The Time is Now: Why Millennials and Gen-Z Should Start Planning for Their Futures Today

Written by Fraser Stewart
Reading time 8 minutes
The Time is Now: Why Millennials and Gen-Z Should Start Planning for Their Futures Today image

As a member of the millennial or Gen-Z generation, you may be feeling the pressure to succeed in a rapidly changing world. With technology advancing at a rapid pace and the future uncertain, it's more important than ever to take control of your future and start planning for what's to come.

One of the key reasons why millennials and Gen-Z should start planning for the future now is to take advantage of the power of compound interest. When you invest money, it has the potential to grow and earn more money, which is known as compound interest. The earlier you start investing, the more time your money has to grow and the more potential earnings you can accumulate. For example, if you start investing £100 per month at the age of 25 and earn an average annual return of 8%, you will have over £600,000 by the time you reach retirement age. On the other hand, if you wait until you are 35 to start investing, you will only have about £260,000 by the time you reach retirement age, even if you invest the same amount per month. By starting early, you can take advantage of the growth potential of the stock market and other investments, and build wealth over time.

Another reason to start planning for the future now is to protect yourself against the risks and uncertainties of life. Life can be unpredictable, and it's important to take steps to protect yourself and your loved ones against potential setbacks. This can include creating a will or trust to ensure that your assets are distributed according to your wishes, rather than being determined by the state. Additionally, making arrangements for long-term care in case you need it can provide peace of mind and ensure that you are able to receive the care you need as you age. By taking steps to protect yourself against the risks and uncertainties of life, you can provide for yourself and your loved ones now and in the future.

In addition to the financial benefits, early planning can also provide peace of mind and help you feel more in control of your future. When you make decisions and take action now, you can avoid feeling overwhelmed or unsure about what the future holds. By planning for the future, you can set goals and create a roadmap for achieving them. This can give you a sense of direction and purpose, and help you stay focused and motivated. Additionally, by making arrangements for things like healthcare and end of life care, you can ensure that your wishes are carried out and your loved ones are taken care of in case of an emergency. Overall, early planning can help you feel more confident and secure about your future.

If you're not sure where to start when it comes to planning for the future, there are many resources available to help you. You can talk to a financial planner or advisor who can provide personalized advice and guidance. Reading books or articles on personal finance can also be a helpful way to learn more about investing, budgeting, and other important topics. Some popular books on personal finance include "The Total Money Makeover" by Dave Ramsey, "The Simple Path to Wealth" by JL Collins, and "Your Money or Your Life" by Vicki Robin. There are also many online resources and tools available, such as budgeting apps and financial calculators, that can help you make informed decisions and take control of your finances. By accessing these resources, you can gain the knowledge and tools you need to plan for your future.

Our tips to prepare for the future

Start investing early

Start investing early and consistently to take advantage of the power of compound interest. Investing is the process of putting money into assets, such as stocks, bonds, or real estate, with the goal of earning a return on your investment. When you invest, your money has the potential to grow and earn more money through interest, dividends, or capital gains. This is known as compound interest, and it can help you build wealth over time. By starting to invest early and consistently, you can take advantage of compound interest and maximize your potential returns.

Create a budget

Create a budget and stick to it to gain control of your finances and save for the future. A budget is a plan for how you will spend and save your money. It can help you track your income and expenses, identify areas where you can cut back, and prioritize your spending. By creating a budget and sticking to it, you can gain control of your finances and free up more money for savings and investments.

Pay off high-interest debt 

Pay off high-interest debt, such as credit card debt, to free up more money for savings and investments. High-interest debt, such as credit card debt, can be financially damaging because it accrues interest quickly and can be difficult to pay off. By paying off high-interest debt, you can reduce your monthly expenses and free up more money for savings and investments. This can help you build wealth and improve your financial security.

Build an emergency fund

Build an emergency fund to protect against unexpected expenses and reduce financial stress. An emergency fund is a savings account set aside for unexpected expenses, such as a medical emergency or car repair. By building an emergency fund, you can protect yourself against unexpected expenses and reduce financial stress. This can give you peace of mind and help you feel more prepared for the future.

Create a will 

Create a will or trust to ensure that your assets are distributed according to your wishes. A will or trust is a legal document that outlines how you want your assets to be distributed after your death. By creating a will or trust, you can ensure that your assets are distributed according to your wishes, rather than being determined by the state. This can provide peace of mind for you and your loved ones, and ensure that your legacy is carried out according to your wishes.

Make end-of-life arrangements

Make arrangements for end of life care, including advanced care planning and final disposition. End of life care refers to the medical and personal care provided to individuals near the end of their lives. This can include things like pain management, symptom control, and support for emotional and spiritual needs. By making arrangements for end of life care, you can ensure that your wishes are carried out and your loved ones are prepared to provide care. This can include advanced care planning, where you discuss your preferences and make decisions about your care with your healthcare provider, and final disposition, where you make arrangements for your funeral or cremation. By making these arrangements in advance, you can provide peace of mind for yourself and your loved ones.

