How to build the life you want
Wondering how to get from where you are to where you want to be? Money journalist Clare Seal shares her tips on planning for the future
We all have an idea of the life that we’d like for ourselves in the future, right? From what we want to do in our career and the kind of house we’d like to live in, to where we’d like to travel to and the kind of car we’d like to drive. But the thing we don’t always think about soon enough is how we’ll be able to afford that lifestyle, because having a happy and fulfilled life is difficult if you’re battling money worries. Our earning potential in our chosen career, along with the spending and saving habits we develop, are key to making that dream a reality - so it’s a good idea to make a plan early on.
1. What kind of lifestyle will make you happy?
It’s a big question to ask, but one that you probably do know the answer to if you really think about it. Some people dream of travelling the world, some of owning their own business, others of having a family. There’s no reason that you can’t do lots of these things, but understanding your ambitions and making a plan will help you to see what kind of salary you’ll need to earn to fund it.
Do a little research: look at house prices and rent rates in the areas you’d like to live in, check out flight prices and visa requirements for the countries you’d like to visit, and look into average salaries for the career you’re keen on.
It’s also fine to be flexible in your planning! Very few people have it all figured out in their teenage years, but approaching your future with some goals in mind is a great idea. Try creating a brain map for your future self, using words and doodles to paint a picture of the life that you want, then write down one short-term and one long-term goal to support your vision.
2. How much can you earn?
Before you fully commit to a career path, it’s a really good idea to make sure that you know how much you might be able to earn, so that you can make sure it’s compatible with your life plan; and if it isn’t, you can adjust your expectations on one thing or another to make things work.
According to Save the Student, the average graduate salary is just over £24,000, but it really varies from career to career, and there can be a big difference in what you can earn in London or outside the capital.
3. Is it a good idea to borrow money?
Once you turn 18, options open up for you to borrow money in lots of different ways, and that can be really tempting. When there’s something you really want, saving for it can seem boring and tedious, so borrowing the money and paying it back – ‘reverse-saving’, if you like – might seem like a better way to do things. You get what you want up front, but you can be left paying for it (plus interest) for months or even years.
What’s more, if you don’t keep track of the money you’re borrowing in an overdraft, or by using a ‘buy now, pay later’ product or credit card, things can easily get out of control and you can find yourself with debts very early on in life. This can affect your financial confidence and your credit rating, as well as costing you a lot of money in interest. Some forms of borrowing, like your student loan or a mortgage, are very normal, and using a 0% interest deal to spread the cost of a big purchase can be very useful. Just make sure you borrow money with your eyes wide open, and with a clear plan for paying it off.
4. What’s a financial safety net?
It’s really good for your mental health and feelings of security to have a small financial cushion to see you through any tough times, like if you have an unexpected bill or a period of not working. This is usually a pot of savings in an account that’s easy to access, so it’s a great idea to save some of any money you might earn from working or that you’re gifted by family.
Asking family or friends for money when you need bailing out can feel awkward, and having some savings of your own will help you to feel confident and self-sufficient as you become financially independent.
5. Do you know what value is?
Money isn’t just about how we earn it, borrow it and save it – it’s also about how we spend it! When you start earning your own money, it feels really great to be able to spend it on the things that you want and enjoy. It’s important, though, to make sure that you actually do want them!
Sometimes, FOMO and social media trends drive us to buy things that we don’t necessarily even like, and impulse purchases can leave us feeling guilty and annoyed about wasting money. Having a good relationship with money means spending consciously on things and experiences that we really love and will cherish. So think before you spend, and ask yourself: is this good value for my money?