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TRENDING BASIC MONEY MANAGEMENT TIPS
10.19.2020 / Lifestyles « Back to all articles
Identifying 5 Financial Life Stages
You might be nixing takeout to save up for your daughter’s private school tuition while your friend just spent a few thousand dollars on a vacation with his girlfriend. What’s happening here? Has your friend forgotten how to save money, or are you being too stingy with yours? There is probably no right or wrong in this situation, assuming both of you can afford your expenses. Just like there are different developmental stages you pass through as you grow into adulthood, there are also stages to financial life. Though not everyone will make the same life choices, there are patterns in how people spend money as they age.
1. Starting Your Career
Not everybody goes to college, and not everybody starts a lifelong career fresh out of high school. The common ground for everyone in this stage is that while you are not yet financially stable, you can focus on setting your finances up for greatness: saving wisely, paying off debt, and cutting down unnecessary spending.
2. Building Your Career
This is the phase during which most people start a family. If you don’t have kids, that’s ok too: you should focus on other big life expenses like setting up savings accounts, possibly buying a house, and thinking about your retirement accounts. If you do have kids, you probably have a lot of expenses related to their care, such as tuition, extracurricular activities, clothes, school supplies, and more.
3. Finishing Your Career
Ideally, at this point, you’ll have put a few decades into a career you love. You should focus on continuing to pay off debt, though right now it might be a mortgage and car payment rather than a student loan. You’ll probably be focusing on your kids’ college tuition, or you might be thinking about retirement plans. Will you travel? Start a hobby business?
4. Beginning Retired Life
Finally: you’ve hit retirement! Carefully plan out your savings whether you want to travel, start a new business, or just hang out with the family. You should also maximize your retirement funds and plan any changes to your will — especially if grandchildren are making their way onto the scene at this point.
5. Maintaining Retired Life
It’s good to check in now and then to make sure your finances are where you want them to be. Are you paying too many taxes? Have you written up a will and planned for end-of-life issues? Do you or your spouse have medical concerns that will eventually necessitate assisted living?
Money and finances are not topics everybody loves to think or talk about, especially if your budget is a little bit tight. With careful planning, though, you can make the best of any financial situation.
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10.19.2020 / Lifestyles « Back to all articles
Identifying 5 Financial Life Stages
You might be nixing takeout to save up for your daughter’s private school tuition while your friend just spent a few thousand dollars on a vacation with his girlfriend. What’s happening here? Has your friend forgotten how to save money, or are you being too stingy with yours? There is probably no right or wrong in this situation, assuming both of you can afford your expenses. Just like there are different developmental stages you pass through as you grow into adulthood, there are also stages to financial life. Though not everyone will make the same life choices, there are patterns in how people spend money as they age.
1. Starting Your Career
Not everybody goes to college, and not everybody starts a lifelong career fresh out of high school. The common ground for everyone in this stage is that while you are not yet financially stable, you can focus on setting your finances up for greatness: saving wisely, paying off debt, and cutting down unnecessary spending.
2. Building Your Career
This is the phase during which most people start a family. If you don’t have kids, that’s ok too: you should focus on other big life expenses like setting up savings accounts, possibly buying a house, and thinking about your retirement accounts. If you do have kids, you probably have a lot of expenses related to their care, such as tuition, extracurricular activities, clothes, school supplies, and more.
3. Finishing Your Career
Ideally, at this point, you’ll have put a few decades into a career you love. You should focus on continuing to pay off debt, though right now it might be a mortgage and car payment rather than a student loan. You’ll probably be focusing on your kids’ college tuition, or you might be thinking about retirement plans. Will you travel? Start a hobby business?
4. Beginning Retired Life
Finally: you’ve hit retirement! Carefully plan out your savings whether you want to travel, start a new business, or just hang out with the family. You should also maximize your retirement funds and plan any changes to your will — especially if grandchildren are making their way onto the scene at this point.
5. Maintaining Retired Life
It’s good to check in now and then to make sure your finances are where you want them to be. Are you paying too many taxes? Have you written up a will and planned for end-of-life issues? Do you or your spouse have medical concerns that will eventually necessitate assisted living?
Money and finances are not topics everybody loves to think or talk about, especially if your budget is a little bit tight. With careful planning, though, you can make the best of any financial situation.
