Financial Planning Checklist For Every Stage of Your Life

Life and money are linked whether we like it or not. Financial priorities change as you hit different milestones throughout your life. Your financial goals should shift to serve your biggest needs. Some will be long term and take place over decades, while some will be shorter. Knowing what your financial goals should be focused on when you reach a milestone will help you ensure you aren’t behind the pack.

Here’s a short overview of what financial tasks you should take on when you reach specific milestones in your life from entering the workforce to marriage.

Financial Tasks When Entering The Workforce

1. Make a Budget

Know what your income is and don’t spend more than that is a good starting point. Spending less is even better as it will allow you to save money to start building wealth.

2. Track Your Everyday Expenses

There are countless apps and online aggregators that you can connect your financial accounts to and get a snapshot of where your money is going, how your investments are tracking and much more. That information will help you to make smart choices and reach some challenging goals.

3. Reduce Your Debt

Paying your debt should be a priority, particularly credit card debt, then student loans. After credit card debt, any student loans should be next. Most credit card debt will be three to five times higher in interest than the student loans so once that is clear, you’ll be able to pay your HECS debt more efficiently.

4. Allocate Beneficiaries On Your Accounts

This is a financial task that you will need to return to throughout your life. Naming a beneficiary is designating who will receive your assets in the event of your death. Right now, it will most likely be your parents or siblings.

5. Start Estate Planning

Get a power of attorney. This will designate someone to act on your behalf in business and legal matters if you become incapacitated. A living will also outlines in advance what actions you would like to be taken regarding your health if you cannot make the decision yourself.

6. Get Income Protection Insurance

Income protection insurance will provide you with an income stream if you become unable to work. This is essential throughout your life until retirement.

Advancing In Your Career

1. Negotiate When You Switch Jobs

The sooner you start to earn more money, the more you’ll end up earning over your lifetime. When you change jobs, be sure to always negotiate for a higher salary, otherwise, you’re just moving sideways. Those increases will compound on each other over time and put you in a better financial position in retirement.

2. Keep Track of Your Super

Many companies have a preferred super fund which they will create for you if you do not provide one. In Australia last year, more than 540,000 active, lost and unclaimed super accounts worth $4.4 billion were recovered and consolidated into active accounts through data matching and pressure on super funds to declare inactive accounts.

3. Work With a Financial Planner

Find a financial planner who will help give you a high-level overview of what you should be focusing on and how you can save for retirement. A financial planner can show you how much you will have in the future if you save a certain amount every month with a certain rate of return.

Getting Married

1. Update Your Estate Plan

Most people will update their will, beneficiaries, power of attorney and health care proxy when they get married to name their spouse. If these are not updated, your spouse will likely not receive any benefits from these.

2. Get Life Insurance and Re-Evaluate Other Insurance Policies

Some couples choose to get life insurance right away while others will choose to wait until they have children. This depends on your current situation and preference. It really depends on how financially equipped you are to lose that income source and pay for everything that comes with loss of a loved one.

Re-evaluate your other insurance policies for better coverage and value for money that can come from adding a spouse to a policy.

If you’d like to find out more about wealth creation, wealth management and investment strategies, our team at Ethica Private Wealth Specialists may be able to help you achieve your financial goals with a 2 Hour Free Consultation.

This information has been provided as general advice. We have not considered your financial circumstances, needs or objectives. You should consider the appropriateness of the advice. You should obtain and consider the relevant Product Disclosure Statement (PDS) and seek the assistance of an authorised financial adviser before making any decision regarding any products or strategies mentioned in this communication.