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What are life stages?

As you go through life most people go through various life stages as your relationship with people change and your personal priorities change.

Having a sound overall financial strategy requires that you recognize that your finances are in a constant state of change. Not only do your personal relationships and priorities change, but also your financial needs change over time. Luckily, it is somewhat easy to predict the changes that will occur in your financial life stages.

Most individuals pass through up to seven financial life stages as they age. Income levels, spending patterns, family situations and areas of financial concern, while not exactly predictable, tend to follow a pattern.

What life stage are you at?
Happy go lucky

You are single, finished your education, got your first job, started your first super fund and only a few financial commitments.

Long term relationship

Eventualy most people will get married or enter a long term relationship and your financial commitments begin to grow.

Young family

You start a family, your priorities change and financial commitments increase at a rapid rate. You may even change jobs many times.

Wealth Accumulation

You have more or less setteled into a career have a good income and your family is growing up.

Financial Independence

You are at the peak of your career, your children are young adults and have become financially independant.

Empty Nesters

The children have left home and you are thinking of new interests, hobbies and travel. You may be considering downsizing the family home.

Changing priorities

You are thinking about your lifestyle and maybe considering retirement or working part-time and what you will do with all that spare time.

 

Also remember as your life changes and you go through various life stages should have a will and your this needs to be updated to reflect your current circumstances.

Case Studies

  • We have compiled an number of case studies which may be of interest to better explain and give some examples of investment options which may suit different circumstances and goals.

  • Case Study - Emma

    Emma has received a large sum of money from her father for her 21st birthday. She is told she has to invest it so she seeks professional advice.

    read more
  • Case Study - Mark and Kate

    Mark and Kate have just had a baby girl and would like her to attend a private school when she turns eleven. They want to setup an "education" fund for her so what investment strategy should they use to ensure they can meet the expenses.

    read more
  • Case Study - Sally

    Sally is preparing to roll her superanuation in to an allocated pension. Check out her options and the most effective solution.

    read more
  • Case Study - David

    David has reached the age of 55 and wants to weigh up his options. Should he retire now or continue working either full-time or part-time?.

    read more
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Happy Go Lucky

This is when it all starts to happen. You get your first job, first income, first super fund and first everyday bank account. It's also the time of first commitments such as rent, insurances and debts (credit cards and personal loans). You set yourself some medium term goals (3-5 year plan) and it is a matter of weighing up what you start to save for first. Will you save for a deposit on your first home or will you travel and work abroad. Alternatively, do you make some small additional contributions to super

Strategy

Budgeting is critical! Limit making any commitments which over extend your income. You may have to wait a few months before buying that special dress or the latest computer gadget to avoid putting it on your credit card and paying interest. Identify the amount you can set aside for saving your goals and make it regular and disciplined (direct debits are perfect for this). The earlier you start, and the more disciplined you are the sooner you can be achieve your goals.

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Long Term Relationship

 

Strategy

 

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Young Family

Talk about busy!!! By now you more than likely have couple of the following: a demanding career; a first home loan; partnerships and marriage; and possibly young children. As a result, you may be reduced to one income and thinking about how to fund your children's education. You'll also seek wealth protection through insurance, Wills and Powers of attorney.

Strategy

Debt management is critical and effective budgeting can help you through. Paying off non-deductible debt like a home loan is imperative. A mortgage offset account can help achieve this quickly. It is also time to start thinking about salary sacrificing to superannuation, maximising the government's co-contribution scheme and education savings through managed funds and income splitting of investment income. It is important to seek legal advice regarding a Will and Powers of Attorney. Of most significance is the need to protect your biggest asset - the ability to earn income, which you can do with a range of insurance policies.

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Wealth Accumulation

Your career is usually settled. Now that you have reduced your debt it's important to consider ways in which you can further grow your wealth. Perhaps you have a family growing up, with education expenses to meet. You may be in a better position to salary sacrifice and set aside some money to take a long overdue holiday, a home entertainment system or purchase a new car.

Strategy

t is important to reward your hard work without over indulging. Continue towards your longer term investment goals. Invest in growth assets within your superannuation, and maybe even consider gearing as cash flows improve. Ensure you have adequate levels of wealth protection to cover your financial commitments.

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Financial Independance

 

Strategy

 

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Empty Nesters

 

Strategy

 

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Changing Priorities

 

Strategy