Life Stages and Financial Planning

As one goes through life’s stages your goals and requirements will change. What is right for you at age 25 is probably not the same as when you are 55. A financial plan will assist you in reaching those goals, and at a minimum will bring peace of mind. As the American baseball player/philosopher Yogi Berra said – “If you don’t know where you are going you will end up somewhere else.”

The stages and goals in a person’s life generally unfold as follows:

Stage 1: Starting your career – this stage is normally characterized by one central fact – namely you are broke. For some this never changes but with a plan and some discipline it does not need to be so.


Pay off your student loans
Purchase a car
Buy consumer goods – furniture, ipods, etc.
Build a good credit rating

Stage 2: Career / Family – you may settle down, get married, start a family. Now it’s time to become serious about financial matters particularly if you have a partner or children who are dependent on you.


Purchase a home
Proper insurance coverage
Make a will/Power of Attorney
Start saving some money

Stage 3: Middle Age – middle age is defined as when the phone rings on a Saturday night and you hope it’s not for you. This stage normally involves paying down mortgages and starting to think seriously about retirement.


Pay off the mortgage
Put some serious money into retirement savings
Educate the kids
Think about purchasing a cottage or vacation property

Stage 4: Pre-retirement Years – this stage is usually one of heavy savings.


Grow your retirement savings
Reduce debt (the goal is zero debt upon retirement)
Plan your retirement life style

Stage 5: Retirement – a well-earned retirement; put your feet up and relax


Make necessary changes to your will
Establish an estate plan
Manage your tax bill

Remember that all plans will change over time. Surprises occur, some good and some bad. Your financial plan should be flexible enough to adapt to changes, but simple enough so that you will follow through.

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