One of the basic rules I taught my children was that from an early working age you should aim to save 10 per cent of your income. Follow that, and providing you invest conservatively, you can be sure of becoming moderately wealthy later in life.

It’s difficult to keep to such a target, especially in the earlier years when you are equipping a home, upgrading your lifestyle, and probably raising and educating children. But to the extent you can approach that target, you increasingly secure yourself and your family against financial setbacks, improve your personal freedom, and provide for a worry-free retirement.

One of the most important moneycraft lessons is to understand the power of compounding – how much a small improvement in rate of return on an investment held for the long term burgeons into enormous capital gain.

Spending control is, for many people, the most difficult part of personal financial management. Research suggests that the urge to spend, or refrain from doing so, is rooted in our genes and is little influenced by upbringing. That’s why you see such different attitudes towards thrift in your children, siblings and other close relatives.

David Fuller's view

Here is the full issue of On Target.

Unless one is undisciplined, it is far easier to save if one is able to earn more than is required for family life.  Unfortunately, this is not easy for most families, given the costs of purchasing or renting a home, raising children and paying for their education. 

However, if you have surplus funds, saving can be combined with enjoyable spending by decorating your home with pleasing works of art.  This usually requires some knowledge of what you are collecting, which does develop over time.  These assets will provide a personal yield of satisfaction, rather than dividends for the bank account.  Nevertheless, sensibly chosen works of art have a good chance of holding their value, and actually appreciating if fashion favours some of your choices over time.