Financial Planning – The younger generation

I wish I could turn the clock back and tell 20 something me, what 60 aged me knows! We would all benefit from hindsight sometimes, but what would we tell ourselves if we could wind back time?

When we are young, we think anybody over the age of 40 is old!

What do they know? It’s different now!

In a world of social media, instant celebrity, and often false positivity, it is easy to understand why the younger generation think becoming wealthy and well known is easy. And that achieving those things is the answer to everything.

As you get older you get wiser to all of that; and know that for every glossy media story about success there are hundreds more behind the scenes that haven’t made it.

For many young people, they just don’t think about getting older.

What the challenges might be like later in life with more financial pressures, let alone retirement. They focus on the here and now, and, in some ways, that’s no bad thing. Being able to enjoy the moment, and not knowing what the future holds can lead to rich life experiences.

However, we also know what life looks like if you are constantly struggling financially. The impact of having additional responsibilities like a family to support, bills to pay and pressures on our time.

Whilst it is hard to get the younger generation enthusiastic about pensions and saving, there is no doubt that older me wishes younger me knew just how important both are.

Anybody who starts a pension in their twenties will have a much bigger pension pot when they are ready to retire than someone who starts their retirement planning in their forties or fifties. The older you are before you start the more you have to put in to make it meaningful, and still the less you will have for your retirement.

Encouraging them to start slowly with a small amount may be a compromise they are prepared to make. And definitely they need to take up the opportunity to be part of any work pension schemes on offer, even if they are below the required age threshold. It is a very cost effective way of starting a pension, particularly as the contributions from employers can be very generous.

Sit down and talk about the cost of property and the minimum deposit for buying your own home. Plus the cost of running a house. Being able to demonstrate those costs as early as possible helps them to realise how much they are going to need. When they live with you they are cushioned from many of those costs, and most youngsters just don’t appreciate how much everything costs.

Once they understand those costs, it’s a good idea to get them thinking about what they would like life to look like in the next five to ten years. Don’t push them to think about retirement, they aren’t likely to take that seriously. But by getting them to realise what they need to save in order to move out, moving them into a conversation about a regular savings plan becomes easier.

For me, financial planning for the younger generation is all about making it real.

Don’t talk about too far into the future. But also get them to realise that spending every penny they earn is not going to deliver the life they want in the longer term.

If you would like to arrange a financial planning session for your family, please contact me on 01344 85 310.

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financial planning the younger generation
Start getting a return on your life…

First steps: Take your free Return on Life Index assessment