Wouldn’t life be easier if you could take on life’s big decisions and milestones with the help of people who’ve already been there?
Our podcast, Life’s Journeys, brings together the experienced and the newbie, the expert and those looking for guidance for the important choices in life.
Episode one of this series puts independent financial advisor and creator of the Informed Decisions service and podcast, Paddy Delaney, and retired couple Noel and Noleen, in a room to chat about the big financial choices the couple have made in each decade of their lives.
What can we learn about financial security from listening to Noel and Noleen’s discussion with Paddy? Here are three valuable things they shared from each decade of their journey;
Three things to know in your 20’s
- Enjoy life
For many people in their 20’s, the biggest financial decisions tend to be buying your first home, buying and insuring your first car and travelling the world. These are important steps to help you grow as a person, become more independent and learn about yourself and the world around you.
Your 20’s are the perfect time to complete these rites of passage and enjoy life to the fullest. However, it’s also a good time to start educating yourself on personal finance.
- Don’t forget about savings
Your 20’s are the time for going out and enjoying yourself as much as possible, but it’s important to remember to save so that your future self will thank you!
Setting up a savings account or investment fund for a manageable amount is a great way to put a future plan in place. Here are 15 small steps you can take each day to build savings, without feeing the pinch too much!
- Use financial institutions sensibly and live within your means
Try to be sensible when it comes to borrowing money in your 20’s. Although there may be many things you’d like to do, stagger out your finances so you can avoid taking out large loans that will follow you for years! Make sure any loans you get are feasible for you to pay off each month and won’t leave you struggling to make ends meet.
Three things to know in your 30’s
- Take the steps to ensure you’re protected
You may have started to settle down in your 30’s, whether that’s in your career, buying your first home or starting a family. Looking into income protection will give you peace of mind and make sure that the things you’ve worked hard for are safe.
Getting on the property ladder? Follow the journey of first-time buyers Shannon and Dan in our video series.
- Plan for the unexpected
If you’ve started a family, you might start to think about the unexpected things life can throw at you, decisions such as life insurance need to be considered move heavily.
Depending on your type of cover, the money from a life insurance plan could help your family to maintain their current lifestyle, pay off loans and debts, pay for your children’s education or child care and manage other living expenses..
- Prepare for long-term expenses
One of the biggest steps to financial security is to plan for your future needs. Your children’s education and third level fees are a prime example. As with all costs in life, if you start preparing in advance and putting savings aside early, you’ll feel less of a blow on the day you need to pay up.
Three things to know in your 40’s
- Be wise with your income
For some, career progression or job seniority hits in your 40’s, with this can come more benefits and money in your pocket. This is the perfect time to spend any extra money on some non-essentials or travel with the family. It’s also a perfect opportunity to put more money towards the essentials like a pension or retirement pot.
- Start to think about your retirement funds
This is a good time to start thinking about retirement, in terms of how much you’ll need to live comfortably and if there’s likely to be a gap between that amount and what you’re on track to have with your current saving, pension, and spending habits. We explain the pension gap here.
- Prepare to see your savings deplete
Don’t panic about dipping into your savings for your children’s education or wedding costs. That’s what your savings are there for so don’t feel that you’re undoing years of work – instead, you’ve been sucessful in your goals.
Three things to know in your 50s
- Approach investing with an open mind
It’s a good idea to not put all your eggs into one basket when it comes to savings and investments. Think about your end goal and the amount of risk you’re willing to take. There are numerous options when it comes to investing, and there is likely more than one that can give you what you’re looking for.
- Think about how you’ll structure your days
It’s important to consider the extra time you’ll have once you retire. Look online to see if there are retirement groups in your area or speak to a family member or friend who has recently retired and ask them their advice on managing their finances and time. Retirement might be the perfect time to take that other-side-of-the-world trip you’ve always wanted to take!
- Plan for unexpected costs in retirement
When you’re retired, there’ll be things you’ll need to pay for that you may not have previously. Being at home more means you’ll be using more electricity, water and heating. Having more spare time during the day means you might take more trips during the day, therefore using more fuel. We’ve some tips here for cutting down on fuel costs. Budget for these increased costs as part of your retirement financial needs.
We understand what it means to plan for the big things in life, let us take some of the pressure off. Want expert advice on pensions and retirement? Contact your nearest Financial Broker today.