How should I start saving?

[nras01]

Me and DH are mid twenties. DH has finally secured his dream job and finally earning a decent wage. Due to this I have gone part time and am earning less than £12k a year which is low but with DH wage we can live comfortably and the job I'm in I absolutely love. We currently have 0 savings as have just renovated our first home. DH is going to start paying into his pension but I personally would like to save a bit aswell. Am I better off paying into a pension even with my low wage or better off with a lifetime ISA?

Pension usually best as you get tax relief. But prioritise saving at least 6 months emergency fund you can access immediately. And just be a bit cautious to make sure you’re covered yourself financially, given a big income disparity.

Are you or have you ever been a homeowner? If not and it’s something you aim to do in the future the Lifetime ISA has some advantages.

Oh sorry, you said you’d just renovated your first home so presumably you are. I’d go for building up an emergency fund in that case, before looking at anything more complex,

It depends very much what you are saving for? Retirement? House purchase? Emergencies? If I were you and had no other savings and such little income I would be saving into a cash ISA short term until I had built up a safety net.

I won’t patronise you by asking why you have gone PT in a job that pays very little because your husband has a new job. However, do make sure you are protecting yourself long term for all eventualities. There are enough horror stories on this site everyday to remind us all why this is necessary. If your DH has encouraged you to reduce your wage because of his job, he should be contributing to your savings.

Do you have caring responsibilities/a health condition/studying that mean you can't work more hours to up your income? It's nice you have found a rewarding career but make sure you aren't dependent on your DH income or you are leaving yourself in vulnerable.

Your DH (presume you are married?) is right to prioritize his pension if you are already homeowners but I'm wondering how your finances work and whether you pool finances or keep things separate? Starting a pension young means you can save a smaller amount each month as you have a longer window to save for, are you freelance or employed as if it's the matter your employer should offer a scheme where they contribute as well so you will be better off longer term.

But it's also nice to have medium and short term financial goals, for example you could overpay your mortgage each month if upsizing homes is important to you in future, or save for maternity leave if you hope to have children. Or if there is an amazing holiday in mind you might save for that. The most important thing is to have some shared goals with your DH otherwise you may feel discord if he is locking all his money away for his retirement and you are sharing all your savings for more immediate rewards you both enjoy.

You have not mentioned having a workplace pension, if you are employed I would be making contribution to that as you would get some employer contribution.

Savings I would build up in an instant access cash account. This is emergency fund for anything unexpected to prevent you taking out debt.

I would then look at Stocks & Shares ISA for medium term money, with aim of having it there at least 5 years, ideally longer.

You are young so doing some to pension, some to ISA, tipping the balance more towards the ISA side builds up a pot of money that is accessible as well as some that is not accessible.

UK Personal Finance Flowchart can be useful to work through:

ukpersonal.finance/flowchart/