London is notorious for being an expensive city, not just to visit you understand, but to live in, because of rent, travel, other living costs and of course the expense of a social life in the big smoke.
Of course, people are always keen to tell you that wages and the like are adjusted to reflect the extra cost of living in the city. So for example, a mid-level job that might pay you £25K in the north-west of England, would be adjusted by paying you around £28-£30K for the privilege of living in the English capital.
There are too, excellent benefits to living in London, the opportunities for jobs and expanding your career are much more frequent and are more readily available, which is why millennials are constantly flocking to the city. They’re hungry for opportunity and experience and London has more to offer than nearly any other city in the UK.
However, with the hunger for ambition can come real-life hunger, once you’ve paid all your bills and of course kept that Oyster card topped up so you can get around. But, there are a few ways in which a smart and savvy millennial can keep ahead of their finances to live and enjoy London, rather than just exist within it.
It’s generally assumed that if you are living in a decent apartment in London, say for example Tulse Hill, near Brixton and you’re paying £900 all-in for your rent, bills and everything else, then you’ve got yourself a pretty good deal.
Even though this can be around half of someone’s monthly salary (if they’re on a good one), this is a bargain, when you consider that rent can be as much as that amount on its own and in an area that isn’t as nice.
Having said that, there are two-bedroom flats going for £1,800 a month around the area of Kensington High Street, so it’s possible to live somewhere decent for this amount of money. But, the point is that this can still seem insanely expensive, when someone from the north of England is paying less than a third of that for an apartment that’s the same size and in a great location.
The fact is that property is an unavoidable expense in London, and it can be difficult for millennials to save money to buy a house, when they’re already spending so much on rent.
Earlier this year, the Financial Times reported that some millennials are getting around this problem by continuing to live with their parents. By staying in the family home, many young millennials are saving money on rent and have savings to put away at the end of each month.
Another way millennials are getting around the expense of property in London is by moving out of the city itself to places like Essex.
London and its surrounding cities are again very expensive for property, so moving somewhere that isn’t as expensive and becoming a commuter, is an excellent way to save and get more value for money on a house.
It sounds obvious but putting money to one side is the best way to make sure that you have some, and if you’re the kind of millennial to struggle with doing that then there are a few options that you might find useful.
They’re also particularly good to help you to ensure that you can go on nice holidays and save for a deposit for a house and still live, work and enjoy life in that London.
SixOutOfTen.co.uk wrote a blog recently talking about this exact thing and the author of the blog – whose only given name is Laura – advised that everyone should open an ISA account. Why? Because it allows you to put in a certain amount of money, but it also controls the amount of money that you are allowed to take out any given time.
This is, as Laura says, very handy for people “who dip into savings for a cheeky pizza every week”. The trouble can be that once you start to amass a certain amount of savings, you can start to think that you can borrow money from that account because you won’t notice that it’s gone, or that you can just put it back in again – but that is a slippery slope!
By opening an ISA you won’t be able to take money out of this account whenever you feel like it, because the bank or building society will charge you for the privilege, which is counter-productive as an activity.
Laura also mentions that lots of banks offer high-interest current accounts and super saver accounts, which have a threshold on how much money you can put in, as well as take out, so you can save at a manageable rate and still enjoy your millennial London life!