February 13, 2017
Children of the Late Eighties (and Nineties) - we’re with you, 100%.
We know you don’t spend hours playing Pokemon (not that you would, seeing as it’s so passe these days). We know you are not secret Rich Kids of Instagram. We know that you have jobs, you work hard, and you want to make your mark on the world. As your parents did before you.
It is easy to become disheartened. It’s been a fairly tumultuous (read: rubbish) this year so far. We’ve lost Prince and Bowie, we face an uncertain political future, and a madman appears to be in control of the White House. These are things we can’t control - and there are far more pressing issues closer to home. Costs are rising, the average deposit for a house in the UK is £33,000, and if you’ve just graduated, you’ll leave uni with around £40,000 of debt.
You can blame who you want for this unfair system, but it exists - and unless you look after yourselves now, it’s only going to get worse. The reason? This system kicks in when you’re in your late teens.
It all seems to start at uni. The average student spends an extra £250 a month, which is either covered by parents or part-time work. This is understandable. Nobody wants to budget at uni; you want to go out, have fun, eat well and look good. But when you graduate, there’s an extra £9k on top of your student loan debt to contend with.
So, you graduate, and you start work - earning £20,000 in an entry-level position (your degree in English Literature didn’t lead to a six-figure salary at Penguin, surprisingly). The average young person has just £156 left over for ‘fun money’ at the end of the month, and 30% of Millennials use credit cards to cover monthly essentials, such as travel.
To top it all off, experts have suggested young workers should be saving in excess of £600 a month to prepare for a comfortable retirement. That’s after you’ve paid off your student loan, and the loan you needed to carry you through uni. In a recent survey conducted by NOW Pensions, young people reckon they will retire with savings of £95,000, despite around three fifths not having started putting money towards pension yet. Oh, and one in five older Millennials doesn’t want to retire at all.
This is not realistic. Deep down, you must know that this isn’t the kind of situation you can cross your fingers, shut your eyes, and wish your way out of. However, there’s a way out. The trick is to accept what we’ve just told you - and stop the bleeding.
The first thing - the best thing - you can do is pay off your debt. We’re not talking student loans - we mean credit cards, payday loans, store cards. The stuff that really gets a hold on you quickly. That’s what’s costing you the most - and once you’ve aggressively tackled that, you can get a clear, honest picture of what you earn, what your outgoings are, your incomings, and how you can start thnking about what's next. One step at a time.
This will not be an overnight project. It may take time to get your ducks in a row and start seeing your future come together, but as long as you’ve recognised your situation and you’re building your game plan, that’s OK. The absolute worst thing you can do is ignore the situation, and spend your way to fleeting happiness. You can’t bank on an inheritance. You won’t win the lottery. Your future depends on you.
You may think you’re going to die at 30, and there’s no point in planning for a future. Why not enjoy yourself now? The fact is, unless you are a reckless extreme sports enthusiast, you probably won’t die. It’s scary to think about the future, but it’s even scarier when you get there and there’s nothing waiting for you.
It doesn’t matter how little you’ve got. What matters is that you know you can make your money work for you, and that you’re in control - and the sooner you do that, the better everything will be.