Why it pays to start saving early
Why should you start saving now?
As a Junior Doctor you may be stretched financially with loans, overdrafts and credit cards to pay back. Saving may be the last thing on your mind but you'll be surprised how quickly your pay will increase over these few years as a Junior Doctor.
It's easy to live beyond your means when you get your first pay slip, especially if you still have the luxury of a low interest rate overdraft. However, this will not last forever, and the best thing you can do is create a budget so you can start repaying your overdraft and any credit cards. This will save you money in the long run and you'll have more to spend on having fun!
How much should I save?
A 24 year old graduate Junior Doctor who retires at 65 will only receive 492 payslips. Every single one counts to make sure you get the lifestyle you want. Saving should not affect your ability to do the things you enjoy, but it will help you buy expensive items such as a holiday or a car.
If like most people you want to own your own home, you'll need to save up for a deposit - the most competitive mortgage rates are only available to those with good deposits, so you need to start saving for this as soon as possible.
You should be comfortable with how much you can save, and this will depend on whether you are saving for long term or short term goals.
In the long term, you should aim to pay off any debts before saving large amounts of money. In the short term, it's recommended that you save three month's worth of wages as an emergency fund; this would help you survive in the short term if unexpected costs come about e.g. replacement of a car, phone or moving home.
How should I start saving?
You may already have a savings account and haven't thought about a Cash ISA. But did you know that when you put your money in an ordinary savings account, your interest is taxed automatically? So for every £1 your savings earn, you only keep 80p. And if you're a higher rate taxpayer, you keep even less.
With a Cash ISA, you don't pay any tax on your interest which means that if you earn £1, you keep all of it.
Saving with Wesleyan
Our Wesleyan Bank Cash ISA makes it easy for you to make the most of your savings.
- No charges for withdrawals
- Interest is paid tax free
- Open an account with just £10.
So if you haven't already started saving in a Cash ISA this tax year, make the most of your Cash ISA allowance and open one today.
If you would like to find out more about the various saving options available, speak to one of our Financial Consultants, as they will ensure that you choose the right saving plan to meet your objectives for both short and long term.