A tale of two twenties!
If you are a parent or grandparent to late teens or early 20’s who are working, please read on!
They will thank you in the long run!
Oyster have always encouraged our clients who have 20 (ish) year old children or grandchildren to speak to them about getting into the habit of regularly saving 10% of their earnings into short and longer term savings.
So as soon as they start working full-time, not part-time where they need every penny but full-time encouraging them to save is a great habit to instil and one that will reap many benefits.
Here are two reasons why from encounters we have recently had.
Scenario 1:
A young self-employed 20 something, young family, great at his chosen profession. Has an accident at work and suddenly he can’t earn or work for 3 months.
Has no savings or for that matter insurance to speak of, really worried and struggling to cover bills during this 3-month period.
Scenario 2:
This time similar age as above, keen to ‘plan for the future’. Just started a new job after college and has no savings at all but wants to discuss investing in property! Great attitude but a few building blocks need to be in place first.
In the first instance illness/disability/accident insurance would be one route for sure.
In both cases if they had the benefit of some savings guidance and financial planning ideas they would both be on their way to both protecting their family and building towards a dream.
Solution:
Encourage your 20 somethings to save 10% of their earnings. Start with immediate cash emergency funds, like a savings account simply linked to their everyday current account. Then once say have an amount equivalent to 3 months bills is reached then leave this sum saved as an emergency.
Then re-direct the 10% into a longer term investment. Something like a Stocks & Shares ISA with the appropriate level of investment risk.
Hopefully this additional longer term sum would not be needed in the short-term but would be available in an emergency like the self-employed scenario. It could act as a safety net if it was required.
Please share with your younger family members they will thank you for it.
Oyster are very happy to have meetings at our expense just to help you encourage your younger family members to do this from as soon as they start work.
If they don’t need the longer term savings in the short term these will build nicely into a sum that can be used in the future for buying a house, rental deposit, furnishing a house or even starting a business.
Contact Michael @ Oyster and we can discuss this with you face to face! 02380 848410 or email enquiries@oysterfinancialplanning.co.uk
