People fall into one of four types of saver categories, influenced by the habits their parents taught them as children, claims new research from Scottish Widows.
Results show 62% of adults save little or nothing, with almost half of this group claiming their parents are to blame as they had the biggest influence on their savings habits.
Of the 38% who do save regularly, 57% say they were taught by their parents as a child, with 32% adding their mum was the biggest influence on their savings, 7% more than fathers.
However a third of those surveyed by YouGov, say they taught themselves how to save and didn’t rely on their parents at all, while the research shows only 9% go to mum, and the same to dad for the advice on financial matters, with 19% preferring to ask their partner.
Unfortunately the survey of over 2,000 adults revealed a quarter of adults don’t seek financial advice from anyone, preferring to sort things out on their own, while 47% claimed their savings habits have not improved with age.
Donna Dawson, a psychologist, says as much as we’d hate to admit it, what our parents say and do will shape our savings habits into adulthood, and the research highlights the importance of getting good financial advice from our parents when we are young, as most people can be found in one of four savings types.
- Savvy Saver: likely to be a young woman with a ‘rainy day’ mentality who saves every month, and was taught to save rather than borrow. She saves a substantial amount each month, and is practical and organised about it.
- Pseudo Saver: Most likely to be a middle aged man, who saved money now and again as a child, and continues to do this as an adult. His parents taught him to put money aside for emergencies, and to spend wisely because life is uncertain. Has a tendency to worry about money and distracts himself by shopping around for the “best deal”.
- Goal Saver: Likely to be a younger man or woman who thought saving as a child was a chore to be endured, as they had to save for anything they specifically wanted. They now don’t save regularly as adults, but don’t spend money too freely either, paying for bills and necessities rather than treats. They also shop around for the “best deal” but don’t consider themselves savers.
- Evader Saver: Likely to be a man or woman over 50, they never saved as a child, although their parents told them to save little and often. But their parents were unable to practise what they preached and they “live for today, and don’t worry about tomorrow”. They spend every penny they earn, although they feel slightly guilty afterwards.
Anne Young, savings expert at Scottish Widows, says the research shows a link between parents’ savings advice and our own savings habits, although this shouldn’t be used as an excuse for not saving, as many who were not taught good habits as a child, now save regularly as they’ve grown up.
Although the adults surveyed were not necessarily good savers themselves, 79% believe it is important to teach their children about money, regardless of whether they are good or bad savers themselves, while four in 10 plan on instilling good savings habits in children from an early age.
Young says it is important to try and save something every month, and with the tax year end upon us many people should be thinking about making the best use of tax efficient savings vehicles, such as ISAs and pensions.
She points out society has changed over the past 30 years and with the advent of credit cards and personal loans, the days of saving hard before splashing out on a new car or family holiday are long gone for many of us.
But Young adds: “What hasn’t changed is the need to save and plan for our financial futures, regardless of the savings habits we all have. So whether you’re a savvy saver or an evader saver, now is the time to seek financial advice and take advantage of the tax efficient opportunities at this time of year.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Nyree Stewart on 020 7968 4558 or email [email protected]IFAonline
Speaking at PA360 North
Speaking at PA360 North
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