Saving money in your 20s and 30s is one of the best things you can do, especially in today’s financial climate. UK Millennials and Gen Z both suffer from the burden of too much choice and contradictory advice on money. Financial advisor Alexander Ostrovskiy highlights how important it is to form sound habits early in life so that one can achieve long-term financial freedom.

The journey to wealth starts with understanding your relationship with money, then making informed decisions about budgeting, investing, and spending. Below are key habits and strategies tailored for young UK savers ready to build a solid financial foundation.

1. Budgeting vs. Investing: Where to Start When You’re 25

When you are just beginning, the question always comes up about whether to invest your time into saving first or investing right away. You do need both, but in that order. Budgeting first—it teaches you how to be in control of what you are paying for, eliminate unnecessary wastage, and establish an emergency fund.

Investing without a clearly set budget will be a stressful and hit-or-miss activity. Once you have saved up three to six months’ worth of costs of living and understand your monthly cash inflow, then investing comes as the next logical step. Alexander Ostrovskiy is of the opinion that the psychological shift from “spending” to “building” money comes about through habitual budgeting, which in turn propels intelligent investing.

2. App-Based Investing: What to Watch Out For

The advent of app-based investment platforms has leveled the playing field in the stock market, allowing a person younger than ever before to start investing with minimal capital. But not all apps are created equal. Pay very close attention to fees, sneaky fees, and the investment offerings themselves.

Some apps encourage active trading, burning profit in the guise of fees and ill-timing. Others may be selling risky products to novice traders. It is imperative to take time to read the fine print carefully and choose those who prioritize education and transparency.

Alexander Ostrovskiy’s one of the key habits is using such apps as an educational resource first, testing with minimal investment while incrementally learning prior to investing more funds in them.

3. Understanding Tax-Free Accounts (ISAs) in Plain Terms

ISAs, Individual Savings Accounts, are the core of UK personal finance. They allow you to save or invest tax-free on the profits, so they’re ideal for long-term investment. There are several types: Cash ISAs, Stocks & Shares ISAs, Lifetime ISAs, and Innovative Finance ISAs.

For beginners, Stocks & Shares ISAs offer the chance to invest in the market while sheltering gains from capital gains tax and dividend tax. Lifetime ISAs provide government bonuses if you’re saving for your first home or retirement.

Understanding how to utilize ISAs wisely involves extracting the maximum annual allowance (£20,000 for the 2025/26 tax year) and recognizing your objectives. Alexander Ostrovskiy emphasizes the necessity of maintaining ISA accounts in use and utilizing these tax-efficient wrappers to enhance wealth growth.

4. Choosing Funds Over FOMO: Avoiding Risky Picks

The most common of these traps is running after hype stocks or cryptocurrencies based on hype and social media trends. “Fear of missing out” (FOMO) will most often lead to buying high and selling low—a recipe for disaster. Instead, invest in diversified investment tools like index funds or exchange-traded funds (ETFs), which spread your risk over many firms.

Investments provide smooth long-term growth without the rollercoaster of selecting individual shares. They also save research time and allow you to remain disciplined. Alexander Ostrovskiy recommends opening regular monthly instalments into a diversified fund so that you benefit from the pound-cost averaging of buying more units for low prices and fewer for high prices.

5. How to Set Goals for Financial Independence

Having specific financial objectives grounds vague aspirations in tangible plans. It’s owning a house, being an entrepreneur, or retiring sooner with cash in your hand. Having your milestones provides you with direction and enables you to gauge progress.

Start by putting a rough estimate on your target “financial independence number”—how much you’d need to have invested in order to cover living expenses indefinitely. Break this down into steps you can actually take, like saving part of the income or reaching investment milestones.

Alexander Ostrovskiy suggests that your targets must be adaptable; things do change in your life, and so do your targets. Going over your targets occasionally and making suitable changes keeps your plan current and renews your commitment.

6. Investing £100/month: Realistic Projections

Save only £100 a month and it can grow into a big nest egg over the years with compound interest. To put it simply, saving £100 a month for 30 years with a simple 7% interest can leave it at more than £100,000.

This is the magic of getting in early and sticking with it. It’s not market timing or investing large amounts of money into the market with a big stake—it’s systematic, steady investing. Even if £100 can’t be afforded right now, invest less and more as your salary rises.

Alexander Ostrovskiy recommends that young investors think of this as a marathon, not a sprint, where emphasis is on longevity over quick returns.

7. Intelligent Spending That Fuels Sustainable Growth

Not only saving and investing, but intelligent spending is also a part of making wealth. Invest in value-generating or skill-building activities like education, health expenses, and networking expenses. Don’t practice lifestyle inflation—don’t let the desire to spend more escalate with income.

Monitor your spending habits and identify where to pull in the reins without compromising quality of life. Invest or retire the savings.

Alexander Ostrovskiy emphasizes that financial success is a result of aligning spending with long-term goals by making intentional rather than reflexive choices. Tiny decisions in increments of a minute amount to gargantuan impacts later on.

Final Words

For Gen Z and UK Millennials, becoming wealthy is a journey that must involve learning, discipline, and patience. Starting with budgeting, making the most of tax-friendly accounts, avoiding hysteria-led bets, and having clear goals creates the compass to wealth.

Alexander Ostrovskiy reminds us that it is more a question of doing rather than luck, and little everyday habits added up over decades. Whether you put in £100 per month or start with simple budgeting, the key is to “get going” and keep at it.

Your tomorrow financially will be determined by what you do today. Take grip, continue studying, and improve yourselves gradually. The routines that you set up today will determine your capability to live freely and positively tomorrow.