As the father of a daughter in her early twenties, I’m extremely aware of the challenges young professionals face when trying to leave home, get on the property ladder, save for a wedding or start a family.
Rising housing costs, significant student debt, increasing living expenses and the eye watering costs of weddings all contribute to the financial pressure.
These factors often lead to the delay of important life milestones like homeownership, marriage, and parenthood.
However, despite these challenges, it is entirely possible to achieve these goals with the right financial knowledge and planning.
The key lies in understanding how to manage the money you earn and how to make informed decisions about saving, spending and investing.
My mission is to inform young professionals of the essential steps to navigate these financial challenges. I’m looking to do this through lunch and learn sessions to employees. More of that at the end.
Here’s a taster of some of the steps I’ll be sharing and if like me you have children in the 25 – 35 age group this is also for them.
How to Use Your Earnings Effectively
Managing your earnings is crucial for achieving your goals. Money can be complex, but fundamentally, it comes down to earning, spending, owing, and saving. By mastering these basics, you can take control of your financial future.
- Earn: Understand your income and how taxes, pensions, and investments impact what you take home.
- Spend: Differentiate between essential spending and discretionary spending to identify areas where you can cut costs and save more.
- Owe: Manage debt wisely, such as mortgages or loans, ensuring that you understand the costs of borrowing and how to repay efficiently.
- Save: Build a habit of saving regularly, whether through bank savings accounts, ISAs, or other investment vehicles, to ensure you have the funds needed for a deposit, a wedding or starting a family.
Saving for Major Life Events
Saving for a deposit, a wedding, or future family expenses can seem daunting, but with a clear strategy, it becomes manageable. Start by analysing your monthly cash flow, identifying potential savings and choosing the right savings vehicles. For example:
- Cash ISAs: Provide a safe, tax-free way to save, though returns may be modest.
- Stocks & Shares ISAs: Offer potentially higher returns, with some risk, making them suitable for longer-term goals like property investment or retirement.
Moving out of Home
Many young people aspire to leave home and gain their independence, eager to establish their own lives and take the next step toward adulthood. However, the reality of financial dependency on their parents, coupled with the high cost of living, has made this transition challenging for many.
One of the first steps is understanding the different types of property ownership. Whether you’re considering freehold, leasehold, or shared ownership, knowing the pros and cons of each can help you make a more informed decision about where and how to live. For example:
- Freehold: You own the property and the land outright, giving you long-term security.
- Leasehold: You own the property for a set period but not the land, often with additional costs like ground rent.
- Shared Ownership: Allows you to buy a portion of a property, making it more affordable initially, with the option to increase your share over time.
Securing your first mortgage is a significant milestone that can feel both exciting and overwhelming. Understanding how mortgages work, including how much you can borrow based on your income and the importance of a solid deposit, is crucial in making informed decisions and successfully stepping onto the property ladder.
Discussing your situation and requirements with an expert mortgage broker such as Nicci Pegg at Prolific Mortgage Finance Limited who knows all the products on the market, can be the difference between success and disappointment.
Please note, Corfe Wealth Management do not provide advice on mortgages. Your home maybe repossessed if you do not keep up repayments on your mortgage.
Making Your Dreams a Reality
While the challenges may seem significant, with careful planning and a good understanding of your finances, it’s possible to move out of home, get on the property ladder, propose to your partner and plan for a family. The key is to start early, stay informed and make smart financial decisions that align with your long-term goals.
By taking control of your finances today, you can turn what once seemed out of reach into achievable milestones on your journey to building a secure and fulfilling future.
Can you help me please?
There is a sad lack of financial advice accessible to the younger generation. Education about money matters and financial wellbeing is key if we are to help young professionals achieve what they deserve.
I intend to use my decades of financial planning experience to help the younger generation by offering a short presentation at lunchtime.
The title I’ve come up with is:
Making Your Move: Using Your Income to Turn Home, Marriage and Family into Reality
So, if you’re a business owner or you know a business owner who’s proactive in helping their employees and would be interested in supporting their financial wellbeing by arranging for me to come and share this potentially life changing information to their staff during their lunch break, I’d love to hear from you.
You can email me or call on 01372 275098. I’m most grateful for your help.