Hello Guys… I hope you find this post very useful and something to consider for the future.
During your twenties, you will have, arguably, the least amount of responsibility you will ever have in your life. But, as time goes on, you meet “the one,” and get involved in that thing they call adulthood, the practicalities of life tend to rear their ugly heads. Not surprisingly, the big issue we all have is money. Either we don’t have enough of it to support our lifestyle, or we start to think about the major purchases. Let’s get rid of some of the mystery involved in this, and look at the major purchases that you will have to save for, and the best ways to do it.
Not just the very act of buying a house becomes one of those impossible things, but the whole pressure involved in going through the rigmarole of acquiring a mortgage is stressful all in itself. We tend to make a mistake that, by buying a bigger house, this means that we will have more real estate, therefore a better nest egg, and a more comfortable way of life. This is not necessarily the case. You have to look at reasonable mortgage repayments. As well as this, you might find that the house that you want is just out of reach for an almost absurd reason. For example, if you are self-employed, you may very well have all the finances necessary to make the repayments, but there are no banks that will touch you with a barge pole. There are ways around this, such as getting a guarantor, and there are plenty of resources and tools online to help you with this, the Buddy Loans guarantor calculator being one of them.
As a rule of thumb, when you think about the home repayments, you need to factor in the upkeep, taxes, insurance, as well as your lifestyle. Make sure that you don’t bite off more than you can chew. For so many of us now that struggle to acquire a mortgage, our home is a symbol of financial independence. But in fact, there are so many secret payments that you need to factor in as well.
For the numerous struggles couples have to go through to even conceive, it’s hardly a surprise that they want to give their children the best of everything in life. But, this comes with a lot of financial sacrifices. These days, the cost of raising a child to the age of 18 can exceed more than £150,000! These are all-inclusive, from Christmas presents to the day-to-day essentials. And the reality can soon set in, especially after the first couple of years where you found yourself barely breaking even because of insurmountable nursery fees. Saving up in advance it is common sense, but you also need to realise that there will always be hidden payments. There’s a grave underestimation with paying for childcare, which can encompass the cost of school uniforms, food, as well as things like petrol for the car. But you have to ask yourself at the very outset, “what sort of parent am I going to be?” Because you could very well decide to give your children the best in life, but this comes with a lot of debt.
And naturally, there are ways around this, you can sacrifice some of your free time to do additional work, like a side hustle, but there’s got to be that balance. You want to spend time with your children, not necessarily working all the hours under the sun to give them everything they need, but not necessarily have that proper relationship you yearned for. But with every generation comes stories of financial strife. You could argue that the millennial generation are not so financially focused, but there is still that pressure to put a roof over their head. Now, the cost of living increases so much, but without the pay to match it, getting the very basics is difficult for many families. You need to tell yourself what sort of parents you are going to be before you start saving. It’s good to put money into an account for them, but do you necessarily need to give them every time they want for Christmas? Find that right balance.
One of the things that creeps up on us in life is the passing of time. As cliched as it is to say that it all flies by in seconds if you are near the end of your twenties, the very fact that almost ten years have passed by in a flash brings the message home, but as you get older, it will fly by even quicker. As such, your retirement, whenever you envisage that being, is not far away. And there are so many people out there that live off the basic pension, but it’s not enough to give them that quality of life. As such, what do you want your retirement to be? Saving up for retirement isn’t just about going on that cruise you always wanted, or making some big purchases, but it’s about providing for yourself when you don’t necessarily need much later in life.
The big mistake we all make in terms of saving for retirement is that we think we will spend the same amount every month. In fact, as we get older, our needs change, and this means that the very beginning of our retirement is when we will spend the most money. Over the years, it will deplete, but your outgoings won’t necessarily be as much. Realistically, you will have paid for your house, won’t be driving, and your needs will be limited. But the basic pension is not enough. Start to think about what you want your retirement to be like, and save according to that.
These are the three significant expenses in your adult life. Many are shunning the idea of getting a house, choosing not to have children, and plan to work until they drop. But if you want some balance in your life, and you want a home that is yours, family finances, but also an early and happy retirement, the message is simple, you have to start saving. We all think we have loads of time, but the reality is far different.