“I don’t want to leave it in my current account, where I won’t be getting any interest”: I have a new apprenticeship salary and don’t know how to invest or save it wisely. How should I make the most of my money?

Hey Money Minder!

I’m 18 years old and about to start my apprenticeship next month. My new salary will be £21,000 (gross) and I’ll be living at home with my parents. They might ask me for a bit of rent, but I’ll still have some extra cash to spend on fun stuff.

I don’t want to keep all my money in my current account without earning any interest. So, what should I do with it? Should I get an ISA? And what about a credit card? Any advice is appreciated!

Thanks,
Money-Savvy Seeker

Bye for now!

Response from THE MONEY MINDER:

Hello There,

Congratulations on starting your apprenticeship and taking steps towards financial independence! It sounds like you have a well-thought-out plan in place for your new income, which is fantastic. Given your concerns about leaving your money in a standard current account without accruing any interest, opening an ISA could be a wise decision. An Individual Savings Account (ISA) allows you to save money tax-free, providing a better return on your savings compared to a regular account.

Considering your age and financial position, a Cash ISA might be a suitable option to start with. This type of ISA offers a safe and accessible way to save money while earning interest on your balance. It’s essential to compare different ISA providers to find the best interest rates and terms that suit your needs. Remember, the earlier you start saving and investing, the more significant impact it can have on your financial well-being in the long run.

As for getting a credit card, it can be a useful tool for building your credit history if used responsibly. Make sure to research credit card options tailored to your needs, such as ones with low annual fees and manageable credit limits. Remember that a credit card should not be used as a substitute for savings but as a way to build up your credit score while maintaining financial discipline.

It’s always advisable to seek guidance from a financial advisor or conduct thorough research before making any significant financial decisions. Planning for the future and establishing good financial habits early on will benefit you greatly in the long term. Best of luck with your apprenticeship and financial endeavors!

THE MONEY MINDER