For many individuals, achieving important goals such as purchasing a house, launching a business, or embarking on a long-anticipated journey is a common aspiration. In recent times, some people have started counting on receiving an inheritance to finance these significant life moments. However, although it may be enticing to include a projected inheritance in your financial strategy, it is crucial to exercise prudence. Here's the reason why.
Recent studies indicate that 25% of adults in the UK are postponing important life choices until they inherit money. This percentage increases to 27% among individuals aged 18 to 34. The primary reasons for this postponement include the escalating cost of living, the surge in property prices, and the belief that owning a home is unattainable without assistance.
But as Stacey Love, a tax and estate planning expert, points out, more than a quarter of people receive less inheritance than they expected. This brings home a crucial lesson: relying on an inheritance, which is often an uncertain and unpredictable asset, can be risky. The reality is that inheritance might not provide the financial support you anticipate, and basing your major life decisions on this possibility could leave you exposed.
Why Financial and Human Capital Should Be Your Foundation
Rather than hinging life goals on an uncertain future, it’s worth considering alternative approaches—ones that put you in control of your financial destiny. The first step is to ensure that your financial architecture is based on sound planning, using your existing financial capital as a cornerstone. This means building a robust savings and investment plan, ensuring you’re living within your means, and being prepared for the unexpected.
At the Academy of Life Planning, we often advocate for the development of human capital alongside financial capital. Your skills, knowledge, and experience are assets that can increase your earning potential, opening doors to new opportunities. By focusing on your personal and professional development, you are creating a sustainable path to achieving your goals, regardless of whether an inheritance materialises.
The Contingency Plan
Even if you do expect to inherit, it’s wise to treat this as a contingency plan rather than a certainty. Having open and honest conversations with family members about their estate plans is essential for managing expectations. But more importantly, by not relying solely on an inheritance, you give yourself the freedom to make informed, proactive decisions that align with your current financial position.
An inheritance, if it comes, can then become a bonus—an unexpected windfall that can accelerate your progress rather than being the foundation upon which your future is built.
Take Control of Your Future
It’s understandable that, with rising living costs, many people feel pressured to wait for a financial boost before taking big steps in life. But you don’t have to put your dreams on hold. By taking control of your finances now and investing in your own personal development, you’ll be better prepared for the future, no matter what happens.
At the Pecunia Financial Planning, we offer tools and guidance to help you create a financial plan that works for you. Whether you’re building your financial capital, developing your human capital, or planning for an uncertain inheritance, our approach ensures that you’re in control and equipped to face whatever the future holds.
It’s about making sure you have ‘enough’—in terms of money, opportunities, and personal growth—to live the life you want, without waiting for an uncertain windfall.
Get Started Today
Rather than waiting for a future that might never arrive, why not take action today? Start planning for your goals based on what you can achieve now. Our comprehensive support can help you make informed, confident decisions about your financial future.
Are you ready to take control and start building a secure, sustainable plan for your life? We’re here to help.
Comments