How would a young woman become financially independent?

[AbsentinSpring]

Without help from parents or an inheritance.

I've been pondering. I bought my first house (2 up 2 down Victorian terrace in not great area) 30+ years ago. I was single, worked in admin and earned slightly above average wage for that role. House cost £30k which was slightly less than 3x my salary and the interest rate was, for a time, 15%.

How could a young woman (who wasn't a hedge fund manager or corporate lawyer or such like) do that now?

That same house is now selling for £350k. And it's not in London or SE.

DD1 is in the process of buying her first home. She has worked in a minimum wage apprenticeship for 4 years, and saved carefully, including opening a help to buy ISA.

She's borrowing the maximum on her income and putting down all of her savings and buying a nice 1 bed maisonette in a safe area (East Midlands) at 21.

She'll graduate from her apprenticeship in 3 years with no student debt either. I'm very proud of her.

Why do you think this is more of an issue for a woman than a man?

Are you someone who believes that education is only of value if it leads to earning more money? If not, then the cost of university - and the incredible experience of spending a year abroad - has no relevance to the question unless your question is how to find university costs. (And a lot of your post revolves around home ownership...)

Why do you equate home ownership with financial independence, do you think that someone who rents isn't financially independent?

I challenge the premise of your question... If you mean "how can a young person afford to buy a home" then just say it. If it's "I don't want to pay for my daughter to go to uni without a specific defined career path which will result in a high income from the day she graduates" then...

Myself and my DH were not born in the UK (hence no mum and dad bank) and despite being frugal and saving every penny we were not able to get into the property ladder until we got married and combined our savings.. too much was going into rent

This is exactly what I came on to say. Home ownership isn't the marker of financial independence, being able to support yourself without relying on parents or partner is

Very snooty response.
How lovely for someone to value education for what it is and not have to worry about being financially independent.
It’s a luxury that many people don’t have.

I don't see alot of future generations ever being financially independent.

My youngest sister is 25 and zero hope of ever affording a place of her own. She has an average job (about 22k a year) she won't get a house until she meets someone to settle down with.

And my kids will be even worse off. Yayyyy.

By definition, she's had help from her parents. They've housed her to enable her to save up for a deposit.

I have a friend who did similar. She also had to move to a cheaper area. She wouldn't have been able to afford a house in the area she grew up.

To me, a young woman being financially independent means not relying on a partner financially. A woman can still rent and do this

it’s easier to do while owning though, as a mortgage is nearly always less than rent.

i worked all through uni and saved as much as possible. Had enough for a 5% deposit on a flat in a student area with an easy commute to work.

firstly is they type of property. A lot of my peers missed out because they wanted to go straight to a nice 3 bed house with garden in a nice area. I bought a studio/small 1 bed in a reasonable student area with several hospitals close- easy resale/rent as high turnover, cheaper than the suburbs, on bus/train lines. It was central enough that I cycled everywhere.

i negotiated a slightly higher mortgage as I was on a post grad stipend. I also negotiated an interest only mortgage. I paid the interest and put all my spare cash into an ISA.

so interest only mortgage dramatically reduced my housing costs. No commute expenses, lived fairly frugally, no sky, basic phone etc.

sold after 5 years and bought a 2 bed house. Rented a room. until I met dh- by which time I was financially independent.

I bought a shared ownership property which only required me to have a £5k deposit. I had been renting since age 18 when i started full time work. Sold that 5 years down the line for a £20k profit so had c£30k to put down on my next property, by which point my salary had increased enough for me to be approved for a mortgage in the region of £230k.

Study hard at school. Start thinking about career options early and seriously think about what lifestyle you want and whether your chosen career can fund it. Make the most of work experience opportunities. If you're not sure what career you want, pick subjects that will always be highly regarded eg sciences. Get a professional qualification if you can.

Why do you think this is more of an issue for a woman than a man?

Women's issues interest me more than men's.

Are you someone who believes that education is only of value if it leads to earning more money?

No but there are other ways to gain knowledge that don't involve university tuition fees and living costs.

Well as I say, if you don't value education then say so. And continue voting Tory.

I did this. It was great. Now I’m a civil servant, earn reasonably well. Bought a £250k house in the SE in my early 20s (late 20s now), deposit was quicker thanks to a compensation payout but would still have been done without it. And the mortgage is just on my salary although it’s jointly owned with DP.

