When you are young and starting your professional career, it is important to start practising discipline with your money as early as possible.
When you start earning your own money, it is crucially important to set goals for yourself and to start early in order to achieve them. Are you wanting to go on regular holidays, are you planning on buying a home, is there someone who is financially reliant on you, what debts have you incurred – student loans, vehicle loans, credit cards or even personal debts?
Planning for your future is vital and every one of us is planning on having a future. Perhaps, someday you would like to retire comfortably or have a big overseas holiday to visit new places, friends or family. You must plan ahead to allow your dreams to become reality.
According to financial planning psychology, our lives can be broken down into 5 major groupings, namely: Single and starting out, In a relationship and planning the future, Married and having children, Established in career and pre-retirement, and lastly Retired. In each stage, we have different needs and goals that we are working towards.
- Single and starting out: this group usually has somewhat ‘selfish’ goals. They are looking at improving their personal situation, saving for themselves and towards their future; be it towards a holiday or that one possession that you have always wanted.
- In a relationship and planning for the future: These people are looking at life with their partner, generally planning on getting engaged, married, buying a house or moving in together. These people would be looking at savings and possibly ensuring that their debts are covered.
- Married and having children: This stage is not for everyone however it comes as a continuation of the previous stage. These individuals will usually be looking at ensuring that their families are well protected for the future. They should be questioning themselves and asking whether their family would be able to survive if they were no longer around? Commonly people usually start neglecting their own plans like saving towards their retirement. The reason for this is that their focus is solely on providing for their families in the present.
- Established career & pre-retirement: This Couples’ children have now left the nest, whether that is to study further or to start their own lives. This is when these individuals realise that they have neglected their retirement goals that they set when they started their working lives. Suddenly it becomes a major rush to try and catch up on these goals that have been forgotten. This is usually the period where individuals will put away as much money as they can before they retire so that they will have a chance of retiring comfortably.
- Retirement: This is the stage where people take a step back from work either entirely or work on a contractual or a part-time basis to boost their retirement income because they were not able to save enough for a comfortable retirement. Individuals focus on their income-producing assets and take time to engage the hobbies that they were never able to take on while in their working lives.
Where are you in your life’s journey? Have you discussed your goals with a financial adviser? Let the team at IWCP help you.
Author:
Cameron Fraser – Financial Adviser and proud IWCP tribe member.
