouldn’t necessarily be possible right now. “The cost of the living crisis has absolutely affected my ability to save,” says 26-year-old Gemma*. However, the unreasonable financial pressures being placed on many people right now have helped to transform Gemma’s attitude to saving: “I’ve been trying to focus on improving my mental health. Not making unreasonable saving goals has alleviated the pressure that I felt before and the inevitable failure I felt when I didn’t meet those goals,” she says.

“[Not being able to save] is not necessarily always due to overspending or poor money management,” says Bangura. “There are many aspects of money that we have little control over, such as job loss, income reduction, illness, an unexpected bill, an emergency or rising living costs.”

24-year-old Natalie* agrees that the pandemic has helped her to stop putting so much financial pressure on herself: “I was recently told that even with a 20% deposit saved for a house, my salary was not large enough to secure an adequate mortgage loan,” she says. “It made me realise that I may as well enjoy the little money I have as so many young people are in the same boat.”

It seems obvious that putting your life on hold to save for something specific probably isn’t a good idea but this has been how many of us have lived in the past, regularly turning down plans – often to the detriment of their mental health – in order to achieve what is perhaps an unattainable goal, like becoming a homeowner.

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But Bangura stresses that there are many ways to maintain and increase your savings without sacrificing the things you enjoy. She suggests creating a “priority budget” and sorting your income into “priority”, “fixed”, “variable” and “fun” categories. Priority expenses are those that must be paid in order to avoid eviction, disconnection or court orders’ fixed expenses are regular subscriptions that can be cancelled, such as Netflix; variable costs cover recurring expenses, including your TV licence, for example; and your fun expenses can be saved for the things you enjoy.

If you can’t save right now, Bangura also suggests putting plans in place so you are able to save in the future. “Concentrate on how you can earn more money at your current job, find a second job, apply for a higher-paying position or generate a side income through a side hustle,” she suggests.

If you’re not saving at the moment, it’s probably not worth beating yourself up about it. Particularly if, like many women, taking a break from saving during these difficult times is helping you develop a more positive attitude towards your finances, as is the case for Gemma: “There will be times in my life when I will save, but right now it’s not possible without sacrificing the very last strand of my wellbeing. And that’s something that I now feel is actually OK; it’s not a failure,” she says.

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