LIFE-EVENTS
“All we can do is be better prepared today than yesterday and better prepared tomorrow than today.”
James Howell – Writer
1594 – 1666
Life events timeline
Today becomes yesterday.
Today can never be called Tomorrow, once it arrives, it becomes Today.
A common misconception is that we can put things off until tomorrow. But as tomorrow arrives, it’s already today.
It’s never too early in life to make a plan for all the tomorrows that will become today.
Today is a good day to create tomorrow’s plan of how to live even better. A plan made tomorrow can never help today get better. Putting a plan together takes effort and a lot of forethought, often pushing that plan further away to “someday”.
Yesterday’s provide a good education.
History helps us predict that most people will experience a series of life events they need to be prepared for. Below we’ve pulled together a “life timeline” – a journey of what you may have already experienced, what you may have yet to come. Many of these are happy moments, some unexpected and unwelcome, however all will come as a cost. Of course, no single timeline can capture everyone’s life events, so please treat the below as indicative, assessing the impact of a few common events that a lot of people experience.
We hope this will provide the forethought needed to make sure that whatever your future brings, you have a plan in place to make your tomorrows manageable and your journey smooth.
Here To Help
Events happen throughout everyone’s life. None of us can predict exactly when, and many of them will take you by surprise, whether good or bad.
But we can learn from the experiences of others, and can choose a plan to maximise the advantage of opportunities and minimise the effects of disasters.
If either happened tomorrow ask yourself…
WOULD YOU BE READY?
Starting out
18-25 years
It’s time to fly the nest and figure out what adulting is really about! This part of life can be pretty up and down, so make sure you hold on tight, and in amongst the fun, make sure you save what you can!
Higher education
You may have been a permanent resident of ‘House of Mum & Dad’ until college or university so saving money may never have been at the forefront of your mind. Now it’ll probably need to be, along with how to reduce student debt! It would also be useful to understand the ins and outs of your student loan – how do you pay it off, and how do you start saving now for life after education.
Work begins
Once you’ve finished higher education, the next step is to find a steady income and work.
With this comes the joy of joining a workplace pension scheme (or the beginning of a self-employment pension if you choose this route). Although the idea of a starting a pension now probably seems far too premature for you, (having fun and living in the moment is probably higher on your agenda), it’s never too early.
Owning some wheels
It’s a big decision knowing what car to choose, but when you’re young, it potentially has much more meaning. It represents freedom, but what car will be of good value to you? Find out with this car-buying decision guide.
Officially flying the nest
It’s now time to get your own space. Although property markets may have you believe it’s next to impossible for anyone at this stage of life to jump on the property ladder, there are plenty of options that help make that step. Maybe you’ll rent with friends or a significant other first, maybe you’ll go straight to buying – either alone or with someone. Or you could look into shared ownership (a mix of renting and buying) or using a Help to Buy Scheme, of which many new builds now qualify. Look at our guide on Flying the Nest to see how it’s possible to fully fly the nest.
Looking to the future
Let’s face it, saving money is probably going to be tough when you just want to be having fun. Saving is a learned skill, and, like most skills, it takes time and repetition to become a habit. However, if you can make budgeting a habit at this stage of life, you should be on for a winner.
Making simple changes to spending habits could save you thousands of pounds a year.
Career Forming
25-35 years
Life may be just about be starting to settle down. Maybe you’ve worked out what career direction you’re heading in, got on the property ladder, or maybe you’ve found a perfect travelling companion and you’re off to explore the world.
Making career waves
These years are often a good time to start making the steps you want to in your chosen career, whether that’s self-employment or working for an established organisation. Make sure you are hands-on, show willing and hopefully dedication will be rewarded with greater steps and greater salary. Hopefully you will have set up an account for savings, and with these career steps, you’ll begin to build your nest egg. If you are starting to want to learn more about possible accounts and how to look after them, have a look at our Guide to ISAs and How to Protect your Accounts.
Building a nest
If you’ve been renting or have stayed at the family home in a bid to build your saving pot, it might now be time to start using some of this pot to buy your first home. Keep an eye on your credit score, look out for any investment schemes that may be able to help you to maintain some of your savings, although take advice where appropriate because some schemes can carry their own risks. And get ready to create your very own nest!
Wedding bliss
Maybe your fridge is covered in ‘Save the Date’ notes or maybe you are preparing yourself to walk down that aisle to join the love of your life, this stage of life is most probably going to be full of Wedding Fever.
