Stop throwing money away!

In  today’s economic climate it seems it just gets harder and harder for young people to find stability and start to build their families. It’s a problem which affects young people in many corners of the globe and poses a major challenge to our societies with the prospect of an ageing and declining population, delayed retirement, reduced pensions amongst the most worrying impending problems.

In most developed countries, youngsters are heavily encouraged to seek further education or training after they graduate from school, in order to avoid having to take a “dead end job”. Many are pushed by their well-meaning but ill-informed parents to pursue a university education. This is a decision which should be very thoroughly thought through. Unfortunately, many employers will only take on recruits who have a degree. If you are going to get a top degree in a hard subject from a top university, it’s highly likely that you’ll be able to pay off the debts you take on and be able to get a mortgage and even eventually, save money. The same applies to those who are pursuing a vocational qualification, specifically required by employers. However, if you are anything like the majority of students, you’ll be getting into serious debt in exchange for a piece of paper which will qualify you for nothing whilst rendering you overqualified for many jobs. It’s not having that kind of degree that’s your problem, it’s the debt that goes with it.

Wily youngsters and those who think out of the box find ways around this problem. Many will choose to study in a country where further education is heavily subsidised or much cheaper. In doing so, they also benefit from the opportunities to become fluent in another language, experience a different culture and become more mature and worldly people – all qualities which employers value at least as much as any degree.

Another smart option, especially for young people who have often been told they are not smart, is to join the military. This experience varies by country and by branch but you’ve a good chance to travel, build your self-discipline, confidence and leadership skillswhilst getting your salary and your training paid for. I remember one good friend of mine who joined the navy at 16, left at 30 with a house, a car, a family, a degree (paid for by the Navy) and a deluge of lucrative job offers from major multi-national companies. At the same time many of his schoolmates were struggling to pay off their debts, pay their rent and have enough money left to feed themselves each month.

If you’ve just graduated from university and you’re about to move to the big smoke to earn your first pennies and start paying rent and debt repayments – wait a moment. There is a better way. You can travel, live in another country, pay no rent, learn another language and pay off your student debts. How? Well, now you’ve got a degree, it opens the door for you to teach conversational English abroad. Countless graduates spend a year or two in Japan, Korea (and increasingly in China and Vietnam) getting paid to have structured chats with students. When the weekend comes, instead of counting their pennies to see whether they have enough for a pint down the local, they’re climbing Mount Fuji, surfing in Okinawa or learning Japanese over some delicious Japanese food and a bottle of sake. Some use the money they save to pay for graduate degrees – if this is what you want to do, do your research and make sure it will pay off.

At some point you are probably going to have to start renting, but hopefully you’ll have made good decisions which make it less painful for you. If you’re in a position to put down a deposit on a property, then you are on a winning course. If you can live with your parents, try offering them your time or effort as rent. Parents should not be charging their kids rent at all as this only serves to reduce their child’s finances, keeping them in the nest longer.

As far as renting goes you want to look at ways of spending as little as possible. If you’re thinking your salary is enough to make the payments on that swanky penthouse in Mayfair, then you’re probably never going to be able to own that kind of place. You’re basically giving your money to the landlord to spend on champagne and lobster on her yacht in the Caribbean. For now, consider living out of town, get a cheap bicycle and keep yourself fit. If you have a laptop, you don’t need a TV, DVD player, radio, stereo etc. Get yourself a rice cooker and you can enjoy all that Japanese food you loved when you were teaching English. You can cook a whole lot more than rice in them, you know! Don’t throw your spare cash away on unnecessary clothes, expensive drinks, rip-off coffee etc. Socialise at places where you don’t have to pay for the privilege. When you have enough to get a mortgage, think about whether you could rent a room out to boost your income. Or think about renovating and selling for a profit. Or both!

Make smart decisions like these and you will avoid the anguish of millions, now in middle age, unable to break free from the traps of rent and debt. Who knows, you might even be free to plan those champagne and lobster parties on your yacht, all thanks to that chump in your Mayfair flat who goes to work all week to pay for it all!