Milestones? Money? Meticulously mapping out life’s journey? If this triple threat of contrived alliteration is enough to bore you to sleep, then we should warn you; middle age might come as something of a wake up call.
Here’s the rub; life isn’t all smooth sailing, and sometimes, it comes at you fast. And oftentimes, in your blind spot. There are certain things that you should be saving for in life, regardless of whether or not you see them on the approach. Nostradamus, you are not. Crystal ball, you don’t have. Prophesying, you haven’t yet mastered.
As we said, life moves fast; one minute you’re saving for a wedding and a baby and the next you’re making plans for funerals and working out your expenses for your retirement. But whilst you can’t predict exactly what the future holds, you can be prepared for anything life throws at you by putting away a little each month, in case of the following; these 6 milestone events in your life which you should be saving for.
A WEDDING DAY
The average cost of a wedding in the UK, as of 2021, stands at £30’000 according to Grazia. And whilst some can expect help with costs from their parents, many will need to fork out the majority of that 30K from their own pocket. Of course, the amount you put aside each month depends on when you envisage your wedding day being. Anticipate that you’ll be getting married in five years time, for instance, and you should be putting aside £500 each and every month of that time period in order to afford the thing.
And if you never plan to get married, you should still consider the fact that your children might. Which brings us onto…
HAVING CHILDREN
The UK is suffering from something of a conception crisis. With no evidence of coronavirus leading to the much talked up ‘baby boom’, the London School of Economics has, in fact, predicted a ‘baby bust’ in the near future, saying that ‘’this particular health emergency has been one of the most severe economic crises of the last century, with such events always being followed by a decline in fertility rates.’’
Whilst we wouldn’t want to contribute to these grim forecasts, in the modern era, the average cost of having a child in the UK is astronomically high; according to Money Dashboard, the little one will set you back £11’500 in the first year alone. Though some government support is available for single parents, it does also pay to put some money aside each month to help lighten the load of your new arrival.
A BROKEN BOILER
Yep, we’re really drilling down into the mundane aspects of middle age now, but a broken boiler isn’t something to be scoffed at or, worse, ignored. That would only lead to months of freezing cold showers and a general sense of malaise. On average, a new combi boiler in the UK will cost on average anywhere between £1’600 and £3’500, plus upwards of £500 in installation fees, new insurance and the rest.
You can mitigate the danger of this sudden expense by having yours serviced regularly. What’s more, the government may provide financial support in replacing your old boiler should you opt for an energy efficient version under their Green Homes Grant scheme.
BUYING YOUR FIRST HOME
Getting on the housing ladder has become increasingly difficult in the past eleven years, but with the UK government’s stamp duty relief and their Help To Buy scheme extension, you may not need to save up quite as much as you thought to buy your first home.
In the scheme, you can ‘’borrow a minimum of 5% and up to a maximum of 20% (40% in London) of the full purchase price of a new-build home.’’ In theory, all you need is a 5% deposit, with the breakdown on a £200’000 property looking something like this:
- 5% deposit (£10’000)
- 20% equity loan, provided by the government but repayable with interest (£40’000)
- 75% mortgage (£150’000)
You do still need to be accepted for a mortgage, however, which has become increasingly difficult due to the global pandemic’s effect on the public finances.
Better start saving for that £10’000 and the money to prove you’re financially secure enough for a mortgage, then.
YOUR RETIREMENT
We’re playing the long game here. We’ve sorted out our boiler, bought a house for it, and conceived a child just so we can saviour the experience of saving up for their wedding. Now, it’s time to focus on the financial burden of retirement.
Here’s some good news after an increasingly worrying list of financial projections; many people actually overestimate how much they’ll need for retirement, with a comfortable retirement achievable on around £19’000 a year, according to Which. To achieve this level of security, experts recommend you pay at least 10% of your annual salary into a pension pot.
Of course, a dignified, independent retirement isn’t only about money. Check out our 5 steps to helping elders live a more meaningful retirement for some useful advice on the subject.
