What Financial Life Stage Are You In?
Understanding your own Financial Life stage and where you are at now is a great starting point to thinking about what goals you should be working towards. Now of course, some get to these life stages earlier or later and there is nothing wrong with that, just knowing where you may be is a good starting point!
Let’s get right into it and find out what life stage you may be in…
There are about four main life stages to think of and every stage is different, based on your age, your family, your career stage and multiple other factors. Of course, generally speaking, each life stage is normally the same for the majority of the population and based on your age.
The reason for this of course is simply down to as you get older, you will generally earn more and your family will grow as you have kids etc.
So let’s have a look at what these life stages are!
Foundation Builder- Learn, Grow and Plan - be the DREAMER
Age 10-20 - Finding Your Feet - Let’s begin to Walk and Learn the way!
Learn to use money
Become a bit more independent from parents - Pay your own way
Begin to learn about saving and investing.
Find your individuality and potentially buy your first car, get a first job, start your first business.
Finally, there are no limits to what you can become, DREAM BIG!
Age 20-30 - Foundation Builder - Set up your life for success!
Begin to realise how the world works - become more mature/aware.
Set-up a plan for saving and investing.
Buy your first house or apartment/move out of your parents house.
Potentially start a family of your own/get married.
Understand passion/strengths to build a great career or get the dream job!
Empire Builder- Become the KING/QUEEN
Age 30-40 - Castle Builder - Time to build out your ideal Life!
You have your first home, potentially look to purchase a second or use money to invest for future expenses
Your family is growing, you may have one, two or three young children and/or pets.
Your career is at its true starting point, this is where your job/career really gathers momentum.
You need to set out plans/structures for your estate (wills), investing/saving plans, insurances, superannuation and automate. You will not have time to think about this, therefore automation is key or hire someone to look after it for you (ie; a financial planner)
You are going to go through your most expensive 10 years yet, cashflow planning is essential (schooling for kids, holidays, buying first home etc.)
Age 40-50 - Empire Builder - Becoming the King/Queen you are meant to be!
Life truly starts at age 40, you are wiser, are at your best mentally and your kids are older now too!
You can build your Empire, now you have a castle/base of operations (home) and some subjects to help you (ie; family/kids/work colleagues/employees)
You are earning the most you will ever earn in your life, tax planning, superannuation and insurances are vital.
You need to plan it out properly to build a successful Empire! Best time to speak to a Financial Planner.
Retirement/Succession Planner- Consolidate your Power as a KING/QUEEN
Age 50-60 - Succession Plan - Time to think about Retirement!
You are beginning to age a bit now, but don’t let that stop you. Your kids will be more independent and you can start planning for you again.
If you have not spoken to a Financial Planner about retirement, you need to now!
You need to have super sorted and ready for retirement.
Salary sacrifice, contributing to super and update wills again (estate planning).
Your health is just as important as your finances now - LOOK AFTER YOU!
Age 60-70 - Your Empire is Complete - Retire and Celebrate Your Success!
Your best years are ahead of you now, your kids are grown up and you potentially have grandkids now!
If you have done all of the above, you are ready to retire and travel the world or Australia etc.
You need to consolidate though, to make sure you do not run out of money before you pass away. Or even worse, hold on to all of your money and don’t celebrate the best years of your life.
Having a financial planner by your side to sort out; Super to pension/retirement planning, taxation planning, Estate planning (wills), Centrelink planning (Aged pension), Investing plan for retirement is imperative.
Your Life is now Your OWN - Become the Innocent ADVENTURER
Age 70-80 - Find Your Purpose - Now the Empire is Complete, You need a new Purpose
Money is not a concern at all now (or shouldn’t be)
You are FREE to do what you want and become a whole new person, this is where you need to craft yourself a new identity.
You are still young enough to enjoy life and adventure/travel. But you can learn new things and be whatever you want to be to a degree.
Financial planning in focus during this stage is - cashflow management, retirement/superannuation planning, estate planning, aged care planning potentially and looking at ways to give back to family/society.
Age 80-90 - Gifting Stage - Your Empire can be gifted, before you shuffle off the mortal coil!
Your life expectancy ends here, time to sort out and finalise everything you need to before you leave this plane of existence.
Estate planning, gifting to kids/grandkids/charities etc. Whilst you live is potentially a better way of doing it.
Aged care due to health deteriorating can be on the cards.
Centrelink planning (Loads of benefits out there for older Australians)
Age 90+ - Gratitude Stage - Be Grateful for every moment you have, as you are the exception.
You have made it past the average life expectancy! Well done and celebrate every brief moment and be grateful for your health.
Finances really don’t matter so much at all if you have done everything you should have on this list.
As you can see, each life stage is different and in fact every person will hit these life stages potentially at different times as well. However, knowing what life stage you are in will help you to think about how you should be planning out your finances to help you achieve the next life stage and set you and your family up for less stress in life.
There are also a few things that we have not covered, but most of the essential stuff has been covered in the above, so check out your life stage and see where you may sit and need to start thinking about.
Let me know in the comments where you are and what you need to work on the most to help you move into the next stage.
Until next time,
Take Back Control