My advice would be:
Max out LISA
Negotiate salary hard
Change jobs relatively often for salary boost
Do as many internships as possible whilst at uni, and work during YA if possible

I don't know how uni works these days but that does seem potentially a very costly mistake. I worked as many hours as I could during uni but the bottom line is I wish I had done the whole thing at night school, or not done it, but I appreciate some of my jobs wouldn't have looked at someone without a degree.

are you worried she'll be financially dependent on you?

Why the sexism? Same way as a young man would of course. Not sure why it should be any different.
I do think establishing a career before starting a family is a good idea, it gives a woman far more security and options.
For both men and women it's important to be capable of being self reliant in order to cope with whatever life throws your way. Equally important is making sure your chosen partner is just that, a partner, and not someone to depend upon, or who is dependant upon you. I don't just mean financially. When the balance shifts, resentment is born.

And I'm telling you that I have retained my financial independence whilst also being in a partnership.

I attained assets of about 35k, and entered into a legally binding joint purchase where I retain my share of that asset. We have financial discussions all the time and retain independence of our own assets. We plan for how the income and pension arrangements of any pregnancy might affect me, ensuring that financial parity is achieved.

Unless you know that your daughter will not be entering into a partnership (hint: you don't, whatever she might feel now, it's a known-unknown), then you should also advise her on financial planning should she enter a relationship. Especially if you are concerned about the potential disparity with a male partner.

Depends on your ‘financially independent’ means. If owning your own home is part of it. Not many young people men or women can afford that, in any area they wish to choose so will rent. I don’t believe home owning is part of financial independence.

People can also be financially independent within a marriage. If someone was married and talked about their financial independence, I would take that to mean they can survive on their own income, should the marriage end. Their income isn’t completely tied to - another person. My marriage ending barely impacted my finances. I bought a smaller house than the one we shared and earned enough money that him wriggling out of CMS didn’t really impact me.

I still live in that house, dd is going to uni this week and I have a younger son all paid for (aside from a small loan from student finance) by me.

Women listing financial independence is more of an issue once they have kids. But you aren’t asking that either.

Or are you asking how your daughter will ever be able to afford to buy a home?

She would need to play the long game

Become qualified as far as possible for the highest earning job which appeals to her and is within her capabilities

Budget, spend less than she earns

Save enough to feel secure if she loses job - usually 6 months expenses

INVEST any further savings. Do not save as cash, you'll be lucky to get 2% on savings whilst inflation is 10%

The OP used housing as an investment vehicle, this isn't necessarily easy these days. Our young woman can invest in property, shares, bonds, her own business, antiques, precious metals, crypto, etc.

Investments are risky. But cash in the bank isn't 'safe' it's losing 8%+ of its value each year.

Make decisions for the long term, not short term gain.

I rented a room in a house share to save a deposit. I then bought a house in a cheaper area of the north and rented out this house whilst I saved another deposit for my own home in a nicer area. Later I was able to sell both houses for my forever home.

I also trained to become an accountant, using my weekends to study. Was tough at the time but many years later, well worth it.

Get a really good job in an industry she can grow in. So, nothing exploitative and low paid like social, care or teaching.

How would a young woman become financially independent? The same way as a young man would.

And how is that?

Encourage the saving habit while still at school, and being frugal with spending. You can still have a social life but learn not to be swept up in status symbol culture (cars, clothes, holidays, fancy restaurants, beauty treatments etc).

I was always encouraged to save up for things I wanted and did the same with my DCs. Credit cards are used but paid off in full and other lending is not for holidays or new gadgets. It should be seen as as a safety net in case savings don’t stretch to major emergencies.

And also to be prepared to do boring routine jobs that don’t necessarily leave lots of days free for socialising/gaming/lounging around. These are the jobs that can lead to career and salary progression but you have to put in the graft to build up from - no one will automatically promote you - you’ll need to change jobs every couple of years to get the progression and salary increases.

IMO Financial independence doesn’t mean home ownership.

I challenge the premise of your question... If you mean "how can a young person afford to buy a home" then just say it. If it's "I don't want to pay for my daughter to go to uni without a specific defined career path which will result in a high income from the day she graduates" then

And you appear to have an elitist view that an education can only be obtained by going to university. I disagree.

The contribution we'll be expected to make towards her living costs (£20k+) has been saved and I think it would be better put towards a house deposit.

If she wants a year abroad she can do what I did - get paid to work overseas.

So yes, I do hope her degree leads to well paid employment and financial independence.