When I first started working in early adulthood I made it a focus to limit my spending.
I was terrified of the hedonic treadmill that would race me to financial ruin. I didn’t want to spend money on things that would make me happy in the short term because I knew it wouldn’t last. We humans have a tendency to remain at a relatively stable level of happiness regardless of our fortunes, and purchases, so I didn’t see the point of spending money on things that would only make me happy for a little while. I ended up feeling guilty when I did spend money because I felt it would be better spent by the future self rather than my current self.
But my scarcity mindset of saving as much as I could did not last: Not when I could see how many opportunities there were to increase my earnings and spend money and still be able to save large amounts for my future. I could have it all, and for a while I did.
Until I didn’t.
Alas, the future is more uncertain and more expensive than you may think. It will always be a balancing act between spending needs and wants, and generating income that makes life possible. And this balancing act can quickly become unbalanaed as circumstances and opportunities change around you.
I’ve been living through a period of particularly changeable circumstances right now, so coming across this new UK “Cost of Life” info-graphic was enlightening.
The data behind the info-graphic predicts the cost of life will rise by 64% in the next 20 years!
(click the picture for more)
Based on the UK’s average inflation rate of 2.5%, British nationals can expect their biggest purchases (and the cost of raising children!) to increase by nearly two thirds within the next 20 years.
The interactive info-graphic reports some surprising and perhaps shocking projections; including the average cost of going through university which is set to increase from £88,700 to £145,000. Other major investments are also highlighted, such as the estimated average cost of raising a child to the age of 21; set to increase from £222,000 to over £364,000.
Are you saving enough for what life might throw at you?
By opening up a savings account and putting aside a little each month, the British public will be better prepared for rising costs and prices. Whether it be opening up a tax free ISA account or putting money away into long term savings, there is never a better time to start than right now.
You don’t have to be scared about spending money, like I was in my early 20s. But you do have to walk through life with your eyes wide open about the expenses that may be up ahead, and this info-graphic provides some perspective.
Can you relate? Tell me in the comments below.