Have your grandparents ever ask you why you’ve not settled down and bought a house by 22, or why you don’t have a car? Life has changed a lot over the last fifty years, but sadly expectations have not.
As a millennial, the pressures of society to have a house, a car, be married with three kids by thirty is… terrifying!
But why is that such an unrealistic expectation?
The average wage for a person between eighteen to twenty one in 2020 was seventeen-thousand. When I was nineteen, I received my first salary job as an admin assistant and my salary was thirteen thousand per year. When I say thirteen thousand out loud, I think wow – that was a lot of money when I was nineteen, but honestly… it really wasn’t.
Let’s jump into why money expectations for young people are not realistic!
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Let’s break it down
*I will be using my salary as the breakdown as it was my personal experience. These are also rough estimates of tax as I do not have my exact wage slips.
I worked the full forty hours per week with an unpaid lunch hour. I earned thirteen thousand per annum. I then calculated the tax. In Scotland we receive an eleven thousand tax-free allowance, this has now been moved to twelve thousand.
I paid £400 income tax along with £593 for National Insurance for the year.
Leaving me with £12,007. Now that we have deducted tax, let’s divide the final figure by 12, for each month.
My monthly pay after-tax was £1000.53.
Now let’s break down expenses.
I would get the train to work each day. I was actually unable to find an accurate train price for 2017, so, just for you – I went through my banking to find out exactly how much I paid for my train tickets. Although I had a car, I worked in Glasgow city centre. I was unable to park in the city without paying for parking which was more expensive than the train.
My train fare per month was £166.61.
I also had just purchased my first car. It was a Vauxhall Corsa and my dad had to be a guarantor as I was unable to get the car in my name alone. My car was £150 per month. My insurance on top of that was £111 per month. Totaling my car expenses, not including petrol, to £261 per month. I did look through my transactions to gather a rough estimate of petrol expenses which came to £100 per month.
For my phone bill, I had a contract under my mum’s name as I was unable to get one in my own name. My phone bill came to £52 per month.
I then had my digs to pay for my rent, food, electricity which is nowhere near what it actually should have cost but my parents understood my money troubles. I paid £200 per month.
The total amount of expenses came to £779.61 leaving me with £220 for the month.
I then had to factor in lunch costs at work. If I wanted to go out with my friends, buying new clothes. Then I wanted to save for holidays and events… £220 isn’t a lot of money and sadly didn’t get me far.
The requirements to buy a house (When I was nineteen)
I remember looking at houses, as you do when you live with your parents at nineteen. My jaw dropped. The prices along with the requirements to buy a house were… way out of my reach. Money expectations for buying a house for young people are unrealistic.
Before I could even look at houses, the requirements were as follows:
- A high credit score, preferably in the excellent category. (Experian 961 to 999)
- A down payment. With an average house priced at £200,000 – Halifax announced that their average down payment was 16% which is around £32,900. The minimum house deposit is 5% but averaging at 15% in the UK.
- Your income to loan ratio. On average, UK loans provide a loan that is 4.5x your annual salary. My loan ratio would come to £58,500 which wasn’t going to get me much…
There are a number of other factors to include such as previous debt, solicitor fees etc.
Having my own house was always a dream. I remember creating Pinterest boards of decor that I would have loved. Creating vision boards of colour schemes using magazine cutouts. But sadly it stayed but that, a dream.
Of course, the next option is to either private rent or be placed on the waiting list for a council house. Which again at the age of nineteen with no children is going to be a long time.
Other unrealistic expectations for millennials
A right of passage as a young adult is going abroad for the first time without your family. So, of course, everyone was excited to do it.
I never got to experience going abroad without my family until the age of twenty-three because honestly, I couldn’t afford it. I had other bills that were more important at the time and to be completely honest with myself – I was terrible at saving money.
Living paycheque to paycheque was a normal occurrence and any leftover money from the month before was a little bonus for the next month.
Final thoughts – Are money expectations unrealistic to young people?
My blog post doesn’t even touch on the expenses of further education and the costs that are required to attend college or university. The society we live in at the moment is to have the best things in life, but suffer in debt in the background. Have the newest Balenciagas’ but you can’t eat for the month.
Growing up in my early twenties, I couldn’t afford to buy a new dress for every night out or purchase expensive make-up. Primark and Beauty Savers were my life. At the time, I remember thinking I would never get out of worrying about money – like it was my fault that I wasn’t making enough money or working hard enough. I then decided to get a second job to allow me to enjoy my life a little more, or that was the thought process behind it.
I worked my 9 to 5 job during the week, picking up the odd shift after work. Then, at the weekend I would work Friday and Saturday in a bar, sometimes even a Sunday when I was money hungry. Working on average 60-70 hours per week.
Money expectations for young people are old fashioned and unrealistic. Buying a house or a car along with savings, holidays and life, in general, is incredibly hard and sometimes impossible. Expectations have to change.
What struggles do you face?