Difficult to make regular saving?

A young person told me that his salary is not enough. He has to pay back a university loan. He finds it difficult to make regular saving. What is my advice?

I replied that his priority should be:

- be frugal and modest in his expenses
- repay his university loan in installments
- make regular saving of 10% to 15% of his salary

After that, he can use any spare saving for travel, entertainment and other expenses. He should avoid taking a loan for a car or other major expenses, as the interest charges are high.

It is important to have regular saving now, when he has a job. In the future, jobs will be less certain. He may be retrenched or the company may close down. At that time, he will have to draw down on his savings.

The best way to invest the saving is in a flexible plan, such as a ILP (investment linked plan).

I hope that this advice is useful for other young people.