Getting married is a big step and an even bigger commitment. 43% of people don’t know how much their partner earns, and 36% are unaware of how much their other half has managed to save**. People would rather talk about almost literally anything, from marriage problems to religion, than bring up the topic of money so make sure you keep the conversation of money accessible. Maybe you’ll also need to start thinking about income protection and also will writing to make sure you are both protected should anything unexpected happen.
Family ties
The possibility of bringing up little ones is probably one of the biggest decisions and one of the most life changing. Finances will now need to support others and their wellbeing, not just your own to make sure they have a great start in life. Looking into family insurance and will writing would be the best thing to do to ensure you have peace of mind for the present, as well as the future.
Mapping out the future
In the same way as the last life stage, you still need to prepare for the future. Again, make sure you’re managing to budget and divide your income efficiently, so you’re prepared for all of life’s events. You can identify future decisions that may need to be made throughout the rest of this guide, will you for example, want to travel or stay at home in retirement? Maybe you’re going to take a career break or maybe you’re need to prepare for a divorce. Either way, your saving funds will be there to protect.
Gaining Momentum
35-45 years
Now is the time to build on how far you’ve come, potentially push yourself and your life to learn more, experience more and challenge yourself to jump out of your comfort zone. Hopefully your past self will have built a little comfort cushion, so whatever you do with these years, you’ll be able to enjoy it without counting every single penny.
Growing your space
Your first home has done you well and you’ve made your own mark, but that spare room’s just becoming a little bit tight, and you’ve run out of storage – even the space under the bed is packed full! So maybe now it’s time to think about buying somewhere new.
Or if not, maybe you’ll consider adding to your existing home; maybe an extension or adding an annexe. And also, don’t forget about the benefit of checking regularly on the cost of your mortgage – looking at remortgaging can help make sure you’re always getting the best deal.
An ever-growing family
For most of us, long-term financial thinking involves saving for our children as they grow up, for our retirement, or perhaps even for our grandchildren. Making sure they’ve got enough shade to be protected in their future. It may also be a good idea to protect your income.
Pension perfection
If you started investing early you could have a good sum of money available for when you retire. Having time on your side would have meant a longer time to save and benefit from these savings and the interest they build. If you’ve not been paying this saving that much attention over the last few years, at this stage it’s good to reassess. Have you been putting enough aside? Are you on a bigger income so that you can now make major steps towards a healthy retirement plan?
Secure, safe and invested
Perhaps at this stage of life, you’re ready to start exploring new ventures and feel you can dip your feet into a few bigger investment pools. Maybe you’ll be looking at a buy-to-let property, adding to your existing income and creating an even safer, comfier nest-egg for the future.
Established
45-55 years
We’ve reached the years renowned for recklessly purchased sports cars and snazzy holidays, and as long as by doing this, you’re not shooting your future self in the foot financially, why not spend this time treating yourself a little, as well as reflecting and rediscover all the options life has to offer.
Home is where the heart is
Hopefully by this stage of life you have found a home, rather than simply a house. A place where you and your family are going to stay in until the later years. Maybe you’ll have some additional funds, and can branch out to a family holiday home, or just spend the time improving your ‘forever home’ and making a comfortable nest for all.
Providing for the next genius’
Perhaps just like you, your offspring are destined for the world of higher education and with the average costs of courses being about £9,000 a year, the Bank of Mum & Dad, which needs to be prepared for eventualities such as this, is likely to be taking a hefty withdrawal. It’s also helpful to note that there are lots of options available for funding and make your child aware that there are many ways for them to manage finances.
There are also lots of ways for them to manage their money while living student life. Parents often find it difficult to broach the subject of wealth with their children. Whatever the reasons for lack of transparency, the failure to discuss it could lead to unnecessary taxes and costly estate fees when they pass away.
Fledgling’s take flight
So now you’re going to have an empty nest, whether they’re spreading their wings abroad or attending university or college. It’s going to be a worry, letting anyone fly on their own is bound to be a concern, however if you ease them into money management and follow our leaving home guide, everyone will feel much more comfortable with the new set up.
Choosing a new path
Maybe over the years, you’ve decided that the path you’re on just isn’t pushing your buttons anymore. Maybe it’s time to set up a business yourself or retrain for something that you’ve always had a passion for. Your funds might now be able to support this decision, and if you have avoided losses you might feel comfortable enough to start a new chapter.
Having a bit of a break
Maybe you’re not ready quite to hang up your work shoes, but perhaps after a long time in the working world, you feel about ready for a little break. Perhaps you could escape the daily grind for a few months to start inspiring you; travel, start volunteering or simply cut down your working hours.
