Ah to be young again... so full of potential and mistakes yet to be made...
Seriously the only problem with saving from a young age is that, at that age, there's usually not a lot of spare money to be had to pad your nest with.
So that leads to two real-world recommendations:
1. Second-hand stuff is fantastic: I talk about second-hand cars, houses, furniture (if your bum is an accurate diagnostic of carpentry) and other 'expensive' stuff. The allure of 'brand-spanking new' stuff can be gotten a bit later (10 years is a bit later) when you've got the savings and the better income. And a bit later the "new stuff" will not be "New Citi Golf...." but a "New Honda S2000"... or actually a decent second-hander S2000 in good nick because once you're in the habit of being an expert in what it is that you're buying (so you can spot a good buy), it's thankfully a hard habit to shake.
2. Endowment policies I have a fondness for and have come in handy and they work as a nice surprise gift for later. It's like a forced payment savings account and once again, it gets you into a good habit of setting some small sum aside for savings. The maturity periods are usually 5 years and up meaning it's not a contingency reserve but a form of piggy bank savings.
I have found that savings do NOT come from giving your money to someone else to hold, in the faint hope that they will somehow make it grow faster than inflation.
Savings comes only from NOT SPENDING MONEY! And also not paying a banks interest charges, all for the sake of being recklessly impatient (called buying on credit) when you're still young.
Final word. Always set aside what you can afford and not what the insurance salesmen say you must. And once you've decided on what that amount is, set it aside and discount it as a form of spending. Resist the temptation to include these savings / investments / annuties into your mental bottom line when making important decisions like whether or not to splash out. Always work with what you got NOW.
