Iona Bain is founder of the award-winning Young Money Blog, the first and only British blog devoted to millennials and their finances. She is also a freelance journalist, commentator on TV and radio, speaker and author of Spare Change: Better Ways to Manage Money. She recently founded the Young Money Agency with her dad, business journalist Simon Bain, to help the financial sector improve how they educate and relate to consumers.
Abraham Lincoln once said: “The best way to predict your future is to create it.” So while today’s freshers may be (understandably) focused on the next few months of hustle and bustle, it certainly pays to keep an eye on what could happen further down the line.
Sadly, students can no longer adopt the carefree approach to life and work that may have passed muster in years gone by. Okay, previous generations didn’t just cruise into easy jobs for life, as some crude caricatures would have you believe, but baby-boomers knew what they were dealing with. An accessible housing market, decent final salary pensions, straightforward (if somewhat confining) social norms and job progression, the world is so much more dynamic, open and free than it used to be. But daunting too.
With wages stuttering and degrees becoming ever more commonplace, the passage into full-time, well-paid and satisfying work is far from assured.
Combine that with on-going political and economic haziness, plus the continual scraping back of state benefits, and today’s students have got one hell of a mission on their hands - creating their own futures (as Abe advised) so they can survive and thrive in a changing world.
So what are the big themes that students (or at least their anxious parents) should be aware of? Let’s peek into the crystal ball, with the eternal caveat that nothing is guaranteed…
1) Skilling up - the new normal
I remember being told at my graduation ceremony by the Vice Chancellor of my university: “Today is not the end of your education – it is only the beginning.” As I get older, I grasp just how true that is. Continual professional development (corporate jargon for learning new stuff as you work) will become second nature as academic degrees turn into a mere baseline for learning a raft of 21st century skills on top. As technology and globalisation allow us to cheaply outsource menial tasks we once did for ourselves, expertise in things like coding, digital enterprise, brand building and growth hacking will become essential. Which brings me onto my second point…
2) Living in a digital world
Teenagers are already existing online as the first people to be born as “digital natives”. And they will take that tech-friendly approach into every corner of their adult lives. Their banking will be done almost exclusively through their phones as digital challenger banks hit the mainstream. Opening a digital current account (as I did recently) will take minutes, not weeks. In fact, the phone will become their entire financial dashboard, allowing them to see how much they are saving, spending and investing. That technology should also become smarter, more intuitive and capable not just of telling people what they have done, but what they SHOULD do with their finances.
3) The age of personal responsibility
By historical standards, we are currently in the midst of a credit boom and a savings slump. All that will change. Trust and faith in public services will decline, with increasing stories of hardship proving that even the most basic state benefits can no longer be taken for granted. The financial agenda will shift to the individual, away from the family unit, and as fewer people get married and have children (or do so at a much later age when they have built up assets of their own), society and commercial services will be geared much more around “me” than “we”. So today’s students will be hearing much more about the need to save and invest of their own accord, and not to rely on other people or politicians to bolster their wealth.
4) “Hipsternomics” takes over
Those bespectacled whizz-kids hammering out their Big Ideas on laptops in cafes…some of us may laugh at hipsters, but they have turned the world of work upside down. Self-employment is on the rise and working remotely will soon become the ideal, over and above relentless escalation up the greasy pole. Indeed, tomorrow’s workers are unlikely to have even one job at a time, let alone a job for life. The “side hustle” (where people make money doing entrepreneurial work online) will gather momentum, giving people a financial cushion and leaving more time for enlightened activities like travelling, cultural experience and charitable work. Making money through investments won’t necessarily become easier, but it will be possible for greater numbers of people thanks to digital wealth platforms. And there will be some spectacular success stories…
5) Retirement will die out
The cliff edge of retirement? That is already a thing of the past. As many people live longer, look after themselves, enjoy their jobs and spend less time in an unhealthy office environment, the prospect of working longer will be really quite realistic (even appealing). Those that occupy traditional manual jobs will reinvent themselves in new, more manageable roles as they get older. And the pension is unlikely to remain as it is. More like a “lifetime savings plan”, it will have money drawn not just from the workplace but personal savings, investments and state benefits. It’ll all be managed simply, effectively and flexibly – to suit the individual above all else.
Welcome to the future.
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