Every year may feel like an expensive year, but according to our latest research there's no year quite like 31 when it comes to spending on life's big (and pricey) milestones
Let's face it. Life is expensive. As a kid you quickly learn how long it takes to save up your pocket money, and then as you get older you've got ever-increasing rental prices, stagnant interest rates, and rising inflation to contend with. It can easily feel like each year is more expensive than the next.
But we wanted to find out what year in people's lives actually tends to be the most expensive so that we can help you prepare for all those costs. (And if your 31st year is behind you then you can sigh a sigh of relief and reminisce instead). Here's what we uncovered...
The average Brit racks up a bill of over £43,000 to cover all their costs in their 31st year
We asked over 3,000 people to share what the most expensive events in their lives have been and at what age they paid for them. From this, it became clear that the good ol'age of 31 was one very expensive year for many people.
This huge figure comes down to the fact that for many people across the UK, their 31st year includes a number of different life milestones that tend to pull heavily on the purse strings. And you might not be surprised to hear that the number one biggest expense at 31 was considered to paying for a wedding, with 27% of people agreeing.
These are the top 5 things people said contributed to their most expensive year:
- Paying for a wedding (27%)
- Buying a house (25%)
- Buying a first house (23%)
- Having a baby (20%)
- A honeymoon (14%)
Now, each of these events is pretty expensive on their own, but if you're juggling a few of these life milestones then costs can add up even more.
And as everything from the average house deposit to weddings continues to increase in price, it’s perhaps no wonder that life milestones are contributing to Brits shelling out nearly double the average national wage in their most expensive year.
How are we paying for it?
Savings is the most popular way to pay for a most expensive year, with well over half of Brits (60%) paying with savings.
However, more millennials than ever are turning to parents, and credit, to help fund these major milestones. Our research shows that 33% of 25-34 year olds say their parents helped them fund their most expensive purchases. Just so you can compare, only 14% of over 55s say they had help from their parents’ with the same purchases.
The use of credit has also increased between the generations, with 1 in 5 under 34 year olds (20%) using credit to fund big purchases, compared to just 8% of over 55s.
One thing everyone does have in common though is their agreement that the younger generation (25-34 year olds) have it tougher financially, with over half (51%) of 25 – 34 year olds and 57% of over 55s agreeing that this generation have the toughest deal when it comes to finances.
ClearScore's top tips to budget for your most expensive year
Brits are concerned about saving for day to day needs and milestones in the future, with the top three concerns being: saving for retirement (25%), saving enough in general (20%) and having enough money to support children down the line (14%).
These are out top tips to help you navigate life's biggest expenses:
1. Get saving early
This goes for saving for those big life milestones (whatever they may be for you) and for later in life. The earlier you start saving the bigger nest egg you'll be able to create, with less stress.
But even when you know you should be doing it, it can be hard to stop thinking of saving as an afterthought, and start seeing it as a priority. The best way to combat this is to turn saving from something you do now and again, into a habit.
To do this, try the trick of 'paying yourself first'. By setting aside money for your savings straight away, as if it were just another bill, it can help you build up healthier savings habits, change your mindset towards saving, and make it less of a drag on your lifestyle.
2. Shop around for the best deals
If you are going to be part of the 20% turning to credit to fund these purchases, then there are a few things you should be aware of.
While using credit can help you to spread the cost of these big purchases, it's really important that you don't borrow more than you'll realistically be able to afford each month. Use these tips to create a budget to help you work out what you can afford.
When it comes to loans and credit cards, it's certainly not one-size-fits-all, so always shop around and compare interest rates.
In your ClearScore account we show you a range of products that are tailored to your credit history. Products are listed alongside your personal eligibility, so you can see how likely you are to be accepted before you apply. And because we know your credit history, it makes it much easier to find the best products for you.
3. Check your credit report regularly
The higher your credit score, the more likely you are to be offered the best interest rates. You’ll also be eligible for the top products, reserved for people with the highest credit scores.
It’s worth checking your credit score and report so that you can identify ways to improve your score and save yourself money. And if you’re thinking about making a big purchase or taking out a new mortgage, this could save you a lot of money.
Don't wait until right before life's big milestones to check your score. Login to your ClearScore account to start working on your score now, so you're prepared for any of life's big purchases (whatever age they come at).