As you get older spending frivolously isn’t necessarily the wisest thing to do. Yes, there is nothing wrong with treating yourself, but there comes a time when you need to start thinking of your future and the money you will need in it. Saving is not only essential for the future but also ensures that you create good habits and build discipline for yourself. You may be thinking of buying a car in the future or maybe buying a house. These situations and many more will require you to save to get there.
To me, I think best way to save is to remove a portion of your income (after paying your bills) and placing it in a savings account. I am going to discuss three types of savings accounts ;
Instant access savings, fixed rate savings and tax-free savings.
Instant access savings allows you to save money whenever you can but also allows you to take it out if needs be with no issues. These accounts also usually have a competitive rate of interest which allows the money you place into the account to accumulate as time goes on.
As convenient as it is to be able to withdraw money whenever you please, it can also be detrimental to your savings as you will rarely see the money grow if you are forever taking it out.
Fixed rate savings usually have better rates than instant access savings, however they also do not allow you to withdraw the money within your account whenever you please. This allows your money to grow along with the additional interest rates added. With these accounts you can choose to save for a fixed amount of time or you can even choose to save tax-free.
Tax-free savings, also known as a Cash ISA is a tax free savings account. There is however a tax free limit which changes with the tax year. Cash ISAs also come in the form of easy access so can be withdrawn whenever or fixed-rate so the rate on the money in the account will be set but you are not allowed to touch the money (some banks also allow you to access the account online.)
There are many resources out there such as http://www.moneysavingexpert.com, books, bank advisors and articles which can help you gather the information you need to save the right way for you.