Make a long-term care plan 

Make a plan for long-term care in case you need it in the future. Long-term care refers to the medical and personal care provided to individuals who have chronic illnesses or disabilities. This can include things like nursing home care, assisted living, or in-home care. By making a plan for long-term care, you can ensure that you will receive the care you need if you become unable to care for yourself. This can include researching options and costs, discussing your preferences with your loved ones, and making financial arrangements to pay for care. By making a plan, you can provide peace of mind and ensure that you are prepared for the future.

Set financial goals 

Set financial goals and create a roadmap for achieving them. Financial goals are specific, measurable, attainable, relevant, and time-bound targets that you set for your money. They can include things like saving for a down payment on a house, paying off credit card debt, or retiring by a certain age. By setting financial goals and creating a roadmap for achieving them, you can stay focused and motivated, and make progress towards your financial objectives. This can help you build wealth and achieve financial security.

Educate yourself

Educate yourself about personal finance and investing to make informed decisions. Personal finance is the process of managing your money and making decisions about spending, saving, and investing. It involves understanding how money works, how to budget and save, how to invest, and how to protect yourself against financial risks. By educating yourself about personal finance and investing, you can gain the knowledge and skills you need to make informed decisions and take control of your finances. This can help you build wealth and achieve financial security.

Seek advice

Talk to a financial planner or adviser for personalised advice and guidance. A financial planner or adviser is a professional who can provide personalized advice and guidance on managing your money. They can help you assess your financial situation, set goals, create a financial plan, and make recommendations for investments and other financial decisions. By talking to a financial planner or adviser, you can gain access to expert advice and support, and make the most of your money.

Maximise pension benefits

Take advantage of employer-sponsored pension plans to save for the future. Consider contributing the maximum amount allowed by your employer to maximize your savings and potential employer matching.

Start a side hustle

Consider starting a side hustle or freelance gig to boost your income and savings. A side hustle or freelance gig is a part-time job or business that you can do in addition to your regular job. By starting a side hustle or freelance gig, you can earn extra income and boost your savings. This can help you reach your financial goals faster and improve your financial security. There are many opportunities for side hustles or freelance work, such as writing, editing, photography, tutoring, or consulting. By pursuing a side hustle or freelance gig, you can earn extra money and gain valuable experience.

Consider a savings account

Take advantage of tax-advantaged savings accounts, such as ISAs, to save for the future. Tax-advantaged savings accounts are special types of accounts that provide tax benefits to help you save. Examples of tax-advantaged savings accounts include Individual Savings Accounts (ISAs). By contributing to these accounts, you can save money on taxes and build your savings faster. It's important to research and compare the different types of tax-advantaged savings accounts to find the ones that best fit your needs and goals.

Utilise employee benefits

Take advantage of employee benefits to save money and protect yourself. Be sure to review your options and make the most of the benefits your employer offers.

Diversify investments

Diversify your investments to reduce risk and maximize potential returns. Diversification is a strategy for managing risk by investing in a variety of assets, rather than putting all your money in one place. By diversifying your investments, you can reduce your exposure to risk and increase your chances of achieving your financial goals. This can include things like investing in different types of assets, such as stocks, bonds, and real estate, and investing in different sectors and industries. By diversifying your investments, you can potentially maximize your returns and minimize your risks.

Build your credit score

Keep an eye on your credit score and take steps to improve it, such as paying bills on time and reducing credit card balances. Your credit score is a number that reflects your creditworthiness, or how likely you are to pay your debts on time. It is based on information in your credit report, such as your payment history, credit utilization, and the types of credit you have. By keeping an eye on your credit score and taking steps to improve it, you can potentially qualify for better interest rates on loans and credit cards, and save money on interest. This can include things like paying your bills on time, reducing your credit card balances, and avoiding applying for new credit unnecessarily.

Consider disability insurance

Consider purchasing disability insurance to protect against the loss of income due to illness or injury.

Review insurance coverage

Review your insurance coverage regularly to make sure you have the right amount and type of coverage for your needs.

Take care of yourself

Take care of your physical and mental health to improve your overall well-being and increase your ability to plan and prepare for the future. This can include things like exercising regularly, eating a healthy diet, getting enough sleep, and seeking help for mental health concerns. By prioritizing your health, you can improve your quality of life and be better equipped to handle the challenges and opportunities of the future.

In summary

The time is now to start planning for your future. By taking control of your finances and making smart decisions, you can set yourself up for success and build a better future for yourself and your loved ones.

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