Why we all need to be more honest about our financial lives

There’s an uncomfortable hashtag gaining traction amongst those Gen Z types populating TikTok.

On the face of it #Doomspending might seem fairly harmless, a new incarnation of what used to be called “retail therapy”.

Splashing out on nice stuff to give us a mood a lift when life is getting us down.

But if you watch the videos, it’s actually pretty bleak; all about a dawning financial hopelessness, a feeling that things previous generations took for granted like home ownership and retirement, are becoming increasingly out of reach.

If you’re going to have to work till you drop and never be able to afford to get on the property ladder, what is the point in saving today? Why not live in the moment, spending every penny to enjoy the now to the full?

That’s an incredibly dangerous school of thought, not least because time is the one thing you can never get back.

For women, in particular, the gender pay gap widens as we get older.

Looking at the latest figures from the Office for National Statistics, you can almost see the word “Children” wedged between the ages 30 and 40.

Whether you take time out of the workplace, cut back on your hours or just don’t want the hassle of pushing for promotion when you are juggling childcare or the myriad responsibilities that come with being a parent, a woman’s ability to earn the same as a man does post-40 diminishes.

So, bearing in mind we tend to live longer, it’s really important to start saving for our pensions as soon as we can.

Even if you believe you’ll still be working into your 70s, giving yourself the opportunity of at least slowing down in your 80s shouldn’t be discounted in your 20s.

In fact, that kind of outlook should be the spur to get young people saving more, not less.

The problem is, in your 20s you probably think you can work forever. It’s only once you hit those later years that you really think about the physical realities of getting older (well at least I have).

The prospect of not owning a home and having to cover rent into later life is also something worth factoring into people’s calculations, especially as those helpful guides put out by the Pension and Lifetime Savings Association that tell you how much the different standards of living will require a year, currently assume you’ll be living rent free by the time you’re ready to retire.

And if you understand that you’ve got 50 years for the wonder of compounding to work its magic, then the doom might not seem quite as bleak.

But in fairness to the 20-somethings of today, they do face an uphill battle to buy a house and realistically just ditching your morning coffee or only paying for one subscription service really isn’t going to do a great deal in helping create the hefty savings pot needed for a deposit today.

Plus, as interest rates ticked up from their historic lows, I’ve heard plenty of comments about them “getting back to normal”.

Older people reminiscing about the rates they’d had to deal with when they first stepped onto the ladder.

But for most of them, me included, the house prices back then pale into insignificance compared with house prices today and even though wages have also gone up, on average, first time buyers are having to spend almost 37% of their take home pay on their mortgage payments - that’s up from 28% just 5 years ago according to data from Nationwide.

And I was fortunate that when I was buying, 100% mortgages were widely available. I didn’t have to save a penny for my deposit, which was just as well because even though I returned North and the house was “affordable” by today’s standards, the rent I had been paying in London rent meant I had very little left at the end of every month.

I’m in awe of some of my younger Money Matters colleagues who have slowly and sometimes uncomfortably squirreled away cash into LISAs, grabbing onto that government bonus, and finally brandishing the keys to their first house.

It’s easy to fear the doom, especially when a lot of the tips out there telling you how to go about achieving the dream of home ownership seem somewhat disingenuous and often unachievable unless you get help from parents or come into an unexpected windfall like an inheritance.

But starting small and starting early can make all the difference, and that’s something a future you will definitely appreciate.