Tuesday, September 18, 2018

Navigating Life’s Financial Stages

With each life stage, our needs, wants, and dreams change. So do our financial needs.

Where your money goes when you’re 20 probably won’t be the same places as when you’re 50. That’s why planning for each new life stage is a crucial step to having a healthy financial life.

Some years bring major money shifts, however, some goals span many decades, like saving for retirement. Consider these steps as you navigate new stages. And remember, we’re always here to help.

Post-Secondary and Early Career

Whether you’re furthering your education or jumping into the workforce, your 20’s are a critical time in your life. Building a firm financial foundation is key to success down the road.

  1. Make a Budget. Know how much money you’re making and where exactly your money is going. Many people spend more than they make in these early years – try to do the opposite.
  2. Save for Emergencies. A good rule of thumb is to save 3 to 6 months worth of your necessary expenses in an easily accessible account.
  3. Pay Down Debt. Interest builds quickly, so avoid shucking out extra cash by paying down debt on time, or faster if possible.
  4. Save for Retirement. If your employer offers a 401(k), 403(b), or another retirement account with a match, save at least the amount required to get that – think of it as free money. Retirement might seem light years away, but the sooner you save, the better off you’ll be.
  5. Get Disability Insurance. When you’re young and healthy, you may shrug off disability insurance and think, “I’ll get to it later.” Experts think otherwise. Disability insurance is often extremely affordable and easily accessible. Everyone – no matter his or her age – should have it.
  6. Designate Beneficiaries. When you do this, you’re designating who receives your assets in the event of your death. Since you’re probably not married at this stage, it’d most likely be your parents or siblings.

Building a Family and Advancing Your Career

These are exciting times! You may be getting married, starting a family, looking to buy a home, or jumping further into your career. Typically, your income is rising, which means there are a few new things to think about.

  1. Negotiate Your Salary. If you’re switching employers, or even sticking with the same one, never be afraid to ask for what you’re worth. If you’re nervous, read this article on how to negotiate your salary.
  2. Bring Your Money With You. If you do switch employers, don’t leave your retirement account behind. Either roll it into your account with your new employer, or move it into an IRA you control at a brokerage firm.
  3. Find a Financial Planner. Now that you’re making more money and your responsibilities are growing, it’s important to seek advice from a professional. A financial planner can help you see the bigger picture and guide you down a successful path.
  4. Update Beneficiaries, Will, Power of Attorney, and Other Important Documents. If you find yourself getting married, you’ll probably want to add your spouse’s name. If you’re single, you may want to update based on life events.
  5. Purchase Life Insurance. Picking the right life insurance policy for you, your family, and your unique situation can be complicated. Here’s a good place to start.
  6. Purchase a Home. When buying a home, it’s important to evaluate your current financial situation (including debts) and make a decision that won’t put too much stress on your finances.
  7. Start Saving for Your Child’s Future. If you have children, or plan to in the future, opening a 529 account for them is a great way to start saving for their education. Set up automatic monthly payments to make saving seamless.


At this point, you’re probably making the most you ever have in your career. You most likely own a home, a car, and have been paying down debt while saving as much as you can. Now’s the time to look ahead to retirement.

  1. Max Out Retirement Contributions. Save as much as you can both in your employer-sponsored account and in your own Roth IRA or traditional IRA.
  2. Reduce Taxes. Meet with a CPA to maximize your deductions. Consider opening up a Health Savings Account.
  3. Pay Off Your Mortgage and Remaining Debt. If you’re still paying off debt from a home, car, or education, now is the time to pay that off.
  4. Consider Your Family Members. If you’re going to be the caretaker for your parents, it’s important to consider those expenses when mapping out your own financial priorities. Health care is expensive and can cause familial strain. Talk with your siblings to come up with a plan that works best for each of you.
  5. Begin Planning Your Retirement. You’ve spent all those years focused on saving money for retirement that you haven’t stopped to think about what you’ll do once you get there. Meet with your financial planner to discuss how to turn your retirement savings into income.


Whether you’re spending your retired years on a porch swing or wrangling grandkids in the backyard, it’s an exciting time that you’ve worked hard to achieve. You’ve come this far, don’t lose track of your finances now!
  1. Reevaluate Your Budget. Now is the time to sit down with your spouse and financial planner to decide how much money you’ll need monthly, how to make a steady income, and when to start taking Social Security.
  2. Downsize. Buying a smaller home can save you money on utilities, property taxes, and other expenses.
  3. Make Changes to Your Will and Estate Plan. By this time in life, plenty has changed. Make sure your legal documents are up to date and reflect your current choices.
  4. Consider Moving to a Retirement Community. The benefits go far beyond financial. Moving to a new community brings new friends, new opportunities, and far less stress than owning and caring for your own home.
  5. Enjoy! Travel. Take up a new hobby. Whatever new adventure you’d like to take – take it! You’ve earned it!