For those of you who are not aware, YOLO stands for ‘you only live once’. It is often used to rationalise a hedonistic lifestyle, filled with spur of the moment purchases and experiences, such as last minute holidays and impulse buys.
While it’s often a positive thing to live in the moment, for many people, YOLO is gambling with your financial future.
But while a YOLO attitude may create an adrenaline rush and some great lasting memories, this casual attitude to forward planning can significantly impact your financial future.
Particularly for younger generations, saving for a rainy day – let alone retirement – isn’t high on the agenda. 45% of Britons in their 30s and 40s have stopped any future saving in favour of spending their cash, according to Scottish Widows’ tenth annual Savings Study.
However, saving for tomorrow is the fundamental premise of pension provision, and more professionals need to prioritise the building of your retirement savings.
The reality of living and working in the UK is tough for most people in their 20s, 30s and 40s; fewer people believe they will be able to own their own home, record low interest rates are damaging savings accounts, and most people will have to work beyond state retirement age in order to make ends meet.
Scottish Widows’ survey shows that many people are making efforts to curb their spending, but these are more token gestures than the start of a long-term strategy. For example, a quarter turn the heating off to save money, 22% have sold items online for a cash boost, while 3 in 10 have cut down on buying gifts for friends and family.
Underneath it all, though, most realise that there is a gap between the efforts they are making and amount of money they need to be putting by; a third of 34-49 year olds admit that they are not saving enough for their long-term plans.
If you fall into this category, it is important you acknowledge the situation sooner rather than later, and put your YOLO attitude to one side. The sooner you can put plans in place to save for later life, the greater your chances of living a comfortable life during retirement.
Some things to consider when considering your financial future include:
- Do I have enough money in the bank to cope with an unexpected bill or reduction in earnings, or am I living hand to mouth?
- If I was made redundant or suffered an illness or injury that meant I couldn’t work, would I be able to manage financially?
- Are there significant financial milestones that I need to save for before planning for retirement, such as putting together a deposit for a property purchase?
- Has my company enrolled me into a workplace pension scheme, and is that scheme competitive enough to provide adequate retirement funds?
- How much money would I ideally like to live off in retirement, and do I need to start putting additional funds into a savings account now to afford that lifestyle?
- If I do need a savings account, which financial products will offer me the best return on investment?
These questions can seem daunting when tackled alone, so many people turn to a financial adviser for impartial, knowledgeable support, to help them create a successful strategy for their long-term financial goals.
When you need help with planning your financial future, our professional team can develop a portfolio that’s right for you.
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