Start a new life
To many people this time of life is the point to really stretch your wings that maybe have been held back during previous life stages. Perhaps you might consider moving house, and even moving to another county; it could be the start of something new – a time to allow your spare finances to get the most out of life.
Marital breakdown
Unfortunately, somethings don’t always work out and life can pull people apart rather than bring them together. A good solicitor is a must for both sides in a separation, keeping it all stress free and fair.
Supporting your support
At this stage, life often flips on his head, and those you used to rely on now rely on you. It may be they need regular care, or to even to be moved into a home for 24/7 care. In some cases, it may be worth setting up yourself as their power of attorney to ensure you can manage their accounts efficiently and make sure their legacy is continued. They may also need to discuss estate planning and although it’s not nice to think about, being prepared for death will make everyone feel comfortable with what they are leaving behind and how to handle it.
Easing Down
55-65 years
You’ve worked hard for most of your adult life by this point, and surely, it’s now time to start thinking about a new chapter. Whether that new chapter is starting a fresh life elsewhere, or simply semi-retiring for an easier life, make sure you don’t forget to secure any long-term future goals for you and your family.
Unsurprisingly, a lot of the issues from past life stages still continue to crop up in this period, however there are a couple more that may be important to be mindful of.
New nests to build
Having finished higher education, or simply just in need of spreading their wings, your children will soon be leaving home and with fluctuating property markets,it’s likely that the Bank of Mum & Dad will be called upon.
Get the most from pensions
Paying attention to your pension is now quite key, as you prepare for finally winding down and hopefully, using your time to do the things you enjoy. Start planning the life and retirement you want and keep an eye on the income you’ll be receiving when you eventually call work a day. Boosting your pension pot is not impossible, with many options available to make sure you get the most out of your money in your final years.
Reaching your pension
It’s possible to start withdrawing from your pension from the age of 55, although this is increasing to 57 in 2028, but make sure you’re not running before you can walk and that splashing the cash now won’t leave you short in later years. A financial adviser can help you to negotiate what your limitations may be to ensure you keep in the black.
Wills and Wellbeing
Although you may feel fit as a fiddle, that’s no reason to leave your will unchecked and out-of-date. Changes could possibly have occurred since you last checked on it, so make sure your affairs are in order for when you are no longer here to review them.
Retirement
65+ years
Often over the age of 65 many are settling in comfortably to retirement, but it doesn’t have to be the case.
If you’re now no longer dependent on work for a steady income, there’s so much more time to enjoy! It’s time to bask in the freedom of old age and look back on all your busy years, hopefully with joy and excitement at what’s still to come.
Pension, pension, pension
Now it might be worth starting to draw your pension, but because of the multiple ways you can do this, it’s probably worth investing in a financial adviser for a short while to ensure you are clear on all the risks and benefits. Now you are very close to being able to access a State Pension as well, so good to factor this into your calculations.
To retire, or not to retire…
You potentially still have a third of your life left so maybe you’ll not want to just slow down and put your feet up. Why not think about travelling and exploring the world or even moving abroad. Or if you don’t fancy hanging up your work shoes for good, why not take a part-time role, maybe in a new field, or maybe start volunteering regularly with a local cause.
Reducing your space
Now your fledglings have flown, you may find you have too much space for yourself and your other half. Moving to a smaller property could make life much easier, simpler and you’d have even less housework; what’s not to like! In doing so, you could free up some more money for even more fun! There are many positives and negatives to downsizing, have a look hereto find out.
Release any equity
If you’ve found your forever home and just don’t want to have to move again at this stage of life, one way you could free up some cash in your home is releasing equity. By doing this, you’ll earn yourself a little more income but there can be negatives so it’s always good to get advice before you look into this in more detail.
Looking out for future generations
If you’ve been lucky enough in your life to acquire a lot of assets, then although nice to leave to future generations, they may find they have to pay a significant amount of inheritance tax on all these in wake of your death. There are ways to reduce or even eliminate inheritance tax completely, so may want to consider how to avoid this extra cost for your offspring and possibly take some advice.
Your later years
As time starts to play catch up, you may find that you are no longer as active as you once were and you may have to consider issues such as cognitive decline and associated circumstantial vulnerabilities. That doesn’t mean you have to stop living to the full, but it does mean you may have to start thinking about later life planning and how to handle any challenges that come your way.
Hopefully now you know how to plan your life and your finances – so get out there, enjoy it and live it!
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