How to plan for a future you can’t see yet
A dream without a plan is just a wish, sounds harsh but it’s true. As children we plan for big weddings, large houses with home theatres and a job which pays millions for a few hours work. But, no-one tells you how expensive life is or why it’s so important to start saving as early as possible. These dreams don’t just appear, they take time and effort.
If you were born between 2002 and 2011 it’s likely that you have a Child Trust Fund (CTF) that was provided by the government. In short, this was adults realising that the earlier children started saving money, the more likely they were to afford things as they got older. Great, right? But now many of these children are adults and have no idea what to do with this cash.
1: The cost of University life
University isn’t the only way to succeed and get a great job, but it is the path that many people choose to help further their career. Newsflash, university is expensive, at up to £9,250 per year (for 3 years) you could be £40,000 worse off (Times higher Education). You can of course get a loan to cover some of this, which you can pay off slowly, but having some money to start you off could be ideal.
2: Gap year
3: Buying a house
4: Wedding bells
5: The cost of children
“Well done you’ve terrified me, I’m never moving out of home”
It’s totally understandable, in 600 words we’ve just spent about £500,000 you don’t have. But here’s the secret, the scary story is less scary when you know what monsters to expect. You can choose how to attack them in advance and be fully prepared.
Here are the basics:
- The sooner you start investing the better, moving your Child Trust Fund to an ISA requires little effort but gives you a great starting point.
- Investing your money instead of spending or putting in a saving account could offer you bigger long term rewards.
- When you invest your BMO CTF, you don’t pay any additional income tax or capital gains tax on any investment profits you may make.
It is worth noting however that investing comes with risk
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested. Tax allowances and the benefits of tax-efficient accounts are subject to change and tax treatment depends upon your individual circumstances.