Face it. Nobody can set up a full-proof financial plan if he or she doesn’t take into account the different financial stages of his or her life. Your need for money and the amount you should save toward your Golden Years changes as you age. Then, there is your Golden Years. This said, it isn’t just about your retirement; it’s about having money when you need it no matter your age. Experts agree there are different stages in your financial life. Here’s what they are and what you should prepare for. Remember, when it comes to money, its best to be strategic at all times.
Young Adult Years
You have some serious choices to make once you’ve graduated from high school. Will you go to college? If so, will it be a two-year, four-year, or vocational institution? Will you have additional education or training after your undergraduate studies? What will you do for a living at first? During this time, Reader’s Digest explains you will need income to cover any educational expenses and to build good credit. You’ll also need money for a car, a home, and its furnishings, as well as to pay off your existing debt and begin saving toward your retirement.
Career and Family Years
Whether you married your college sweetheart or found someone after graduation, it’s time to build your family and your career. This will cost you money, too, so be prepared. If you rented for the first few years after college, it’s time to buy your home, and you should also secure life insurance to protect your current and future loved ones. Look to continue growing your savings, and remember, your new family helps reduce your taxes. If you want to be your own boss, start your own business, and either way – employer or employee – you must grow your retirement savings and prepare your will.
Your pre-retirement years should include fewer expenses and more savings. This is the time that the kids graduate high school and head off to college, so you’ll need money for that. It’s also the time they marry and begin their own families; you’ll need money for that, too. Look for ways to continue to reduce your taxes, and definitely find a way to pay off your mortgage. Keep stashing money in your nest egg, you’re retiring soon, and sit down with an expert to begin to plan for the day you finally get to stop working. Venture capitalists like Peter Foyo and others can also help fund your business growth.
When you first retire, if you took good care of yourself you should be healthy enough to travel the world if that’s your goal. Here’s hoping your financial planning throughout your previous life stages paid off. You may also opt to do volunteer work or turn your hobby into extra cash. During this time, you’ll need to manage the differences in your taxes and keep your savings intact. You’ll also want to make any necessary adjustments to your estate. Keep in mind at some point you might require assisted living or full time elder care in your retirement, and that will cost a pretty penny.
When you’re wise with your cash throughout your life’s phases, you’ll have what you need once you stop working. It’s important to have what you need while you work, too. Stretching your finances too thin will cause harm to you, your family, and your credit, so be prepared for each financial stage with proper planning and savings. It doesn’t take a rocket science degree to know you’ll need to be fiscally responsible throughout your adult life. It does, however, take proper planning to make that money work for you instead of against you. Be wise now so you can enjoy life later.